Cloud, analytics, mobile, and new communications capabilities are ushering in a new period of industry disruption. Most CEOs in the high-tech industry are making major commitments to the digital technologies that are transforming business.
But Accenture analysis reveals that the vast majority of the world’s leading technology companies are not currently translating these digital investments into better financial performance, and importantly, new business growth.
To better understand how companies are positioned to reinvent their business using digital, Accenture examined the digital performance of 55 of the largest companies in high-tech, and identified leading practices from companies that coupled digital and financial success—the Digital High Performers.
The PLAN dimension reflects whether companies see digital trends impacting the business, plan strategies and budgets for digitization, act decisively on digital, and take a leading role in digital development in their industry rather than reacting to it.
Our analysis found that when it comes to digital performance, overall high-tech companies excel at planning, and over 79% have a Chief Digital Officer or equivalent.
Acting early on disruptive trends is critical
For a high-tech company to be a Digital High Performer, seeing and acting on new digital trends must be integral to its strategy. The accelerating trend toward “as a service” business models” is a prime example.
Cloud, analytics and automation architectures behind “as a service” accelerate innovation, reduce costs and grow revenue.
Enabled by these plug-in, scalable, consumption-based services, high-tech companies can achieve significant, measurable business outcomes.
Our new perspective, A New High-Tech Industry is Born, looks at the capabilities required to manage this large scale change. For more information visit www.accenture.com/high-tech.
Our analysis reveals that high-tech companies are more advanced in the deployment of digital capabilities in design, build and run activities (MAKE) than they are in digital adoption in the SELL or MANAGE aspects of their business. For example, over 68% openly use crowd sourcing for idea generation.
Digital High Performers are leaders in digital product and service innovation that unlocks new revenue streams.
The digital world calls for changes that extend beyond the traditional borders of the enterprise and involves an entire ecosystem of partners, customers and suppliers.
As the product release cycles change from 12 to 18 months to continuous delivery, R&D can no longer be separated from enterprise infrastructure.
When all this is properly planned and executed, it will improve the way companies can innovate and manage costs and ultimately increase returns on R&D investment.
Are you making the right investments in digital to fuel high performance in Research and Design?
Accenture Product Lifecycle Services can help our clients create new revenue generating business models to designing efficient manufacturing operations that can deliver value-making innovation to market at lower costs. For more information visit www.accenture.com/PLS.
The SELL dimension of Digital Performance reflects the extent to which companies engage customers through digital means, sell through multiple integrated channels and serve customers with a seamless experience post-sale or subscription.
Our analyst found that while 82% of high-tech companies allow customers to view and comment on products/services via the company's own users' forum, overall the digital performance of high-tech companies in “SELL” capabilities is weaker relative to their ‘PLAN’ and ‘MAKE’ capabilities.
Digital capabilities are critical to sales and service enablement.
Digital High Performers are digitally enabling customer experience management by anticipating customer needs and desires.
Companies that are already providing cloud-based services have a clear advantage as they can monitor how their service is being used, determine how to cross- and up-sell their services, and improve the customer lifetime value for the company.
Digital investment in sales and channel spend that is tightly aligned with overall business strategies for growth can improve customer engagement, bolster sales productivity, and lift revenue.
Accenture Sales and Channel Services presents a compelling, and in many cases, self-funded opportunity to help clients accelerate profitable sales growth. For further information visit www.accenture.com/salesgrowth.
When it comes to embracing digital in renewing and managing the corporate culture and internal operations, high-tech companies are facing significant challenges (as indicated by a low overall average score of 2.4 out of 4 in the MANAGE dimension). And for those companies that are ready to move to “as a service” business models, there are direct and immediate impacts on corporate culture and operations.
Digital’s disruptive impact on the enterprise is forcing companies, organizations, and governments to reimagine traditional functions— everything that drives a connected enterprise across business functions. For example, while 86% of High-Tech companies indicate that they continuously assess their cyber security, only 55% are open about hosting special initiatives to stress test their digital capabilities.
Digital High Performers are more advanced in digitally transforming their corporate culture and internal operations. With efficient, digital processes in place, employees have more time for innovation and tackling higher-level priorities.
Digital High Performers distinguish themselves by focusing on:
Digital High Performers are not only leaders in digital performance; they also demonstrate superior financial performance and shareholder value. This underscores the importance of having a thorough understanding of how digital disruption is transforming the high-tech industry and the ability to clearly articulate business strategies and associated digital initiatives that will most benefit the company in a digital future.
The Accenture Digital Performance Index is a cross-industry assessment framework developed by Accenture. It is based on a comprehensive review of publicly available information contained in investor materials (annual reports, financial filings, presentations, etc.), articles, interviews and corporate websites, to check for evidence of digital enablement in specific activities and metrics within each of four business dimensions: PLAN, MAKE, SELL, MANAGE.
A scale of one to four was used to rate company performance on each activity. A score of four indicates very strong evidence was found, while a score of one indicates no evidence was found.
The high-tech industry assessment was conducted during the November 2015 to January 2016 period and included 55 of the largest industry companies globally. Based on the aggregate company scores, Accenture identified the top 25 percent of high-tech companies making significant progress in their digital capabilities, which we designate as Digital High Performers.