Friday, September 24, 2021

Companies that Scaled Technology During COVID-19 Grew Revenue 5x Faster than ‘Laggards’

NEW YORK — Companies that “doubled down” on their investment in mostly data-heavy technology during the COVID-19 pandemic have seen their revenue grow five times faster than businesses lagging behind in innovation, according to a recent report.

The report, “Make the Leap, Take the Lead,” by the global consulting firm Accenture defines “leader” companies as those “stepping up” their adoption of tech, including the cloud, artificial intelligence (AI) and the Internet of Things (IoT). The firm released the report last week.

Companies that “just recently” invested in newer technologies for the first time are defined as “laggards” in the report. Their spending on tech was largely to maintain business operations during the pandemic, according to Accenture.

The firm’s research shows that technology enables companies to “not only survive, but even thrive during one of the most disruptive times in history.”

In the same report in 2019, leaders’ revenue grew two times faster than laggards — or at a rate 60% less than now.

“COVID-19 has only widened the gap between leaders and laggards,” the report says.

Companies that compressed their digital transformations into a shorter time frame, from years to months, and converted pandemic-related challenges into business opportunities are defined as “leapfrogs” in the report. Their aggressive tech strategy helped them see their revenue grow four times faster than laggards.

“Leaders are adopting innovative technology earlier and investing more frequently than their peers,” said Annette Rippert, group chief executive of Accenture Strategy and Consulting.

“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.”

See more: Enterprise IT: Creating The Efficiencies to Invest in Innovation

Where leaders invest in tech

The report shows how leader companies approached their technology spending:

  • 70% increased investments in cloud security 
  • 70% dug deeper into IoT
  • 70% looked to aggressively increase funding on training to build an agile and collaborative organization 
  • 68% increased investments in hybrid cloud
  • 66% are more dedicated to creating seamless interactions between humans and machines 
  • 60% accelerated investments in robotic process automation (RPA)
  • 59% dug deeper into AI and machine learning
  • 50% increased investments in core and emerging technologies

See more: Cloud Data Protection: Best Practices

Technologies adopted

The firm’s researchers considered innovative technology as being one of the following market segments:

Emerging tech: blockchain, extended reality, open source, 3D printing, robotics

IT infrastructure: DevSecOps, server-less computing, cloud native applications, containers, docker and kubernetes, micro-service architectures, distributed logs/event hubs, react/event-driven architectures, FaaS

AI and automation: deep learning, machine learning

IoT: edge/fog computing

Cloud: SaaS, IaaS, PaaS, hybrid cloud

Data: Data lakes/repository, streaming/real-time data, big data analytics

See more: Top Data Analytics Tools & Software 2021

Strategic imperatives

Looking at both leaders and leapfroggers, the report found each of type of company demonstrated three shared goals:

  1. Re-platform: They commit to the cloud “in a big way.” They move to and innovate in the cloud.
  2. Reframe: They adopt an “innovation-led strategy.” They adapt as needed and often collaborate with ecosystem partners and startups on IT.
  3. Extend reach: They expand access to technology across functions and widen business priorities around re-skilling employees.

Report methodology

“Make the Leap, Take the Lead” is based on a survey of 4,300 C-level IT and business executives, interviews, case study research and economic modeling. The survey was conducted between December 2020 and January 2021.

Companies were scored on their “systems strength” — or technology adoption, application of technologies at scale and organizational and cultural readiness for tech-enabled innovation — as well as their “flip size” or shifting their IT budget from operations to innovation-related activity.

Researchers determined which companies were leaders (top 10% of sample), leapfroggers (18% of sample and from a set of “others”) and laggards (bottom 25% of sample) and then looked at the financial performance of each group.

Companies range in the size from $500 million in annual revenue to over $25 billion in annual revenue. 

They represent 20 industries and markets: banking; capital markets; insurance; media and communications; telecommunications; high tech; software and platforms; utilities; energy; chemicals; metals and mining; health; public services; U.S. federal government; retail; consumer goods and services; travel; industrial equipment; life sciences; and automotive.

They’re based in 25 countries: Canada; United States; Brazil; Denmark; France; Italy; Germany; the Netherlands; Norway; Spain; Sweden; Switzerland; United Kingdom; South Africa; China; India; Indonesia; Japan; Malaysia; Thailand; Saudi Arabia; Singapore; United Arab Emirates; and Australia

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