Trending Insights

Digital
acceleration
Top technologies driving
growth in a time of crisis
Tech-savvy organizations are
outperforming their peers
during the pandemic. 16%pts

6%pts 12%pts
average revenue premium 10%pts
across 12 industries 9%pts

5%pts
4%pts
3%pts

1%pts

Consumer Automotive Chemicals Banking Travel Insurance Energy Retail

Products Media and Life Sciences Industrial and Utilities
Entertainment Telecommunications Products

Percentage represents the revenue growth premium between organizations with high
technology adoption (cloud, AI, mobile etc.) and others in each industry. n=1,202

Across industries, the mix of critical Cloud and artificial intelligence have
technologies to performance contribution before become more important as performance
and during COVID-19 has changed dramatically. differentiators.
Ranking of technologies according to revenue impact Top performers are

2
Mobile

Artificial intelligence
1

2
74% more
likely to use hybrid cloud to improve
security and resiliency of critical
business processes
3 Cloud 3
n=6,163

6 in 10
4 Advanced analytics 4

5 Robotic Process Automation 5

organizations adopt AI for customer

6 Internet of Things 6 satisfaction enhancement and customer
retention improvement
Pre-COVID-19 During COVID-19
n=5,425 n=6,700
Six tech-enabled capabilities
are driving success through
the pandemic.

Agility and efficiency Customer engagement

Top performers use hybrid cloud 1 Top performers employ intelligent 2
to achieve more advanced agile automation to deepen customer
development and delivery relationships

91%
more
141%
more
53%
Top performers
22%
34% 65% All others

All others Top performers

n=6,163 n=1,501

Supply chain IT resiliency and

and operations 3 business continuity 4
Top performers are Top performers are

54% more 120% more

likely to use AI for supply chain planning likely to use cloud to scale on-premises
IT and accommodate demand peaks

43%
Top performers
25% 55%
All others
28% All others Top performers

n=515 n=6,163

Workforce Cybersecurity
Top performers are 5 times more 5 Top performers are 6
likely to synthesize internal with external
data to improve workforce management 72% more
likely to use AI to gather and assess
All others threat intelligence

10% 5x
more 72%
43%

25%
10% 20% 30% 40% 50%
28%
Top performers
All others Top performers
n=1,505 n=515
Sixty percent of surveyed
executives are accelerating
their company’s digital
transformation during the
pandemic.1

Chapter 1 We used our extensive research data combined with the

latest financial performance (H1 2020) to develop a new

Betting the future ground-breaking approach and answer the following

questions:
An uneven response to the COVID-19 pandemic has
– Are some industries more sensitive to technology
taught us that to operate effectively in the presence of
adoption than others?
unanticipated crises, organizations need to be agile,
robust, and secure. They require the ability to seamlessly – Are there some key technologies that provide greater
engage customers and employees in both physical and impact on performance? Do different technologies play
digital domains. As many—if not most—organizations fall different roles in different industries?
short of this ideal, current events have been challenging— – How has the mix of differentiating technologies in each
even painful—as industries and enterprises react and industry changed during this time of crisis?
adapt.
– Does the impact of this technology mix vary by key
Challenges also present opportunities. Recognizing the business capabilities? What are the combinations that
necessity and opportunity to transform, 60 percent of optimize performance returns?
executives surveyed by the IBM Institute for Business
Here are a some of the key takeaways from our analysis
Value (IBV) indicated that they are using this time to
across 18 industries:
dramatically accelerate their company’s digital
transformation. And fully two-thirds said that the – Technology adoption has become a far more important
pandemic has allowed them to advance specific performance differentiator during the COVID-19
transformation initiatives that previously had disruption. Tech-savvy organizations outperformed
encountered resistance. their peers by 6 percentage points in revenue growth,
on average, across the 12 industries where technology
Digital transformation is really all about leveraging
acted as a performance differentiator.
technologies to re-invent and improve your business.
We know technology is now a core strategic foundation – The “technology mix” recipe for success is changing.
for most enterprises and can be a key determinant of Increasingly, cloud and AI are becoming performance
organizational survival and success. So, we asked differentiators.
ourselves how much of this is proving to be true during – Each industry has a unique “fingerprint.” Technologies
the pandemic. Which technologies make a difference that benefit one industry are not always differentiating
between high performing and struggling businesses for another.
in this period of extraordinary change and challenges?

