Margin improvement in the age of digital disruption

Using all that digital disruption to find new margin growth

Everyone knows digital disruption is changing the rules of the game for margin improvement, blurring the lines between industries and creating a need for dramatic efficiency gains across the board. When it comes to improving margins and competitiveness, two areas of digital innovation are front and center:

• Automation—software "robots" that can automate tedious and labor-intensive information tasks such as data collection and data processing
• Cognitive technologies and analytics—harnessing the power of analytics and big data, and cognitive technologies such as machine learning, computer vision, and natural language processing, to uncover hidden insights and boost effectiveness

Deloitte helps companies leverage technologies like automation and cognitive technologies/analytics to find new ways to increase profit margin.

Read how some of our clients—large, global enterprises—found opportunities for margin growth in the midst of digital disruption and helped position their business for thriving in uncertainty tomorrow.

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A new approach to margin and business improvement

Traditional margin improvement efforts—such as operating model transformation, outsourcing, and external spend reduction—while still important, are quickly becoming table stakes that alone are unlikely to deliver the required level of margin and performance improvement. Our cost management and margin improvement surveys across the United States, LATAM, Europe, and APAC found that while nearly half (45 percent) of all respondents globally indicated pursuing cost reduction targets of less than 10 percent, almost two-thirds (63 percent) reported failure to meet their targets.

To thrive in uncertainty, companies should consider a new approach to margin and business improvement that can help them identify, prioritize, and pursue new growth opportunities while generating cost savings, freeing up cash, and supporting the development of capabilities and talent required to achieve its strategic vision. This new approach has several key elements:

• Seeing the environment clearly
• Understanding the tradeoffs between value levers
• Employing multiple strategies at once
• Harnessing the power of digital technologies
• Aligning the organization

Deloitte helps companies rise to the challenge of thriving in uncertainty through a comprehensive, integrated margin, and business improvement approach that leverages a full suite of value levers—cost reduction, aggressive growth, liquidity, and talent—fueled by our thriving in uncertainty (TIU) Insights Platform and driven by our digital solutions.

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Controlling your own destiny

Businesses today face economic, political, and technological uncertainty. And while there is nothing you can do to entirely avoid this uncertainty or halt the progress of digital disruption, that does not mean you are helpless against the whims of fate.

By adopting a new approach to margin improvement and competitiveness—and by actively looking for ways to strategically harness the power of rapidly emerging digital technologies to enable new business models—your company can dramatically improve efficiency and effectiveness and take control of its own destiny, becoming the disrupter rather than the disrupted.

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