RESEARCH REPORT

In brief

In brief

  • Germany's Top500 companies have experienced slower-than-expected growth during the pandemic.
  • A multidimensional transformation requires a focus on supply shortages, changes in value systems, and the pressure to innovate.
  • Success comes to those who use technology to drive innovation, understand sustainability as a core business element, and focus on their talents.
  • Accenture makes concrete recommendations that help German companies on their transformation journey.


The Top500 multidimensional transformation

The pandemic has contributed to the ongoing impetus of digital pioneers – adding pressure on the Top500 to innovate. We have seen slower-than-expected economic growth in the past two years in Germany. The geopolitical tensions in 2020/2021, supply chain shortages, demographic changes, and inflation have also left their mark on businesses. Today, running a sustainable business is no longer optional. So what can companies do to ensure their success?

Accenture's Top500 study looks at the most successful German companies, analyzes their business models, and summarizes best practices and recommendations. The findings are very relevant to today's unprecedented developments in Ukraine and will remain pertinent as the factors mentioned will most likely get worse.

How organizations will manage to accelerate their multidimensional transformation remains to be seen.

In 2020, the German Top500 recorded revenue losses of 3.9%. Large-scale companies coped better than the overall German economy, whose national gross domestic product (GDP) decreased by 4.6%.

Nevertheless, they were affected more by the pandemic than by the global economy (global GDP dropped by only 3.4%.) There is no denying that transformation will have a significant impact on competition. Successful start-ups, dynamic SMEs, and large companies driving transformation will prevail through innovative business models. As a result, those that remain stagnant will struggle.

More complex requirements in a new world

In recent years, the conditions for positive revenue growth for the Top500 groups have changed drastically – and it is all thanks to one major external factor: digital transformation. Society's change in values demands more sustainable action – and the same applies to the shortage of skilled workers. On the other hand, companies are facing geopolitical tensions and government regulation in times of crisis. Among other things, these challenges lead to disruptions in supply chains and thus to bottlenecks in production. These developments are causing companies to recognize that it is time to adapt quickly.

83%

German companies are facing technological changes of unprecedented scale and speed.

-10,3%

Sales in the leading automotive industry plummeted by over 80 billion euros in 2020.

81,9%

German manufacturing companies are struggling with shortages of preliminary products.

Technology shift puts companies under pressure

Whoever is first to use the latest technologies is the winner. In particular, the USA and China are ready to disrupt.

The demand for sustainability is skyrocketing

Legislation, customers, and investors demand action: Companies must establish new standards across the value chain.

Supply bottlenecks have an impact on business

Resource scarcity is the new normal. As the focus of the Top500 remains on export, turnkey production and low stock inventory pose a growth risk.

Skill shortage deepens

With increased job vacancies and a lack of digital transformation experts, demographic changes are only making things worse.

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What the Top500 must act on now

The Top500 are under pressure to speed up transformation in a highly competitive environment. As a result, many executives are changing their mindset and realizing the urgent need to take action, but they still remain unsure which path to follow out of the crisis.

Accenture recognizes three significant strategic courses: innovation, sustainability, and talent management. Only those who master these milestones can count themselves among the future growth champions.

In the years to come, the Top500 companies will need to focus heavily on their multidimensional transformation.

Fleeting the crisis through innovation

Globally, Top500 firms must seek opportunities in technology competition. On average, they plan to increase digital transformation budgets by 6.1%.

Sustainability by design

Business leaders are increasingly looking at sustainability in new products, services, and processes from a competitive advantage standpoint.

Invest now in talent management

As labor market bottlenecks continue to worsen, the Top500 are looking at new channels and rethinking work models.

Generating new growth and creating experiences with technologies

To develop future-ready business models, the Top500 companies need to invest in hardware and software to generate, analyze, and use data.

Cloud technologies are emerging to become the backbone for how businesses should operate, enabling enterprise-wide business models. As the world becomes more complex, companies will be less able to provide the critical technology mix for breakthrough new products and services.

Cloud-based solutions play a crucial role in creating new customer experience – a key differentiator in the market.

Using sustainability as competitive advantage

Companies that have integrated sustainability management into their processes generate an EBITDA margin that is 21-percent higher than the average. Now, more executives recognize sustainability as a competitive advantage and an innovation driver. Measuring sustainability goals and reporting on its progress need to be in focus.

Rethinking ways of working

To seize future opportunities, you need the right people. Companies need to attract enough skilled workers with the right qualifications despite the demographic changes. In today's hybrid work landscape, organizations also need to customize work models, decentralize teams, and build a new culture driven by innovation. Lastly, they also need to become attractive in global talent networks and incorporate outsourcing strategies.

For the Top500, the past few months have been a departure. Taking small steps toward innovation no longer works. Bold steps yield significant growth.

Christina Raab

Market Unit Lead – ASG


Moritz Hagenmüller

Senior Managing Director – Accenture Strategy, Austria, Switzerland & Germany

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