2
In two-thirds of the industries
we studied, companies that
embraced key technologies
have gained a significant
revenue premium during
the pandemic.

In two-thirds of the industries we studied, companies

that embraced key technologies have gained a significant
Insight: Retail industry
revenue premium during the pandemic. The revenue premium for technology adoption in the
retail industry has been high. Businesses in the top
This is also reflected in a new study of CEOs by the IBM
10 percent of technology adoption outperformed their
Institute for Business Value (IBV) due to be published
peers by 16 percentage points on revenue growth
later in 2020. That survey suggests that CEOs are firmly
during the pandemic. For a typical USD 10 billion
set on transforming their organization’s technological
revenue company, this is equivalent to a revenue
architecture to achieve the agility and responsiveness
premium for high technology adopters of USD 1.6
needed to successfully navigate the COVID-19 pandemic.
billion a year.
As we have seen during the pandemic, many complex
external factors are influencing the relative performance of
industries, including: stay-at-home orders, travel
restrictions, disruptions of global supply chains, regulatory
constraints, and variation in commodity prices. Similarly,
we are very clear that many factors influence the
performance of a given business, not just technology.
However, this research revealed some stark differences in
how individual technologies shape organizational
performance and how the relative importance of various
technologies has changed significantly as a result of the
recent disruption.

These and other findings can inform your strategy and help
guide and prioritize technology investments. You can use
this report to understand how and where you can apply
transformational technologies against key capabilities in
your business.

As you approach this digital acceleration, keep in mind the

bigger picture:

– Invest in market-making business platforms, define a

new business blueprint, and apply funds toward
existential vs experimental decisions.
– Apply exponential technologies to re-invent the way
works get done into intelligent workflows. Use real-time
data to guide decision-making, improve outcomes and
optimize process performance.
– Unify processes across user experiences and traditional
process silos delineated by business unit and/or
enterprise applications. Architect and deploy on an
hybrid multicloud architecture to “build once, deploy
anywhere.”
– Fundamentally change resource focus to creating
experiences and human connections, elevate human
technology partnerships, and cultivate a new culture of
purposeful agility.
3
Context and approach Some industries, travel for example, were growing strongly
in 2017—2019. Subsequent to the pandemic, however, the
The COVID-19 pandemic has caused unprecedented industry has experienced a severe decline. By contrast,
economic challenges with the G7 countries recording a insurance saw moderate growth in the years prior to
fall of 10.8 percent in GDP in the second quarter of 2020.2 COVID-19 but has shown strong resiliency since the onset
The sudden volatility in sales and disruption to supply of the pandemic (see Figure 2).
chains have forced businesses and governments across
Similarly, the impact of the disruption on key activities
the world to adapt and innovate (see Figure 1).
has varied significantly by industry. In retail, for example,
However, not all organizations start on the same footing, 53 percent of companies have seen their supply chains
or from the same circumstances. And clearly, not all disrupted, while the same holds true for seven percent of
industries are alike. Organizations in some industries tend utility companies.3 Such differences in immediate and
to be more digitally advanced than others. And the COVID- expected impact by industry have also manifested
19 pandemic has affected different industries in very themselves in stock markets, where the information
different ways. technology industry on the S&P 500 has increased by
more than 25 percent year-to-date while the energy
industry has declined 50 percent.4

Figure 1
COVID-19 causes unprecedented sales volatility

Jan 20 Mar 13 Mar 27 Apr 15 Jul 12 Oct 4

First US National CARE Act Stimulus Stimulus -3.2% Total
COVID-19 emergency enacted payments -6.4% spending
case declared start

10%

0%

-10%

-20%

-30%

Jan 15 Feb 1 Feb 15 Mar 1 Mar 15 Apr 1 Apr 15 May 1 May 15 Jun 1 Jun 15 Jul 1 Jul 15 Aug 1 Aug 15 Sep 1 Sep 15 Oct 1 Oct 15

Source: https://www.tracktherecovery.org

4
 The mix of critical technologies
before and during COVID-19
has changed dramatically, with
cloud and AI showing the
largest gains.

