Background and challenge
The client was a leading B2B distributor with a worldwide footprint. Based on a brick-and-mortar business model with over 2,800 points of sale, it was looking to accelerate its digital transformation across its 150+ subsidiaries, all of which worked independently.
The client engaged L.E.K. Consulting to help formulate a clear digital vision at the group level, assess digital performance at group and individual country levels, and develop an implementation road map to improve performance. The project focused on:
- Digital outside (e.g., ecommerce, customer service, new routes to market)
- Digital inside (e.g., productivity improvement, operational excellence, supply chain)
Approach and recommendations
During the project, L.E.K. established a digital transformation methodology (see Figure 1) by performing the following tasks:
- Defined the vision. Identified the main trends affecting the industry (e.g., customer evolution, competitive moves, ecosystem changes, product evolution), defined the client’s value proposition for each customer segment and established clear targets.
- Decomposed B2B distributer activities. Broke down the activities of a B2B distributor into approximately 350 “business capabilities,” reflecting all the activities carried by distributors. We then:
- Ranked the capabilities in terms of overall maturity level (see Figure 2)
- Prioritized the capabilities based on their importance in achieving the value proposition or in improving the efficiency of the group
- Assessed the gaps. Defined the end states for both (i) customer segment value propositions and (ii) efficiency improvement levers. We realized a maturity assessment of prioritized business capabilities and identified the main gaps to prioritize.
- Developed the global digital transformation engine. Developed ways to facilitate the transformation at both the country and group levels.
- Defined country-specific broad maps. Identified initiatives to be established based on the prioritized business capabilities and provided an implementation plan, including timing, resources and budget.
L.E.K. helped accelerate the group’s journey toward the digital transformation by:
- Creating momentum and empowering different stakeholders within the group at all levels of the organization (including the C-suite, commercial, logistics, IT and marketing).
- Building a transformation tool that allows progressive digitalization of the group’s diverse entities, and that focuses on priorities and enables the tracking of relevant key performance indicators.
The client has since initiated implementation of the road map in two pilot countries and reports strong momentum among the operational teams.
For more information, contact L.E.K. Consulting.