What: Despite technological advances from internet to GenAI, companies must embrace end-to-end reinvention rather than implementing new technologies within outdated workflows to achieve meaningful productivity gains.

Why it is important: The gap between technology's potential and actual productivity gains represents a significant opportunity, as evidenced by top-performing retailers achieving 4.5% annual productivity growth compared to the industry's 0.3% average through comprehensive transformation.

BCG's research reveals that despite successive technological revolutions, productivity growth remains disappointingly sluggish, with European Union GDP per hour worked rising by just 0.6% annually. Organizations face two main barriers: implementing advanced technology within outdated workflows rather than rethinking processes entirely, and allowing departmental silos to override broader organizational objectives. The solution lies in end-to-end reinvention, which fundamentally transforms ways of working while breaking down organizational barriers. This approach generates three to four times the impact of traditional improvements by rethinking entire workflows, eliminating inefficiencies, and driving processes across departments. Success requires five key actions: reimagining value creation, eliminating legacy activities, enabling cross-functional alignment, addressing root causes of inefficiencies, and promoting cost-conscious growth in sales strategies. The research demonstrates that technology should serve as an accelerator of change rather than a mere problem solver.

IADS Notes: Recent retail sector developments powerfully validate BCG's findings on end-to-end reinvention. In March 2025, research revealed that while 84% of retail executives are planning increased AI investment, the stark reality shows only 10% successfully scaling their applications. By June 2025, top-quartile retailers who embrace comprehensive transformation were outperforming industry five-year TSR by 7 percentage points through integrated approaches. The urgency for change is driven by evolving consumer expectations, with McKinsey's February 2025 report showing 71% now demanding personalized interactions. Most telling is the cost of inaction: retailers are losing 4.5% in gross sales due to inefficient operations. Walmart's January 2025 successful processing of 850 million product data points through AI implementation demonstrates the potential when technology is properly integrated into reimagined workflows. These findings reinforce that true productivity gains come from fundamental process redesign rather than merely layering new technology onto existing systems.

End-to-end reinvention unleashes a technology's full potential