High Performance Through IT in China 2009

Based on this research, Accenture outlined strategic imperatives to help Chinese enterprises use IT not only to survive the current downturn, but also to position themselves for future growth.

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High Performance through IT in China 2009 forms part of the ongoing Accenture High Performance Business research initiative. It follows on from a previous study, High Performance Business in China: Jumping the Dragon Gate.

This latest report examines how Chinese enterprises can optimize their strategic approaches to IT investment and IT execution so that they are better able to navigate the current uncertain economic climate and position themselves for future growth.

On behalf of Accenture, leading IT research firm IDC conducted telephonic interviews with 48 senior business executives and 60 IT executives. To gain further qualitative insights, IDC also conducted 20 in-depth, one-on-one interviews. Respondents represented Chinese state-owned enterprises, publicly listed companies and multinationals.

Read Accenture’s previous research paper, High Performance Business in China: Jumping the Dragon Gate.

• IT has become deeply intertwined with business strategy in China, in both the public and private sectors. However, respondents reported that IT effectiveness would be enhanced by greater input by business executives into the IT strategy.
  
  
• Since 1997, IT spending has grown by an average of 14.6 percent annually, three times the global average. Despite the global crisis, it is set to continue growing at 6.5 percent, as compared to a global forecast of 0.5 percent.
  
  
• While business executives see future success as dependent on the ability to launch new products and services, IT executives focus on cost reduction and operational efficiency.
  
  
• More than half of IT executives see driving business innovation as a key IT objective, while only 35 percent of business executives agree.
  
  
• Respondents indicated that only 38 percent of customer interactions could be automated by moving them online compared to 48 percent in global economies. The same discrepancy is apparent when it comes to both supplier and employee interactions.
  
  
• Only 35 percent of IT executives and 46 percent of business executives agree that managers and staff have significant decision support or analytic functionality.
  
  
• Enterprise data governance structures and standards are the most important information management priority.
  
  
• Many Chinese organizations lack reliable and accessible financial and enterprise information—implementing enterprise resource planning software will be a priority.
  
  
• Only about half of installed applications currently meet the organization’s business and technical needs.
  
  
• Chinese organizations rate themselves nearly on a par with global peers in business continuity, networks and servers, storage and data centers.

This research indicates that IT is at the heart of the Chinese economic transformation and will continue to play a key role as China adjusts to the changed global economic environment. Accenture High Performance Business research confirms that the achievement of high performance is intimately linked to an organization’s ability to use IT not only to improve organizational efficiency but also to drive profit-generating innovation through the business as a whole.

However, Chinese organizations must be aware that the global financial crisis has increased pressure to use technology innovatively. Specifically, Chinese companies can no longer rely on gaining competitive advantage as low-cost producers—rather, they should shift their focus to creating competitive advantage through innovative products and services, improved customer service and increased productivity.

Other imperatives to survive the downturn and position for future growth include using IT to support decision making with better information and analytics; optimizing IT planning, management and execution; aligning IT better with business priorities; and improving IT governance.

Chinese enterprises must therefore concentrate on improving the ability of their IT systems to support their drive to achieve high performance, allowing them to:

• Renew competitive advantage.
• Improve management control of their businesses.
• Address IT efficiency and effectiveness.

High Performance through IT in China 2009 sets out a broad agenda for continued change that will enable Chinese enterprises to survive and then build renewed competitive advantage founded on IT excellence. However, large amounts of money to spend building IT and business capability are no longer available. Chinese executives must therefore ensure that all IT spending contributes to strategic goals.

Based on this research, Accenture recommends that Chinese organizations focus on the following actions in 2009:

• Drive customer-focused innovation.
• Integrate across the supply chain.
• Achieve productivity gains and deliver strategic cost reduction.
• Increase business integration, insight and management.
• Improve applications’ analytics.
• Boost flexibility.

Contact us to find out how Accenture can help your organization realize high performance through IT.