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If the idea of digitally transforming your procurement department—or your organization as a whole—is daunting, you’re not alone. Across most industries right now, companies are implementing new tools, experimenting with new applications and adding new platforms that will hopefully allow them to work smarter, better and faster in the competitive business environment.
Making that happen isn’t easy, but a new Accenture report provides some guideposts that companies at all stages of the digital transformation game can follow. In “Future Ready Enterprise Systems,” the organization discerns between “leaders” (the top 10%) and laggards (the bottom 25%), and says it’s been tracking the correlation between technology adoption and achieved, or expected, value.
“The difference is staggering: Leaders grow revenue at more than twice the rate of laggards.
And the lost potential is snowballing,” Accenture points out in its report. In 2018, for example, laggards had 15% in foregone annual revenue. “If they don’t change, they could miss out on as much as 46% of their annual revenue by 2023,” Accenture warns.
5 Great Starting Points
Here’s the good news: Leaders take five key actions consistently to close their innovation achievement gaps and rise above the rest. Companies that are in the early stages of digital transformation and those that are further along the path can both benefit by taking these actions:
- Adopt technologies that make your organization fast and flexible. Leaders are moving to decoupled data, infrastructure and applications that enable greater flexibility and a faster-moving IT culture. “While leaders opt for flexible, uniform, and scalable architectures capable of responding to market demands, like seamless customer payments,” Accenture points out, “laggards find it difficult to move away from rigid IT architectures which leaves them unable to maximize investments in innovation and vulnerable to system-wide outages.”
- Use more cloud computing. Cloud computing enables companies to successfully utilize other technologies, including artificial intelligence (AI) and analytics. According to Accenture, leaders treat the cloud as a catalyst for innovation: 95% of leaders have adopted sophisticated cloud services compared to around 30% of laggards, who tend to see the cloud as a cost-effective “data-center.”
- View data as both an asset and a liability. Leaders ensure data quality, creating security measures that anticipate threats and building ethically responsible frameworks for managing data and AI. This establishes a virtuous cycle of data creation and consumption, because the quality is always improving. “90% of leaders ensure data quality, only 40% of laggards do so,” Accenture notes. “And while 90% of leaders continue to enrich their data, just 54% of laggards are doing so.”
- Manage technology investments well, and across the enterprise. Leaders have clear visibility into company-wide technology investments. In fact, 94% of them systematically track ROIs for investments in automation across the organization, compared to only 47% of laggards, Accenture reports. “Leaders work toward business alignment by breaking down barriers between IT and other departments,” it continues. “They also establish innovation centers, creating pipelines for innovation transfer.”
- Find creative ways to nurture talent. A workforce immersed in yesterday’s technologies is one of the biggest obstacles to creating the expansive, flexible, human-centric systems necessary for success. Without some retraining, 52% of the IT workforce’s skills and almost half (47%) of the non-IT workforce’s skills will be obsolete in three years, Accenture predicts, noting that 87% of leaders are using AI and advanced analytics to personalize learning, predict skills needs, and match workers’ skill requirements with appropriate training modules. “Only 35% of laggards are involved in such efforts,” it says. “Leaders also make sure their talent is not afraid to experiment and present non-traditional ideas—important components of learning and growing.”
