As companies across industries invested billions in the latest technologies—agentic AI, customer experience, process mining, cloud-native, robotics, and more—with the promise of greater efficiency, increased revenues, and long-term competitive advantage. Still, despite considerable investments, many enterprises have discovered that technology investment alone does not guarantee meaningful progress.
For instance, McKinsey states that the most significant organizational shift since the industrial and digital revolutions centers on agentic AI, not just the adoption of generative AI. However, McKinsey emphasizes that deploying agentic AI successfully “isn’t easy”—organizations must fundamentally rewire their operations, not just adopt a new tool. A recent BCG article, The Widening AI Value Gap, contends that only 5% of firms worldwide are “AI future-built,” or generating transformative value, while 35% are scaling AI; however, 60% are reaping hardly any material value despite substantial investment
Vertical End-to-End Transformation
The reasons for the challenges encountered in trying to attain lasting value, whether the technology being deployed is agentic AI, Gen AI, cloud transitioning — virtually any digital transformation effort are broadly caused by the same underlying issues: lack of clear vision, insufficient leadership support, staffers resistance to change, poor data governance and quality, resource constraints, trying to achieve too much too quickly, and more. In this story, we’re focused on the lack of a clear vision and process for managing debts.
Often, applications designed by citizen developers, or even AIs deployed within departments, target very narrowly defined tasks or projects within specific departments. While these “point fixes” do yield some incremental improvement, they rarely deliver the level of fundamental change that alters the business model or makes a noticeable impact on performance.
This is why many experts advocate for a transformation vision that’s not focused on isolated functions, but on the entire lifecycle of a business process. Mohib Yousufani, senior partner at PwC, agrees with this strategy. Yousufani said that the focus should be on the whole lifecycle of a business process, encompassing roles, departments, and teams. An example of a business lifecycle he cited could be the human resource department.
Just as a rowing crew must synchronize each member’s efforts or risk undesired turns and potential tipping, organizations must align their human resources processes throughout the entire employee lifecycle—or face turbulence that threatens their competitive advantage and bottom line.
Rather than treating recruitment, onboarding, development, performance management, and offboarding as disconnected activities, an organization should strategically evaluate its HR processes to treat these stages as integrated components of a comprehensive talent management system.
For this HR example, organizations that pursue this optimization would start by mapping their full employee lifecycle, identifying friction points and inefficiencies that exist across functional silos. They then implement integrated HR technology platforms that automate repetitive tasks—such as resume screening, interview scheduling, benefits administration, and compliance reporting—while freeing HR professionals to focus on strategic initiatives.
Such process standardization reduces human error and creates consistent experiences at every touchpoint, from the first application through exit interviews. Crucially, the strategy incorporates continuous feedback loops and analytics that provide real-time visibility into what’s working and what isn’t, enabling data-driven refinement.
The results from this transformation should be both measurable and substantial. According to Gallup’s research on employee engagement, organizations with highly engaged employees experience 23% higher profitability and 14% to 18% higher productivity, depending on the industry. For turnover specifically, Gallup found that highly engaged workforces experience a 51% decline in turnover in high-turnover organizations and a 21% decline in low-turnover organizations.
Harvard Business Review research on employee experience in retail locations found that if an average store could move from the bottom quartile to the top quartile in employee experience metrics, it would increase revenue by over 50% and profits by nearly the same amount. McKinsey research shows that employees at leading employee experience companies demonstrate a 40% higher level of discretionary effort and are 8 times more likely to want to stay at their company. “Such high levels of benefits are because the transformation isn’t focused on small point-in-time issues of a value chain, but instead looking at the entire hire-to-retire lifecycle,” Yousufani said.
But the financial benefits are just one dimension. Optimized lifecycle management can help strengthen an employer’s brand, create opportunities for employee development that lead to higher retention, and build organizational resilience through the retention of institutional knowledge.
Perhaps most importantly, it can transform the employee experience from a series of transactional encounters into a cohesive journey where people feel valued and supported, which ultimately translates into better performance, stronger customer relationships, and a sustained competitive advantage.
The Invisible Enemy: Process Debt
A significant part of the success stems from the weeding out process of debt. Like technical debt in IT systems, process debt refers to the accumulation of outdated procedures, inefficient workflows, and redundant steps that have built up over years of incremental changes. These legacy practices hinder productivity and make it challenging to fully realize the benefits of digital solutions.
Overall, while process debt is rampant, forward-thinking organizations succeed by treating automation as a catalyst for redesign, not a quick fix—potentially unlocking millions in annual savings per use case.
To sidestep potential traps, organizations should prioritize process optimization before they begin automating. This entails a focus on audit and redesign, starting with thorough process mapping to identify process debt. This is typically achieved by using tools like Figma workflows or AI audits to prioritize processes for optimization. Also, start small and iterate by piloting in low-risk areas, such as invoice chasing or design reviews, measuring against baselines to ensure automation resolves, not replicates, debt.
Failure to confront process debt, Yousufani said, leads to a familiar pitfall associated with “citizen-led transformation.” Organizations distribute productivity tools hoping employees will optimize their own workflows. But at best, this bottom-up innovation results in minor efficiency gains: “If an individual deployed Gen AI, and they gain—in a best-case scenario—10% productivity, that’s 10% for one employee. The gains are much greater when looking at an entire process transformation,” he said.
Yousufani emphasized that organizations must improve their underlying operating model. “True transformation requires confronting process debt at the systemic level,” Yousufani said.
“When you focus on the entire value-chain, your improvements span functions, departments, and teams. Targeted in this way, vertical transformation can lead to significant cost reductions up to 30% and even greater in many cases,” he added.
A Blueprint for Sustainable Change
To succeed in transformations that span the organization, executive sponsorship—a mandate from CFOs, CEOs, or boards—is required to ensure alignment between technology investments and business objectives. When digital transformation is led only by technology teams, businesses risk misalignment and squandered investments.
However, when business leaders set the agenda and technology is deployed as an enabler rather than as the sole driver, transformation efforts can be sequenced to deliver both quick wins and long-term success.
Ultimately, vertical end-to-end transformation, underpinned by the rigorous elimination of process debt, offers a blueprint for sustainable innovation. It’s a comprehensive method that doesn’t just add technology for technology’s sake, but reshapes how work gets done, how value is created, and how businesses compete in the modern era.
“Digital transformation is not about deploying point fixes. It is a fundamental reforming of the core business objective, and as a result, where digital comes into play,” Yousufani said. For organizations ready to move beyond incremental change, the roadmap is clear: rethink the process, align leadership, and let technology serve the broader business vision.
