The Covid-19 pandemic has placed an obvious demand for digital investment within firms, whether it’s to pivot towards e-commerce, providing remote working functionality for employees, or bolstering one’s cybersecurity defenses.
It’s perhaps no surprise, therefore, that recent research from Accenture shows the importance of technology for firms during the pandemic. The paper highlights particularly strong returns from investments in areas such as AI and cloud technology. Indeed, the strongest investors in these technologies managed to grow their revenues at five times the rate of the laggards in that regard.
This is meaningful as Accenture has been doing a similar study for a number of years and that gap has grown considerably over the past few years. Despite the warnings, the report shows that laggards are often only just beginning to invest in these technologies, which is putting them at a significant disadvantage.
“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 Laggards,” Accenture says.
Best strategies
The report, which involved surveying 4,300 firms before assigning each of them a score based on their Flip Size and Systems Strength, placed the respondents into either Leaders (the top 10% of the sample), Leapfroggers (18% of the sample), or Laggards (who were the bottom 25%).
“This report shows that leaders are adopting innovative technology earlier and investing more frequently than their peers,” the authors say. “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 upskilling their workforce.”
The authors highlight that the most effective strategies in terms of technology investment tend to rest on three core 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% of Leapfroggers had adopted some form of cloud technology by 2017, but that figure rose to 98% 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% 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%) of Leaders prioritize employee happiness by providing digital-based flexible work arrangements, compared to just 43% of Laggards.
