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The findings are from Accenture’s FTSE 350 Focus Index, which applied a Natural Language Processing algorithm to the FTSE 350’s 2019 and 2020 annual reports to better understand the impact of business and technology priorities on financial performance, analysing over 60 million semantic data points.
Technology was the fifth most discussed topic in 2020 – accounting for 16% of all subject matter– trailing only such mandatory reporting topics as ‘tax & profit’ (58%) and ‘financial reporting’ (41%), in addition to ‘fraud’ (16%) and ‘efficiency’ (16%). Priorities relating to ‘people’ and ‘purpose’ also gained a respective 92% and 53% leap in mentions in 2020.
Technology rises on company agendas across almost all industry sectors
Technology has become a major priority for nearly all of the FTSE 350’s industry sectors this year, but traditional sectors have seen a greater shift in focus than others. Businesses in the Transport sector increased their discussion of technology topics by 74% YoY – the biggest jump – followed closely by the Industry and Construction (66%), FMCG & Retail (60%) and Banking sectors (56%), as the global pandemic spurred traditional industries to accelerate their technology strategies.
Unsurprisingly, businesses in the Software sector devoted the biggest share of their reporting to technology, at nearly a quarter (22%), followed by Telecoms (20%), Media (18%), Medical (18%) and Utilities (16%) businesses as they continue to develop their digital infrastructures.
“The UK economy continues to benefit from the performance of the technology sector, as well as the overall growing investment in cloud, AI, and other technologies enabling digital transformation. The technology sector also continues to outpace all other sectors and remains an attractive hub for global investment. At the same time, the UK is home to some of the world’s most promising scale-ups and is at the forefront of innovative research solving some of society’s most pressing problems. But as we look to return to economic growth, it is paramount that we are levelling up across every sector of the economy by encouraging more businesses to adopt digital technologies,” commented Shaheen Sayed, Technology lead at Accenture UK & Ireland.
Cloud boosts FTSE’s performance
The data collected indicates that companies’ increased technology focus helped drive some of the FTSE 350’s top financial performers in 2020, despite the significant challenges posed by Covid-19 and Brexit. According to the Index, the FTSE 350’s best-performing companies – those whose share price rose to 34.4% or more – discussed technology in this year’s annual reports an average of 21% more than their Index peers.
Most of the various technologies mentioned by the FTSE 350’s top performers are associated with, or dependent on, cloud computing. A full 100% of mentions of Cloud Virtualisation technologies were associated with the FTSE 350’s stronger performers, followed by four-fifths of mentions of IoT technologies (82%), two-thirds of DevOps mentions (67%) and three fifths for Cloud infrastructure (63%). Intelligent automation capabilities also had a stronghold amongst the FTSE’s top performers, including Robotics (60%) and AI technologies (57%).
Defined technology strategy driving financial success
The Index also found that top performers were more likely to be explicit about their digital capabilities than their peers. Weaker performing companies were more reliant on general terms when discussing technology, accounting four-fifths of the mentions of ‘digitisation’ (79%). This suggests that these companies have a less defined idea of the specific technologies that will deliver value to their business.
“The COVID-19 pandemic has shown how vital technology is to the way we live and work, and the same lesson is now being learned by businesses,” Sayed continued. “The message from our research is clear, the companies that are embracing technology the most are often the ones seeing better financial results.”
“More than ever, we’re seeing the CIO and CTO exercising their critical role in the boardroom to ensure digital transformation projects are aligned to business priorities,” said Maynard Williams, managing director, Accenture Technology UK & Ireland. “For enterprises, the focus should remain on building robust digital platforms that are supported by the appropriate cloud infrastructures, informed by AI capabilities, maintained by DevOps processes and scaled out to channels such as IoT. Having a platform in place that’s truly aligned to the needs of the business means true transformation can be achieved, enabling businesses to scale and foresee the needs of tomorrow, incorporating new technologies as they emerge.”
Accenture recently announced the creation of Accenture Cloud First, a new multi-service group of 70,000 cloud professionals, and a $3 billion investment over the next three years to rapidly expand its cloud service capabilities and offerings. Accenture Cloud First integrates the company’s wide-ranging cloud expertise to help clients across every industry accelerate their digital transformation and realize greater value at speed and scale by rapidly becoming "cloud first" businesses.
