Leader, Leapfrogger, or Laggard? The 3 types of business & how to get ahead
If there's one thing that separates market leaders from the laggards following COVID-19, investment in technology is undeniably a major factor in any company's survival.
That's according to a new report from Accenture, which tracks technology investments from 4,300 respondents and how their business has leveraged opportunities during the pandemic.
The report, titled Make the Leap, Take the Lead, defines businesses into three categories: Leaders, Leapfroggers, and Laggards. These categories are determined by respondents' ‘systems strength' and their ‘flip size', which enables them to pivot their IT budgets towards innovation.
"Many companies have doubled down on their tech investments, enabling them to survive the most disruptive time in their history. But a small minority took a different approach. They have compressed digital transformation with a more aggressive and progressive technology strategy that has helped them turn the challenge of the past year into an opportunity. They have not just survived. They have thrived," the report notes.
Leaders, which account for the top 10% of the entire survey sample, are now growing their revenue at almost five times the rate of Laggards. More than 70% of Leaders reported increased investments in cloud security, and 68% increased investments in hybrid cloud.
Other popular investment areas include the Internet of Things (70%), robotic process automation (60%) and artificial intelligence/machine learning (59%).
Leapfroggers are a new category of businesses that are able to master the balance between innovation and systems strength. Accounting for 18% of the sample, these businesses use aggressive and progressive technology strategies to make their digital transformation initiatives shorter. By doing so, they have turned 2020's challenges into advantages and opportunities.
Accenture's global lead of Integrated Global Services, Ramnath Venkataraman, says that Leapfroggers grow revenue four times the rate of Laggards. They also improved their use of advanced and emerging technology by 17%, and 67% aim to aggressively boost their revenue from their non-core business lines.
The report notes that Leapfroggers also leverage thoughtful organisational change to shorten their transformation periods.
Laggards, which account for the bottom 25% of the sample set, are falling behind because they are often investing in newer technologies for the first time, but only to maintain operations. They are forced to try to catch up to Leaders and Leapfroggers.
Laggards are also least likely to consider employee happiness, with only 43% prioritising this through digital-based flexible work arrangements. Conversely, 65% of Leaders address employee happiness.
“This report shows that leaders are adopting innovative technology earlier and investing more frequently than their peers,” comments Accenture Australia and New Zealand technology lead Scott Hahn.
“These leaders focus not only on the implementation of new technology but the critical steps needed to ensure successful scaling across the enterprise, including new agile ways of working, making important changes to reinforce an innovation-led culture and upskilling their workforce. Each of these actions results in creating new sustainable value for their stakeholders.
The report provides an outline of useful strategies that can help organisations deliver greater success:
- Replatform to the cloud to build Systems Strength, reducing redundant technologies and disconnected data across the IT stack, while gaining computing power and flexibility.
- Reframe to an innovation-first technology strategy. Leapfroggers excel at shifting their mindset and viewing potential downturns as opportunities to innovate with new technology.
- Reach by expanding access to technology across internal business functions and embrace a broader value agenda by addressing personalised employee upskilling, well-being, and mental health.