To restore strong growth, Chinese companies must rotate to the new. After decades of high-speed growth following the Reform and Opening-Up of China, China’s economy had been seeing declining growth, with a sharp contrast appearing between the new and old economy. On one hand, fast-growing digital economy represented by BATJ is booming. On the other, traditional industries, such as manufacturing, are experiencing stagnation in both growth and revenue. Aside from normal fluctuations in the macroeconomy, traditional industries have struggled as they find it is hard to adapt. They fail to embrace the digital economy in a timely fashion to reinvent themselves.
The growth dilemma faced by traditional industries prompted them to seek out new ways of transformation. Achieving successful transformation to compete in the digital marketplace is challenging. But digital technology and the innovative digital business model empower old industries in the new.
According to a recent Accenture research, only 7 percent of Chinese companies have accelerated their journey into the new—we call them Rotation Champions. These companies invest decisively in scaling up new tech-enabled businesses while driving continuous transformation of the legacy business. These companies derive over 50 percent of their current revenues from new businesses begun in past three years.
Rotating to the new requires two critical digital skills: Building intelligent operations and driving digital innovation in products, services, and business models
Based on the research findings on Rotation Champions, we developed an Accenture China Digital Transformation Index, which assesses the digital capability maturity of Chinese companies across various industries. We benchmarked the transformation capabilities of each company, analyzed the sources of advantages of the leaders in building core digital capabilities, and summarized the actionable suggestions for Chinese companies to accelerate.
As the Indexes of the eight major industries shows, the Rotation Champions have already distanced themselves from other companies in terms of digital capabilities and are likely to perform better than their peers.
To match Rotation Champions, companies must focus on 5 priorities as they build their digital capabilities:
Establish top-down ownership：Drive the digital transformation agenda with senior executives who have organization-wide influence. A dedicated digital transformation taskforce will also ensure effective implementation.
Build hyper relevance: Become customer-centric by sensing and addressing their changing needs. Inform the digital transformation with customer insights to become a hyper relevant brand. Leading companies trump competitors through constant service improvements based on sophisticated customer analytics.
Leverage ecosystems: Bring the best innovation to customers by harnessing the power of a carefully managed ecosystem of external partnerships, through means such as commercial collaboration across industry value chains and creating an open-source Research & Development innovation community.
Become “data propelled”: Master leading-edge technologies to build a solid supply chain of data, such as adopting cloud solutions, enhancing data infrastructure and improving data connectivity, as well as improving AI algorithms. These data-driven improvements can enable business innovation at an unprecedented level and scale.
Build an agile organization: Evolving workforces can help transform a static organization into the agile organism. This change can help companies gain a competitive advantage in the digital age. Companies also need to assess employees’ performance and evaluate their competence through data visibility.
Digital technology is continuing to drive transformation of all aspects of business. As two pillars of the strategy of rotating in the new, intelligent operation and digital innovation enhance their current business competitiveness and expand their future business landscape, laying a good foundation for achieving high-quality development in the digital economy
About the research
The Accenture Digital Transformation Index is a cross-industry framework to assess a company’s digital maturity across four layers of scoring system in two dimensions. The research surveyed 450 Chinese enterprises from eight industries including automotive, consumer electronics, logistics, retail, pharmaceutical, fast moving consumer goods, chemicals and metal.