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Digital China 2020:
An action plan for Chinese enterprises

Digital technologies have the power to be the new driver of China's future growth.

Overview

Digital technologies have the power to be the new driver of China's future growth. By harnessing the power of digital, China stands to grow its gross domestic product (GDP) by 3.75 percent by 2020 - the equivalent of adding US$527 billion to the economy during that timeframe. While China can benefit hugely from being digital, such opportunities have yet to be translated into Chinese businesses' real digital investments. Many lack a systematic approach to creating new business value from digital technologies. By building a digital transformation roadmap, Chinese enterprises can better position themselves to capture digital opportunities - and to thrive as part of "Digital China."

Background

China has grown its economy by taking advantage of the country's demographic dividend and making significant capital investments. As China's economy matures, this approach becomes less viable. As a result, China has shifted its attention toward identifying new ways to improve its economy's industrial productivity - by extracting greater output from existing labor and capital.

  • Improving productivity is key;

  • Digital technologies can drive productivity improvements;

  • China has a solid digital foundation.

Analyse

In 2015, Accenture surveyed CEOs across 32 countries. Only 52 percent of the respondents from Chinese enterprises said they would increase their company's IT investments in the next 12 months - a percentage much lower than that of companies based in other major economies.

Why are Chinese enterprises hesitant to invest in digital technologies? Our secondary research and discussions with industry experts revealed three culprits:

  • Chinese companies lack a well-defined digital strategy

  • Chinese companies are struggling to design a digital business model

  • Chinese companies have yet to decode how to operate digitally

Suggestions

Chinese enterprises must define a digital strategy, business model and operating model and execute effectively to master digital transformation.

Chinese companies need a roadmap comprising three major steps in the digital transformation journey: ambition, action and achievement

Step 1. Ambition: Define digital value to be created.
Chinese companies must start by defining how they will use digital technologies to create new business value. They can do so by analyzing a variety of factors, such as future technology developments, as well as industry and consumer trends

Step 2. Action: Foster the ownership, mind-set and capabilities needed to deliver the new digital value.
Once a company has defined its digital strategy by articulating the new forms of digital value it wants to create, it needs to foster ownership of the effort, encourage a shift in mind-set required to deliver the envisioned new value, and invest in the right digital capabilities. Together, these activities help the organization set the stage for executing the digital strategy.

Step 3. Achievement: Deliver new value by building the right digital business and operating models.
To deliver the new forms of value defined in their digital strategy, Chinese companies must build a commercially viable digital business model and a digital operating model.