Figure 2
Industries have been impacted differently by COVID-19 and
were on different growth trajectories prior to disruption

Revenue delta 1H2019 versus 1H2020

High Moderate Limited

Covid-19 impact COVID-19 impact COVID-19 impact
30% High
Petroleum
growth
IT/
Transportation Professional
services
Energy, environment and utilities
Travel Life Sciences
Revenue growth 2017-2019

20%
Healthcare Banking Average
Industrial products growth
Consumer products Telecom Insurance
Electronics
Automotive Retail
10%
Chemicals Moderate
growth
Media and entertainment Aerospace and defense

0%

-40% -30% -20% -10% 0% 10%

Source: IBM Institute for Business Value.

In this report, we break down the objective facts and – Next, diving into what we see as six key capabilities
circumstances for industries and organizations. We look at needed to successfully navigate the pandemic, we look
different industries and capabilities, and at how technology at the role and impact of specific technologies, up to and
decisions affect each of them. Specifically: including the recent past. Capabilities range from
business continuity to workforce safety and security.
– For each major industry—and overall across industries— This allows us to assess the importance of specific
we ascertain the strategic role of specific major technologies to each capability that help guide
technologies in enabling success and resilience. organizations’ strategic investments and priorities.
Measured against financial performance, we examine
– Finally, drawing from conclusions of our analysis, we
their relative impact on business outcomes, including
present what business leaders can learn from the
whether specific technologies have a bigger impact in
behavior of organizations that have outperformed their
some industries than in others. Finally, we establish
peers during this time.
whether conclusions from each of these analytic
approaches remain consistent before and during the
COVID-19 pandemic, or if current circumstances have
revealed a change in technological relevance and
importance.
5
 High-technology adopters
outperformed their peers on
revenue during COVID-19
disruption in 12 out of 18
industries analyzed.

Chapter 2 In aggregate, Figure 3 portrays the changing dynamics of

critical technologies before and after COVID-19. Later,

Summary of findings we will show findings by specific industries.

Cloud is an essential technology across industries.

In this section, we provide a rapid overview of the answers
The technology has seen the greatest shift in terms of
to the questions that framed our research.
performance impact during this time of crisis across
industries. Cloud is now notably supporting performance
Are some industries more sensitive to technology
in industries such as banking and financial markets,
adoption than others? aerospace and defense, consumer products, healthcare,
Some of our finding were predictable, while others were life sciences, media and entertainment, and petroleum.
startling. For example, it may have been predictable that
some industries are, indeed, more financially sensitive to Cloud has become a more important performance
technology than others. differentiator in 11 out of 18 industries analyzed since
the pandemic. AI has also seen its role enhanced in several
And yet, the scope of the sensitivity surprised us. Across industries.
the 12 industries where technology acted as a performance
differentiator, technology adoption leaders outperformed Meanwhile, technologies such as IoT and robotic process
the revenue growth of their peers by more than 6 automation are associated with higher performance in
percentage points, on average, during the disruption. industries such as consumer products and electronics.
Similarly, advanced analytics acts as an important
In industries such as retail, insurance, energy, environment, contributor to performance in some industries. And mobile
and utilities, the most advanced organizations in technology has increased its performance impact in nine industries.
adoption outperformed their peers on revenue growth by
more than 10 percentage points.

Do some key technologies provide greater impact

Figure 3
on performance? How does this vary by industry?
We found that each industry has a unique mix of Technologies critical to performance have
technologies that helps successful organizations. changed dramatically
A “technology fingerprint,” so to speak. Our research shows
that mobile, artificial intelligence (AI), and cloud are the Ranking of technologies according to revenue impact
technologies that provide the greatest performance impact
across industries. Although AI has a relatively low level of 1 Mobile 1
adoption across industries, it presents a great opportunity
as it delivers a high-performance impact in industries such
as life sciences, and banking and financial markets. 2 Artificial intelligence 2

Technologies aiding automation—such as robotic process

automation (RPA) and robots—have also been providing 3 Cloud 3
high performance impact in select industries, mainly in
electronics, industrial products and telecommunications.
4 Advanced analytics 4
How has the optimal mix of technologies in each
industry changed during this time of crisis?
Our analysis of the latest financial results indicates that 5 Robotic Process Automation 5
the technology “recipe for success” by industry is changing.
In particular, cloud and AI are increasingly becoming
performance differentiators. 6 Internet of Things 6

6 Pre-COVID-19 During COVID-19

Source: IBM Institute for Business Value.

