McKinsey: Firms Capture Under One‑Third of Digital Value; Customer‑Centred Engineering Offered as Remedy

McKinsey research finds organizations typically realize less than one‑third of the value expected from digitization because many start with technical capabilities and bolt on applications instead of beginning with customer needs.

McKinsey research finds organizations typically capture less than one‑third of the value expected from their digital investments, a gap driven by an engineering‑first approach that prioritizes technology over customer needs. That sequencing often produces fragmented solutions, disjointed customer experiences and failed transformations, leaving companies unable to realize anticipated returns from digitization. Firms that outperform reverse that pattern by designing products around customer experience first and then building technology to meet those identified needs. Capital One’s Ashish Agrawal says bringing engineers close to customers sparks “sideways innovation” and a “multiplier effect. rather than theoretical requirements.

The piece frames those practices as a clear AI opportunity: engineers are naturally close to systems and data, and when they understand real usage they can devise efficient fixes and spot novel solution angles. Agrawal also highlights a major barrier to this model at scale — large companies’ lack of direct access to customers, which limits meaningful collaboration between engineers and users and makes it harder to translate data or system knowledge into customer‑facing improvements.

Adopting a customer‑centric engineering culture requires discipline, measurable goals and sustained incentives. Capital One has set an objective for each engineer to establish several customer touchpoints across the year so teams can see direct impact and prioritize fixes accordingly. Proponents argue this approach raises the odds of delivering AI that meets expectations and reduces the risk of costly, disjointed transformations.