Companies will die unless they transform their approach to technology innovation, a CBI-Oracle report has found
A joint report from CBI and Oracle – ‘Bigger, Faster, Stronger’ has found that being a big company is no longer enough. Many larger businesses are struggling to transform digitally and are suffering.
The report said that greater adoption of technology could unlock productivity and wage growth. Research shows that more adoption, coupled with better management practices, could add £100 billion to the UK economy and cut income inequality by five percent. However, only 54 percent of UK companies believe disruptive technologies play an essential role in their organisation, much lower than in countries such as France, Germany, India and Russia.
Since the 2008 Financial Crisis, UK productivity growth has slowed considerably compared to many G7 competitors, with key sectors such as financial services and construction experiencing negative growth. At the same time, a productivity and prosperity gap is opening up between companies willing to invest in the latest technologies and those that are not.
The research highlights that more substantial companies – which account for 48 percent of UK turnover and employ 40 percent of its workforce – are especially struggling to transform digitally. They face a range of issues including skills scarcity, complex legacy systems and a 25 percent greater threat from cyberattacks compared to other companies. By contrast, smaller start-up companies are more likely to adopt new technologies, while firms aged over 15 years are the least likely.
Felicity Burch, CBI Director of Digital and Innovation, said: “No business can rest on its laurels when it comes to technology. Big firms must be doing all they can to stay ahead of international competitors and adopt new technologies that will boost productivity and efficiency.
“Many will assume that with the resources at their disposal, it’s easy for large firms to adopt new technology. But a host of challenges, from ageing legacy systems, cybersecurity threats and agile new challenger firms can make successful innovation feel like hitting a moving target.
“For the UK’s big hitters to secure their position as world leaders over the next 10 years, senior business leaders must be prepared to challenge their established ways of operating and cultivate an environment that encourages employees to seek innovative solutions to company-wide issues, or these companies risk extinction.
“If larger businesses don’t want to become dinosaurs, they need a long-term plan for the adoption of new technologies. But they cannot do this alone.”
Neil Sholay, Vice President of Digital Innovation at Oracle, said: “In any digital transformation project, culture is crucial and knowledge is power. Both the latest technologies and connected thinking are needed to ensure the benefits of innovation are felt at all levels of the organisation. Digital innovation is everyone’s job, and everyone should be willing to learn from exemplars in other companies and sectors.
“One of our customers, West Midlands Police, wasn’t unique in the challenges it faced, but it’s a great example of utilising technology to its fullest. By adopting a shared services model in its back-office based on a standardised Oracle software-as-a-service module, West Midlands was able to create £36 million in savings and streamline processes for officers. This not only cut resolution time to 24 hours for 80 percent of operations, it doubled reported satisfaction.
“At the same time, innovation isn’t an endgame, it’s a constant process of transformation. The only constant today is disruption, so businesses need to evolve ruthlessly fast to keep up with it. That means providing employees with the tools they need to be creative, collaborative and agile at all times.”
