In its “Make the Leap, Take the Lead” report released on Thursday, May 19, tech outsourcing titan Accenture said companies leading in technology investment have seen five times more growth in revenue during the pandemic than businesses lagging behind in this area.
Accenture began studying how technology investments impact a company’s business performance in 2019. From this study comparing the levels of technology adoption, Accenture was able to classify businesses into two categories: Leaders and Laggards.
Pre-pandemic, Leaders’ revenue was growing at double the rate of Laggards. The widened growth rate gap between Leaders and Laggards recorded in Accenture’s latest research is evidence that the top 10% of companies leveraged their previous investments to absorb Covid-19’s impacts.
Moreover, the report showed that the companies scaled up their investments during the pandemic to refocus on growth. Over 50% of leaders accelerated their investments in areas such as security, real-time data, cloud, and IOT technologies during the pandemic.
Diving deeper into their investments, over 70% of Leaders increased spending on cloud security and 68% of Leaders further explored hybrid cloud. More than 70% of Leaders also supported the adoption of Internet of Things technology and 59% funded expenditures on AI and machine learning.
“If there’s one thing we can say about this crisis, it is that it’s not stifling innovation at all. It’s accelerating it even further. It’s like a big fast forward button has been pushed,” said Ambe Tierro, senior managing director of Accenture Technology Philippines.
If a company is not a Leader, however, it does not imply that is inevitably a Laggard. Accenture said there is a third type of company: the Leapfrogger.
“Even if you’re not leading today, there is a chance to leapfrog. In our research, the Leapfroggers are about 18% of the sample size of the companies that we interviewed, and they’re breaking barriers,” Tierro revealed during the press briefing.
Leapfroggers have a revenue growth rate that is four times that of the Laggards. Aside from revenue, they set themselves apart from the Laggards by building their core systems strength through adopting and scaling new technologies across their enterprises.
Leapfroggers specifically expand their digital capabilities by moving to and innovating in the cloud. Another distinctive trait of these companies is that they understand the potential, beneficial applications of technology for well-being. They embrace a broader value agenda targeted at employee reskilling, well-being, and mental health in their technology expansion plans.
Additionally, they differentiate themselves from the Laggards by flipping their IT budget allocation. Where only 30 to 40 percent of past budgets were focused on innovation, these companies allocate an average of 60 percent of their funds on innovation and discretionary spending and only 30 percent on maintenance and operations. The final 10% usually goes into savings due to the maximized efficiencies that result from automation.
Accenture pointed out that the emergence of Leapfroggers can serve as a guide for Laggards to make similar pivots. In line with building core system strengths, companies aiming to improve their performance can migrate and modernize their IT landscape by pursuing cloud integrations after careful assessment and prioritization.
Struggling companies can also reach beyond traditional business goals by scaling and employing technology for employee well-being. Lastly, they can reframe their operations by freeing up capital in their IT budgets to prioritize innovations.
Completed in early 2021, the “Make the Leap, Take the Lead” report was consolidated from survey responses from 4,300 business and IT professionals across 25 countries and 20 industries. Laggards made up the bottom 25 percent of surveyed companies. The remaining 47 percent of companies were not concentrated on by the study.