BCG Creates BCG X as New Hybrid of Consulting and Tech Build & Design Capabilities

Christoph Schweizer, CEO BCG

New research published today from Boston Consulting Group (BCG) shows that while 94% of companies have big aspirations to deliver substantial and rapid impact from digital transformation, and companies plan to increase investment in digital transformation in spite of global economic headwinds, the majority of these digital transformations fail to achieve their objectives.

Titled “Mind the Tech Gap,” the study is based on a survey of nearly 2,700 executives driving digital transformations in companies across 13 countries and a wide range of industries. Despite a tightening global economy, the survey also finds that 60% of companies plan to increase their spending on digital transformation in 2023 vs. 2022, with business model transformation and sustainability as the top two areas for future investments.

“Many CEOs I speak with are grappling with the challenge of delivering their business strategy through major digital transformations. To tip the scales, we are doubling down on BCG X, our nearly 3,000-person tech build and design unit. BCG X will turbocharge BCG’s deep industry and functional expertise to enable innovation at scale and deliver successful end-to-end digital transformations,” said Christoph Schweizer, BCG’s CEO.

The survey revealed five key challenges in establishing and executing digital transformations:

• Making the right choices among disruptive technologies—top three cited are advanced AI, blockchain, and IoT
• Reaching scale fast with new digital solutions
• Recruiting digital talent—top three hardest tech roles to fill are experts in advanced tech, software engineers, and data scientists
• Prioritizing investment and development
• Managing the cost and uncertainty of return on investment

David Panhans, leader of BCG X Middle East, added: “In order to capture the full growth potential in the post-pandemic future, GCC governments and corporations are undergoing or planning major digital transformation efforts to adopt emerging technologies and to provide end-to-end digital services. However, digital transformations are complex and often fail to deliver the expected results. To help our clients to overcome these challenges BCG is rapidly building up BCG.X in the Middle East to provide the full range of tech design and build capabilities to our Middle Eastern clients. Combined with our deep sector and functional strategy expertise, BCG will help clients to accelerate and deliver on their digital transformation ambitions.

Additionally, respondents expressed concerns and pain points regarding the ecosystem of tech partners and vendors. These include cumbersome coordination across vendors (~85%); cookie-cutter solutions (~75%); and lack of help in prioritizing steps of the transformation (~70%). As Sylvain Duranton, the newly appointed global leader of BCG X, shared: “What’s clear from our survey is that most companies are struggling to deliver bottom-line results for their digital transformations and are facing consistent pain points with their tech partners and vendors. BCG X, as an integral part of BCG, will bring tech build and design capabilities together to solve these problems.”

To help clients respond to these challenges and address these pain points, BCG has launched BCG X, a hybrid tech build & design unit that brings together nearly 3,000 technologists, builders, and designers. Combining technology build with business strategy and deep sector and functional expertise, BCG offers its clients a unique toolbox for accelerated digital transformation, tech and business innovation, AI & advanced analytics solutions at scale, and more. This cannot be achieved by consultants or tech vendors alone—together, BCG and BCG X bring to life ambitious tech and business builds at scale.

“BCG X is a multiplier of our clients’ technology teams, working in close collaboration, to bring our pool of leading talent in AI, software engineering, digital growth, green and deep tech,” said Jessica Apotheker, BCG chief marketing officer and expert leading large-scale digital go-to-market transformations.

BCG X’s capabilities include:

AI & Software: Dedicated to building cutting-edge AI and digital industrial-grade software, powered by proprietary data assets, to enable better, faster decision making.

Design: Combining qualitative and quantitative elements of behavioral, human-centered design to drive insights and ideas that result in breakthrough innovations to dramatically improve the end-to-end customer and employee experience.

Digital Growth: Scaling opportunity and accelerating performance for businesses, bringing robust digital marketing and digital commerce expertise to set up clients for immediate impact.

Ventures: An end-to-end approach to build and launch standalone and new core businesses, turning differentiated assets into strategic advantages and launching these projects at speed.

Deep Tech: Applying game-changing technologies grounded in physical science, digital capabilities, AI, and Web3. Weaving deep tech into value chain transformations, enhancing product and build design, and, ultimately, reshaping how businesses interact with customers.

Green Tech: Harnessing BCG’s deep sector expertise to build businesses for a net-zero economy and identifying opportunities to reinvent core business models to drive sustainable growth.