DESCRIBING them as “leapfroggers,” leading companies invested more in technology during the doldrums of the pandemic ended up to be leaders–growing up to five times more in revenue than late adopters.
This is one of the conclusions of new research from Accenture called “Make the Leap, Take the Lead.” The research reveals that technology has undeniably become indispensable to business success and directly enables companies to not only survive but even thrive during one of the most disruptive times in history.
Stepping up investments in the Cloud, artificial intelligence (AI), and other technologies, ‘leaders’ are now growing revenue at five times the rate of ‘laggards,’ exceptionally higher than the doubled growth rate they reported just a few years ago.
In sharp contrast, many laggard companies just recently invested in newer technologies for the first time, largely to maintain business and technology operations during the pandemic. This put laggards even further behind and in the position of playing catch-up.
Creating this new class of ‘leapfrogger’ companies separate companies that simply grew to those that compressed digital transformation and outpaced peers with four to five times revenue growth.
This new category, representing 18 percent of the entire sample stands out in its ability to quickly master the balance between systems strength and increased innovation. leapfroggers compressed their digital transformations into a shorter time frame through an aggressive and progressive technology strategy that converted the challenges of the past year into business opportunities and advantage.
“Our research scored companies on their ‘systems strength’–a measure of technology adoption, application of technologies at scale, and organizational and cultural readiness for tech-enabled innovation. Strong systems strength, combined with a “flip size” that substantially pivots IT budgets towards innovation, enables leaders to greatly extend their growth over Llggards,” Ramnath Venkataraman, global lead, Integrated Global Services, Accenture Technology said.
“Meanwhile, leapfroggers also show tremendous progress by maintaining systems strength and infusing innovation across the enterprise. In fact, leapfroggers are now growing their revenue at four times the rate of laggards.”
The report surveyed 4,300 respondents and assigned a score based on systems strength and flip size. The study determined which companies were ‘leaders’ (top 10 percent of entire sample), leapfroggers (18 percent) and ‘laggards’ (bottom 25 percent) and looked at the financial performance of each group.
“This report shows that leaders are adopting innovative technology earlier and investing more frequently than their peers. These leaders focus not only on the implementation of new technology, but the critical steps needed to ensure successful scaling across the enterprise, including new agile ways of working, making important changes to reinforce an innovation-led culture, and reskilling their workforce. Each of these actions result in creating new sustainable value for their stakeholders,” Annette Rippert, group chief executive, Strategy & Consulting, Accenture emphasized.
The report shows that evolving technology strategies deliver greater success when companies master these three imperatives:
- Replatform to the Cloud to build systems strength, reducing redundant technologies and disconnected data across the IT stack, while gaining computing power and flexibility. For instance, 80 percent of leapfroggers had adopted some form of cloud technology by 2017, but that figure rose to 98 percent by 2020.
- Reframe to an innovation-first technology strategy. leapfroggers excel at shifting their mindset and viewing potential downturns as opportunities to innovate with new technology. Scaling new innovations became the top priority for leapfroggers during the pandemic, and 67 percent seek to aggressively increase revenue from non-core business lines.
- Reach by expanding access to technology across internal business functions and embrace a broader value agenda by addressing personalized employee upskilling, well-being, and mental health. Nearly two-thirds (65 percent) of leaders prioritize employee happiness by providing digital-based flexible work arrangements, compared to just 43 percent of laggards.
Over 70 percent of leaders increased investments in cloud security and 68 percent in hybrid cloud. leaders also dug deeper into Internet of Things technology (70 percent) and AI and machine learning (59 percent). Building a foundational cloud platform delivers the cost savings to help flip IT budgets from maintenance to innovation. Both provide a sound basis for aligning technology strategies with business goals that drive 360-degree value for multiple stakeholders across the enterprise.
Leapfroggers transformed their technology strategies and priorities in a short time frame, using the crisis to increase the use of advanced and emerging technologies by 17 percent and scaling technology across their enterprises. This group also fostered thoughtful organizational change to take further advantage of these technologies and compressed their transformations from years to months.
