Fact: Speeding Up Digital Innovation Makes You Richer

Image credit: iStockphoto/Nattakorn Maneerat

Some risks are simply more worth it. And increasingly, technology-led innovation looks like one of them.

A new Accenture report, “Make the Leap, Take the Lead,” validated companies that bet on accelerating their tech innovation during the pandemic.  

The report showed that these so-called ‘Leaders’ are now growing revenue at five times the rate of ‘Laggards’. 

Accenture’s study is based on a global survey of 4,300 global executives across 25 countries and across 20 industries, which includes 1,150 APAC executives and 200 Southeast Asian executives.

Leaders, who represented the top 10% of companies in the research sample, were strong in adopting new technologies across their organization. Laggards, who represented the bottom 25, invested in newer technologies for the first time over the past year just to keep their companies operational.

“[This report] has highlighted the opportunities in play when companies move from operational-related activities to innovation-based activities like software development and building new processes in ensuring successful scaling across the enterprise,” said Ryoji Sekido, senior managing director for technology & cloud-first lead for Asia Pacific, Africa, and the Middle East at Accenture.

The APAC data showed that overall, technology adoption in APAC increased to 90% (89% in South East Asia) in 2021, from 80% (85% in South East Asia) just two years ago in 2019.

But unlike the Laggards, the pandemic motivated the Leaders to do more. The research showed that these companies doubled down on their technology investments and scaled innovation across their organization during this period.

For example, 72% of Leaders in APAC (51% in Southeast Asia) invested in the Internet of Things (IoT), and 74% (46% in South East Asia) in cloud security during the pandemic. 

However, the Leaders’ pole position is not guaranteed. They need to watch out for a fast-growing category of companies called the ‘Leapfroggers’ (18% of the entire global sample).

Leapfroggers are breaking previous performance barriers to catch up with Leaders and outpace peers, said the research.

They excel at shifting their mindset and viewing potential downturns as opportunities to innovate with new technology. Scaling innovations became the number one priority for Leapfroggers during the pandemic, and 67% seek to increase revenue from non-core business lines aggressively.

According to Accenture, Leapfroggers have a high “Flip Size,” which means they are actively shifting their IT budget from operations-related activity to innovation-related activity (from 70% to 30%). It speeds up software development cycles, changing business processes, and building new capabilities.

So, what makes Leapfroggers potential threats to Leaders? Accenture highlighted three steps that allow them to catch up:

  • Replatform: By prioritizing and moving the majority of workloads to the cloud, they build what Accenture called Systems Strength, reducing redundant technologies and disconnected data across the IT stack while gaining computing power and flexibility. 80% of Leapfroggers had adopted some form of cloud technology by 2017, but that figure rose to 98% by 2020. 
  • Reframe: By adopting an innovation-led technology strategy, many are shifting their focus, changing their mindsets, and treating potential downturns as opportunities to innovate with new technology. APAC companies, on average, reported higher levels of technology adoption during COVID-19 as compared to other regions, with 59% of APAC companies adopting information technology processes during the start of the pandemic, as compared to 54% of global companies.
  • Reach: They are expanding access to technology across internal business functions and embracing a broader value agenda by addressing personalized employee upskilling, well-being, and mental health.

Image credit: iStockphoto/Nattakorn Maneerat