An estimated $30 trillion in corporate revenues will arise from products that have not yet reached the market. Keeping your eye on where value comes from is still the name of the game.
#1: “Software is eating the world.” While that’s as true as ever, the more important focus for business leaders is how well they can use that software to build things, from businesses to digital products. Companies that learn to build, test, and adapt quickly will be in the best position to create value. This is especially true as AI continues to advance and costs for technology-based innovation decline, both of which will challenge not just businesses but also business models. An estimated $30 trillion in corporate revenues will arise from products that have not yet reached the market. Some 70 percent of digital-transformation leaders are already building their own software in areas that drive competitive advantage, and we expect that percentage to increase as costs to build continue to fall. Meanwhile, CFOs see building new businesses as their organizations’ most likely strategic action in the next 12 months. Focus on the two most important elements of being a builder: one, build something that matters: a new product, solution, or business that creates a competitive advantage; and two, architect a team with the right incentives, tools, and governance to build products or services. Lack of ideas is rarely the cause of failure in building something new. Rather, companies struggle to execute them.
#5: Knowledge is power, BUT data is knowledge: Data products—high-quality, ready-to-use data formatted so that people and systems across an organization can easily access and apply it—can deliver new business use cases as much as 90 percent faster and reduce the total cost of ownership by 30 percent.⁸ Value will accrue to businesses that have proprietary data that they can use to improve the capabilities of their foundation models in ways their competitors can’t.
Read the original article here by Kate Smaje & Rodney Zemmel at McKinsey.
