In its newest study on how innovation affects revenue growth among organizations, Accenture, the global consulting company, revealed that a new class of ‘Leapfrogger’ companies compressed digital transformation and outpaced peers, having 4X revenue growth. The 2021 report “Make the Leap, Take the Lead” highlights that technology is vital to business success and enables companies not only to survive but most importantly, to thrive, during one of the most challenging times in history.
Accenture uses technology adoption as a basic criteria in order to categorize companies. In fact, the companies (top 10% of entire sample) which stepped up the adoption of technologies such as the cloud, AI and IoT, are described as ‘Leaders’ ; on the other hand, companies that only recently invested in new technologies for the first time are defined as “Laggards” (bottom 25% of sample). In specific, ‘Leaders’ are now reported growing revenue five times faster than ‘Laggards’, which is a significantly higher rate than the doubled growth rate that Leaders reported just a few years ago.
Leaders have extended the revenue gap over Laggards
Furthermore, the category of the ‘Leapfoggers’ (18% of sample) stands out for its ability to promptly master the balance between systems’ strength and increased innovation. As the report highlights, ‘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.’
The report shows that evolving technology strategies deliver greater success when companies focus on the following 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 example, 80% of Leapfroggers had adopted some form of cloud technology by 2017, however that figure rose to 98% by 2020.
- Reframe to an innovation-first technology strategy. As explained within the report, 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 all internal business functions and also 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.
The report also presented how the “Leaders” approached their technology spending. In specific, more than 50% of Leaders increased investment in core and emerging technologies:
- 72% accelerated investments in cloud security
- 68% accelerated investments in hybrid cloud
- 70% accelerated investments in IoT
- 59% accelerated investments in AI and machine learning
- 60% accelerated investments in robotic process automation
Last but not least, it is pinpointed that as we enter a post-pandemic era, business leaders embed responsible practices and create multidimensional value at the core of their strategies, in order to reimagine their company’s purpose. As they extend their mission, tech-enabled innovation must be scaled across all enterprise processes; not just to improve people’s performance, but also their well-being.
About the Research
Accenture’s “Make the Leap, Take the Lead” research is the third installment in a series that builds on one of the largest enterprise technology surveys ever conducted, “Full Value. Full Stop. How to Scale Innovation and Achieve Full Value with Future Systems,” released in October 2019, and “Your Legacy or Your Legend? A CEO’s Guide to Getting the Most Out of New Technologies,” released in January 2020. “Make the Leap, Take the Lead” is based on survey responses from 4,300 business and IT professionals across 25 countries and 20 industries. More information on Accenture’s “Make the Leap, Take the Lead” research, including examples of Leader and Leapfrog companies demonstrating technology investment best practices, can be found here.