The latest edition of Accenture’s (NYSE: ACN) China Digital Transformation Index shows that just 2% of Chinese companies are “undertaking the holistic, continuous digital transformation steps needed to drive long term, sustainable growth.”
Samantha Zhu, chairperson of Accenture Greater China, said:
“A convergence of external forces like technology innovation and shifting consumer preferences is increasing disruption, and creating new challenges as well as opportunities for Chinese companies. To effectively respond, organizations need to embrace a strategy focused on reinventing every part of their business. ”
The Accenture China Digital Transformation Index “reflects cross-industry research that assessed the digital maturity of companies across China.”
First published in 2018, the latest edition “analyzed five new capabilities including strategy, operations and innovation, digital core, sustainability, and talent that are key to drive business reinvention.”
The study surveyed more than 550 companies “in eight industries and has been published in collaboration with China Industrial Control Systems Cyber Emergency Response Team (CIC).”
The research indicates “that only 22% of businesses are transforming all parts of their organization, and only 28% recognize that digital transformation is an ongoing process. It also shows that organizations are lagging in building key capabilities needed for them to reinvent.”
On a total of 100, Chinese companies “scored 58 in optimizing operations, and 39 in building a digital core, which could hamper their efforts in leveraging technologies such as generative AI. Forty six percent said they will increase future investments in AI and automation.”
The report listed five key areas of action “that the 2% of leading companies or the ‘Reinventors’ focus on,” and if prioritized can help more Chinese companies achieve sustainable growth:
- Set a new performance frontier: Guided by a long-term approach, Reinventors lead a strategy across the entire business, prioritize innovation, and inspire entire industries to reach new heights. Only 14% Chinese companies set a new level of performance in their industry, and most limit their actions to their current market and competitors (66%)
- Strengthen the digital core: The technology landscape has changed, and companies need to build a cloud-first infrastructure, create the data foundations for large language models and AI, work seamlessly across technology platforms and address security threats. In the next one to two years, Chinese companies said they will increase investments in cloud (37%) and security (36%).
- Embed sustainability into strategy and operations: Sustainability can be an enabler of innovation and growth. Chinese companies must commit to embedding sustainability into all aspects of their business.