Overview Before the COVID-19 pandemic, Leaders in enterprise technology were growing 2x faster than Laggards. In our latest research, we found that Leaders have doubled down on their tech investments and are now growing 5x faster than Laggards. We also discovered a group of “Leapfroggers” who are compressing digital transformation, growing 4x faster than Laggards and closing the gap with Leaders in 3 strategic steps. At the leading edge In 2019, our landmark research on enterprise technology strategies and their impact on performance showed that Leaders in tech adoption and innovation were growing revenues at 2x the speed of tech Laggards. Curious about the effects of the pandemic, we completed a second round of research in early 2021 and discovered the following: Technology Leaders have moved even further ahead of the pack and have been growing at 5x the rate of Laggards on average in the past three years. Among the “Others” there is a group of organizations—18% of the entire sample—that has been able to break previous performance barriers—the Leapfroggers.
Leaders have extended the revenue gap over Laggards Source: Intellylabs Research Leaders have extended the revenue gap over Laggards Leaders direct their IT budget toward innovation Doubling down on enterprise tech adoption Leaders tend to adopt innovative technology sooner and reinvest more frequently. They make smarter tech investment decisions. And they direct their IT budget toward innovation. When the pandemic began, Leaders scaled their investments in key technologies such as cloud and AI. This helped them absorb impacts quickly and refocus on growth. In sharp contrast, many Laggards invested in newer technologies for the first time just to keep their companies operational. As the COO of one large bank explained: “The initial moves to the cloud we made have been about keeping the lights on.”
Scaling technology for performance and success Leaders focus on innovative outcomes that extend beyond classic economic measures. In less than five years, India’s Jio, a telecommunications subsidiary of Reliance Industries, has grown into a tech Leader on the strength of strategic investments in fixed assets like cell towers, fiber optic cables and cloud data centers. Because of these investments, Jio is in a position today to accelerate the digital transformation of the Indian economy. Leaders also focus on delivering the best possible user experience to engage with employees and customers more effectively. Almost all industries were required to do business virtually because of the COVID-19 pandemic. Leaders seized this opportunity to create new, meaningful experiences.
Leapfroggers are the ones to watch. They are overtaking peers and catching up with Leaders. What makes a Leapfrogger? We see the combinatorial effect of two factors:
01 Leapfroggers build core Systems Strength in the cloud. They have adopted advanced and emerging technologies and scaled them across their enterprises. 02 Leapfroggers flip their IT budget allocation to favor innovation. In contrast to the 30% share we usually see spent on innovation and the 70% spent on maintenance and operations, they reverse that split entirely.