November 04, 2013
Investing in Digital Technologies and Improving Customer Experiences is Enabling Companies to Identify New Growth Opportunities and Enhance Performance, Accenture Research Finds
NEW YORK; Nov. 4, 2013 – While many organizations are focused on IT cost reduction, productivity gain and process improvement, the latest global research from Accenture (NYSE: ACN) reveals that companies that invest in digital technologies and improving customer experiences are able to identify new growth opportunities and enhance performance.
The research report, High Performers in IT: Defined by Digital, features insights from senior IT executives in more than 200 global companies across a range of industries. The report shows that high performers devote 55 percent of their information technology (IT) budgets to delivering strategic capabilities that support growth and business performance. Their counterparts, however, invest only 37 percent. Moreover, five times more businesses (50 percent) that excel in their use of IT, look beyond a narrow IT lens to consider broader business implications - social, economic and geopolitical factors - as part of their strategy and planning.
Accenture’s research found that the adoption rate of key technologies, including cloud computing, analytics, social, mobility and security, was greater across-the-board for companies that excel in their use of IT than their counterparts. According to the research, these companies have recognized and embraced the transformational impact of digital IT to create new products and services that supports growth.
For example, the high performers are leading the way in “mobilizing” their businesses. According to the research, 69 percent of them are committed to mobile transactions compared to 42 percent of other organizations, which allows their customers to reorder their favorite pair of shoes, book travel, pay for their coffee and even transfer cash between bank accounts on the go. And approximately twice as many IT leaders than non-leaders are achieving or exceeding expected business value from their investments in predictive and descriptive analytics.
“High performers are building a strong foundation for their digital business by harnessing technology advances across all parts of their operations to help improve customer experiences and make a more significant contribution to the company’s business performance,” said Paul Daugherty, chief technology officer, Accenture. “Companies that lead in the use IT understand how new digital capabilities can be applied and set their sights beyond operational effectiveness and IT productivity, and invest more in technologies to drive future growth.”
Mastering a Hybrid IT Environment
According to the findings, the leaders in IT are also moving to the cloud faster and reaping more benefits sooner than other organizations. One-third (33 percent) of the executives representing those companies responded that they are effectively replacing legacy components with private and public cloud alternatives while almost one in six (15 percent) already centrally manage a fully virtualized, dynamically provisioned hybrid infrastructure.
The survey also found that companies expect to operate in a hybrid IT environment for the foreseeable future. The top performers predict that a substantial part of their IT footprint – whether infrastructure, middleware or applications – will remain “traditional,” both hosted and on-premise. In fact, these leaders believe that they will still maintain nearly six in 10 of their applications (59 percent) in a traditional license model by 2020.
It’s clear that high performers are more effective in taking advantage of cloud technology considering that:
- 40 percent see measurable improvements in IT agility, with only 9 percent of other organizations claiming the same.
- 43 percent declared strong results in aligning between project portfolios and IT business goals, a 23 percent advantage over other organizations.
- 33 percent see direct cost reductions as a result of their cloud investments while only 14 percent of other organizations see similar results.
Leaders in the use of IT have been investing in master data management and data quality assurance for years, and as a result, they hold a significant advantage in the race to getting the right data. Their investments are now paying off. According to the research, twice as many high performers as other organizations are achieving or exceeding the business value they expected in key areas such as data management (77 percent vs. 30 percent), content management (77 percent vs. 23 percent) and predictive analytics (54 percent vs. 21 percent).
By successfully navigating the dynamics between information and business processes and systems, those performing at the very top are much better equipped to build strategic analytic capabilities than their counterparts. Almost half (46 percent) say they already have developed and capitalized on new insights on changing customer behavior, compared to just three percent of other organizations.
It Really is All About the Customer
Leaders in IT consistently chose customer-focused business objectives among the top three priorities that guide their IT investment strategies. This includes providing the right information to the right person at the right time, finding better ways to interact with customers and delivering new services and products to customers. They also rated front-office applications among their best-performing in terms of technical and business adequacy, which was significantly higher for their companies than for other organizations.
Managing IT Security and Business Risk
Organizations are increasingly focused on ensuring the security of their growing digital business but many struggle to keep pace with new security technologies. Although most survey respondents believe they currently have the right level of investment in compliance and overall security, 44 percent concede that they have been underinvesting in cyber-security. There is a general acknowledgement that endpoint security is not sufficient. But the shift to active defense strategies – staying one step ahead of the attackers – has not yet taken hold. Still, 75 percent of high- performing organizations have made it a priority to further lower their risk profile and more rapidly upgrade their IT security practices within the next year.
Download the Accenture High Performance IT report at www.accenture.com/highperformanceit and contribute to the discussion on Twitter at #DigitalIT.
About the Research Report
Accenture has been producing the High Performance IT research report since 2005. The 2013 High Performance IT research report is based on detailed assessments conducted by the most senior IT executives in 202 of the world’s largest private and public sector organizations in North America (19 percent), Latin America (15 percent), Europe (45 percent), and Asia Pacific (20 percent). These companies have combined annual revenues of $2.4 trillion, represent a wide range of industries and include both Accenture clients and non-clients.
Accenture is a global management consulting, technology services and outsourcing company, with approximately 275,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.
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Peter Y. Soh
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