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One of the most striking findings in PwC’s 2024 Digital Trends in Operations Survey is the gap between what operations executives and supply chain officers expected with their technology investments and the actual results. More than two-thirds — 69% — cited at least one reason why their tech investments didn’t fully deliver the expected results, and many selected two or even three reasons.
Clearly something is missing in the current digitization efforts of many companies. On our recent webcast, partners in PwC’s Operations Transformation practice discussed the reasons why there is still a discrepancy and what can be done to help solve it so organizations can achieve measurable outcomes and capture long-term value through tech investments.
Trust the data
While data is important in supply chain management, many organizations still operate based on experience and judgment, said Steve Puricelli, an Operations Transformation partner who works with automotive, consumer and industrial products companies. He likened the situation to the book Moneyball, in which baseball scouts once relied on gut feelings and physical appearances to make draft decisions on players until a new approach using data emerged.
The issue today lies in both data quality and the mindset of organizations to trust it. Data inaccuracies can be addressed, but the real challenge is data latency, especially when dealing with external parties in the supply chain. Trust issues can arise due to the time gap in data dissemination, but digital capabilities can help compress this information lead time.
Steve also shared an example where analyzing data led to valuable insights and a supply chain transformation, noting that many companies often need tangible evidence before committing to a data-led approach. Those organizations shouldn’t pause programs due to data quality issues but instead use them as catalysts to prioritize data improvement while addressing quality gaps along the way.
Commit to a vision, then execute
One reason for tech investments in operations coming up short is a lack of clarity in the initial vision for those investments, said Rajesh Patnaik, an Operations Transformation partner who focuses on innovation and operations strategy. In digital engineering and product life-cycle management, for instance, many companies often struggle to articulate the benefits and future state capabilities required for success. This can lead to underestimating the benefits of holistic system-led transformations, which can result in lower value realization and a cycle of low ROI on technology investments.
The execution phase is crucial for realizing value from technology investments, Rajesh said, especially since integration complexity is a top reason — chosen by 30% of survey respondents — why investments aren’t delivering the expected results. He recommended a multi-pronged approach, including defining metrics to help capture value, baselining and measuring those metrics periodically, phased implementation of core capabilities, and taking an ecosystem view of the digital solution being implemented.
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Insights from PwC’s 2024 Digital Trends in Operations
Understand sustainability is a journey
The survey also revealed a gap in sustainability. While 53% of respondents strongly agree that incorporating sustainability into operations is important, fewer executives agreed with specific actions or attitudes related to sustainability. This shows that sustainability is a process that requires thoughtful transformation and isn’t achieved overnight, said Katie Nakonek, an Operations Transformation partner who works with consumer and retail companies.
Technology solutions to manage sustainability data are being developed, she said, but tech alone won’t help solve deeper operational challenges. For example, managing item and vendor data accuracy has often been a low priority, and integrating new requirements for vendors into existing workflows can be difficult. Also, new regulations can add timing pressures, but many businesses are waiting for larger players and their suppliers to set the standard.
Instances of increasing sustainability in digital operations include using forecasting models driven by artificial intelligence and machine learning to reduce inventory waste, investing in connected devices for efficient refrigeration in grocery stores, and exploring tech-driven re-commerce solutions in the apparel industry, Katie said.
GenAI shouldn’t be plug-and-play
The survey showed that generative AI (GenAI) is a work in progress at many companies, with 70% of respondents saying their companies are either testing or implementing GenAI while only 20% report implementation in many areas. That indicates a lack of cohesive strategy. Reza Jenab, an Operations Transformation partner who works in energy, engineering, utilities and other industries, said the effective use of GenAI relies on a thoughtful strategy, not a plug-and-play approach.
Isolated use cases can bring short-term benefits, he said, but the true value of technology lies in a long-term approach that includes business model evolution and people adoption. Companies also should consider that the challenges related to AI adoption are not unique to this technology but occurred in previous tech transformations. As for fears of AI replacing labor, Reza suggested viewing AI as “intelligence augmentation” rather than “artificial intelligence.”
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Insights from PwC’s 2024 Digital Trends in Operations
Webcast: 2024 Digital Trends in Operations Survey
Discover how to navigate operational challenges, improve resilience, boost efficiency and continue delivering for customers.
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