How Chinese companies can strengthen digital transformation
While Chinese companies have been making steady progress in digital transformation over the past five years, the overall pace of enterprise digital transformation has slowed in China this year, new research from Accenture finds.
The research found a slight increase of one percentage point in the number of companies who make decisive investments in adopting and scaling digital technologies to drive continuous business transformation.
Dubbed ‘Champions’ by Accenture, these companies have grown to 17% in 2022, compared to 7% in 2018, but this year the average score measuring digital proficiency declined for the first time in five years from 54 to 52 between 2021 to 2022.
This comes amid an increasingly complex business landscape, with increased market volatility and supply chain disruptions, where raising competitiveness and creating value in new ways has never been more crucial.
“Sustainable, purpose-led, high-quality growth companies and the continued modernisation of industries is the key to China’s future economic development,” says Samantha Zhu, chairperson of Accenture Greater China.
And in the current environment, it is key for companies to maintain productivity while also upskilling their workforce and so it’s critical that they “continue to invest in digital technologies to strengthen their core and drive continuous innovation.”
According to the report, digital transformation Champions are generating more than 50% of their current revenues from business activities that were implemented in the last three years.
Champions generating much higher revenues
All companies were measured on a range of metrics that look at how they are using digital technologies to drive innovation, enhance operations and create new opportunities for growth.
The research found that across the board, companies are prioritising data-driven operations, but are less focused on R&S, indicated by a 28% drop in providing customised products and services.
Champions in particular are developing smart products or services 8X more than others score-wise and are driving R&D through collaborative digital platforms more than 2X higher.
The research further found that while most business leaders said they would increase their digital investments in the next 1-2 years, they plan to do so more pragmatically and prudently by paying closer attention to the immediate financial returns of digital projects.
How Chinese firms can strengthen digital transformation
To help companies successfully translate digital investments into financial performance, Accenture has launched a digital evolution roadmap, which they hope will help companies “better track and manage the progress of their digital transformation efforts, unlock the value of digital, and achieve total enterprise reinvention,” says Zhu.
The report lasts key areas of action that can help Chinese firms strengthen their digital transformation:
- Leverage open innovation for long-term growth By developing a full suite of innovation capabilities across their ecosystem of customers, partners and suppliers, companies can reshape their competitive advantage – from improving technology, to supporting industrial upgrades and sustainable development.
- Lead with human centricity Shift the focus from optimising touch points to offering value by developing products and services that meet customers’ essential needs and providing human-centric experiences with the help of digital technologies.
- Build platforms for a diversified workforce Upskilling people in the digital environment will greatly improve operational efficiency and help drive innovation.
- Enhance data-driven intelligent operations Accelerate data aggregation to ensure the quality and availability of the data on the cloud and pave the way for seamless data flow to support more frequent and complicated decision-making processes.
- Develop resilience through transparency Gain full visibility across production lines, customers and suppliers by deploying analytics and AI. Secure a resilient supply chain to predict potential risks and act on them in real-time.
- Realise the full potential of tech As new digital technologies continue to emerge, leverage them to further accelerate reinvention and achieve synergy in products and services innovation, management and ecosystem development.
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