White Cobalt Blog

White Cobalt Blog

57.1% growth in Net Profit Margin

S&P Global conducted a study of 334 businesses over a 3-year period. They analysed the impact of ‘Digital Transformation’ across these companies.

Digital Transformation is a term often used to describe a series of projects aimed at workflow improvement and automation with technology.

The study found that companies who had embraced Digital Transformation averaged 18% greater Gross Margin than those who had not; that's a 48.6% improvement. Other financial indicators followed a similar pattern, including a 57.1% difference in Net Profit.

It's worth noting the study was based on large, publicly-listed businesses that were already very efficient. And, as you can see from the graph; have relatively small net profit margins. When we apply these concepts to smaller companies, that have more untapped potential, the benefits are often much greater. 

This correlates with our experience in the industry. In smaller companies, we have seen 3- and 4-fold improvements in operating efficiency, and as a result; substantial gains in margin, and net profit. We have worked with multi-million-pound businesses, who have embraced automation to such an extent they can now operate with only a handful of staff.

Today, this approach will give you an advantage, but tomorrow it will be essential in order to compete.

The full content of the Harvard Business Review article and the S&P Global study can be found here: https://hbr.org/visual-library/2017/01/digital-leaders-outperform-laggards-on-3-financial-measures

If you’d like to know more about how we can help your business, we’d be delighted to talk to you.

Steve Stovold - Director
Steve Stovold