What Digital Advantage looks like
As previously explored on the blog, there are a set of UK PLCs who exhibit the traits of a company that has gained a digital advantage. Specifically these firms have greater revenue efficiency, calculated as a function of the revenue per employee and return on assets, and profitability.
This graphic shows a box and whisker chart for the digital leaders.
In order to fit the bill as a digital leader, your company needs:
- Revenue per employee greater than £218,000
- Return on assets greater than 5%
- Net margin greater than 5%
Two companies that typify this digital leadership are Burberry and Apple (both plotted on the charts).
For every employee Burberry makes £247,000 in revenues. They achieve 17% returns on their assets and enjoy a net margin of 13%. Roughly for every employee, the business makes £32,700 in profit.
Staggeringly, Apple makes $1.9 million per employee. With a healthy net margin of 21% the company is therefore making $400,000 per employee.
Two questions for you. Firstly, what is your business’ revenue per employee, net margin and return on assets? Secondly, what are you doing to achieve a digital advantage?
On the second question let me make some suggestions:
- Digitise the customer experience. Let customer’s self serve with minimal interaction with staff
- Digitise operations: eliminate paperwork and admin, automate everything, maximise productivity and create a leaner value chain
- Create new digital business models. Develop digital only products. Leverage your existing assets. Break into new markets.
Of course if you need help with any of that, get in touch.
Further information on digital strategy
For more on this topic see:
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