Our firm is excited to announce that McKinsey was recently named a Leader, the highest category ranking we can receive, in The Forrester Wave™: Digital Business Transformation Services, Q4 2020.
From building new digital businesses and helping organizations to modernize their technology, to transforming companies through data, analytics, and artificial intelligence, McKinsey Digital “delivers high-value end-to-end business transformation” and is “a good fit for companies seeking world-class strategy, innovative technology solutions, and organizational redesign as part of digital business transformation,” wrote Forrester.
“After years of investment in this space, this recognition is a testament to the high-impact work our teams are doing across digital and analytics,” says senior partner Rodney Zemmel, who co-leads McKinsey Digital globally with senior partner Kate Smaje. And after a year that saw digitization accelerate at a pace previously unimaginable because of the COVID-19 pandemic, Kate says: “Partnering with clients to enable this kind of change by bringing together the critical technology and capabilities for the digital age is the most important aspect of our work, and we were pleased to be recognized by Forrester with insights on some of our lesser-known capabilities.”
In its report, Forrester also noted that McKinsey Digital is “particularly skilled at working with clients to pilot-test its hypothesis and prove value before ramping to scale and marrying the right technology with organizational change to ensure transformation sticks.”
Here Kate and Rodney take us through three digital enterprise transformations we’ve partnered with clients to help drive:
Bringing AI from pilot to scale to enable transformation at a North American airline
A couple years ago, a North American airline came to us with a bold vision: Transform the company into an industry leader in using artificial intelligence across its business. “Our teams took a domain-based approach to the transformation,” says Rodney. “That meant looking at crew planning, ticketing, loyalty programs, operations, and more as a whole to see where digital and analytics could most rapidly deliver impact and in which order we should transform the domains.”
Cargo was where the team decided to start given how challenging it can be to predict how much space airlines will have on a given flight: Passengers may show up with more or less luggage than you expect, but airlines can’t overbook the flight by too much in case customers arrive with urgent cargo—with no space to put it.
The McKinsey Digital team worked to develop an MVP that could be tested in a pilot with a subset of the routes that were representative of their global network. After proving its value, the team scaled the pilot by leveraging years of historical cargo data—booking, cancellations, and final payloads—as well as up-to-date information on weather and other factors. The algorithm then delivered recommendations on how much space to book. After a 16-week pilot run, the tool delivered double the impact on revenue as expected—and the airline has adopted two more analytics-driven tools.
As Forrester wrote in its report, McKinsey Digital’s “strategy of hiring top experts in their respective fields delivers relevant business outcomes for customers with relatively fast payback.”
Transforming technology—and customer experience—at a global retailer
When a retailer approached us about launching their digital customer experience around the globe, they knew it was an effort that would challenge both their business and technology teams to work in new ways.
Our team helped design the transformation, launch and run a digital office to coordinate efforts across every area of the company (including their mobile app), and refine technology delivery plans and ways of working. We also brought design thinking and a data-driven approach to refine their customers’ digital and physical experience, and a team of engineers and architects to ensure the new capabilities would run at a global scale. The retailer successfully launched their digital channels ahead of schedule.
As our client launched these new digital channels, we helped them build the data analytics capabilities to improve customer and employee experience and create business value. Our team helped design and implement a cloud-based data architecture and set-up a new advanced analytics capability. These new capabilities help them treat data as an asset, building machine learning-backed capabilities around personalized customer experience, employee safety, and predictive insights in operations.
Rodney says: “It’s gratifying to support organizations in deploying emerging technology, such as automation and IoT, so they can deliver business value in ways they hadn’t imagined before. Our deep bench of technology experts ranging from cloud engineers to data scientists to designers work hand in hand with our clients to design, build, and deploy these solutions at scale.”
Embedding agile ways of working into a mining company’s culture and using AI to increase production
McKinsey Digital recently partnered with a global metal producer that wanted to boost its performance in a significant way. Although the client's initial interest was to learn how AI might help their technical processing operations, they were ultimately surprised to learn how important culture and ways of working would prove to capturing and sustaining impact.
Cross-functional teams with a mix of seasoned mining expertise and up-and-coming digital talent were assembled across each of the company's assets. These teams were challenged to raise production at each of their core assets by 15-20 percent, in a period of roughly 18 months, with minimal spend. In addition to traditional tools, like lean, our team introduced two new digital capabilities to the client. First, the teams used AI models to help optimize each of the assets they were working on. Second, we introduced a new, agile way of working that allowed the client to rapidly prototype solutions and test them in the field for fast customer feedback.
For an engineering-driven organization, this was a dramatic change that significantly improved their operations. A little more than one year into their journey, each client site has set multiple new production records, and several of the assets have hit or exceeded their ambitious 15-20 production improvement goal, despite the impact of COVID-19. In fact, the client believes that the new capabilities they built have helped them respond faster to the pandemic—and make their operations more resilient to disruptions.
For this miner, what started as a journey to explore the power of AI turned out to be much more impactful enagement. While AI helped them identify and unlock new opportunities, the bigger surprise has been how much opportunity could be unlocked by embedding agile principles to their ways of working that ultimately allowed the client's talent to unleash their creativity.
Because the agile approach was a change in both process and culture, we brought in coaches to help with the transition. “We know that building an agile organization requires reimagining how teams are structured and collaborate to deliver impact,” says Kate. “Our agile coaches were able to help the miner’s teams at all levels of the organization work in new, innovative ways—and unlock break-through solutions along the way.”