 During COVID-19, AI is driving
performance differentiation in
9 of 18 industries we studied.

Does the impact of this technology mix vary by key TSB: Smart Agent for smart
business capabilities? What are the potential
combinations that optimize performance returns? banking
Drilling down further, we found the most pronounced
TSB, a bank based in the UK, experienced a spike in
impact of different technologies for business performance
customer volumes during the COVID-19 crisis for
in the supply chain and operations capability. Cloud, data
items such as requests for details on how to apply for
management, intelligent automation and IoT are the
a repayment holiday on mortgages, personal loans
leading differentiating technologies. Forty-two percent of
and business loans. The company deployed a “Smart
executives report that intelligent automation reduced
Agent” function to its site in only 5 days, enabling
operating costs and 60 percent more outperformers than
customers to ask a chatbot or live agent about
others use a hybrid cloud management platform to simplify
measures the bank is taking during the pandemic.
core business processes. AI is also emerging as an
In addition, the company enabled more than 250
important performance differentiating technology for this
employees, most of whom were working from home.
domain, enabling more responsive and agile supply chains.
In just over a week, more than 11,000 requests had
While many organizations have prioritized greater use of
already been made through Smart Agent, and the
data as a key area for building competitive advantage, our
feature freed up its branch and call center employees
analysis suggests that hybrid cloud is increasingly
to focus on dealing with the most vulnerable
important across business capabilities and acts as a
customers and those who needed essential services.
greater performance differentiator than data alone.5 For
Since its launch, Smart Agent has been enhanced
example, to create greater levels of agility and efficiency,
further to include the ability to authenticate the iden-
outperformers leverage hybrid cloud almost twice as
tity of customers and the service will also be included
much as others.
within the TSB mobile app.
Technologies are playing an increasingly performance-
differentiating role in the way the workforce is being
effectively employed, engaged, and developed. While cloud
and data are important, AI is particularly differentiating for
workforce, with outperformers using AI for communication
with employees twice as often and almost 90 percent more
frequently use AI for employee development and training.

For customer engagement, outperformers are using

intelligent automation to deepen customer relationships
141 percent more often and AI to converse and engage
with customers 70 percent more often than their peers.
Here, too, cloud and data remain key technologies.

Technologies are also deployed within the IT function to

support resiliency and cybersecurity. In addition to cloud,
automation of key IT processes acts as a significant
performance differentiator, with outperformers using
intelligent automation to manage risks at more than double
the rate of others. AI is emerging as an important
technology in these domains, with 6 in 10 organizations
adopting AI in their information security functions.

These and other findings can help guide and prioritize

technology investments for your own business.

7
While differences in the role of
key technologies existed prior to
the pandemic, the subsequent
business disruption and, in
some cases, chaos, made the
differences much more evident.

Chapter 3 Taming turmoil with technology

In fact, while adoption of exponential technologies such as

Digital technologies for cloud and AI was only associated with superior financial
performance in a few select industries prior to the
growth and resilience disruption, recent events have made technology adoption
a far more important contributor to business performance
Across industries, organizations have leveraged across most industries. This suggests that the role of
technologies to drive competitive advantage. However, technology in shaping successful performance and
the mix of technologies and the manner in which they have operations emerging from the COVID-19 disruption will be
been deployed varies greatly from industry to industry, very different from the pre-pandemic era.
suggesting different levers of success per industry.
While differences in the role of key technologies existed Indeed, to the extent that the recent turmoil is symptomatic
prior to the pandemic, the subsequent business disruption of the global economy entering a new era of elevated risk—
and, in some cases, chaos, made the differences much with not only pandemics but also greater environmental,
more evident. political and social risks—there is likely to be a greater
premium on successfully leveraging the potential of digital
Our analysis reveals that in 12 of 18 surveyed industries, technologies for more resilient and agile organizations in
businesses with the correct mix of digital capabilities in the future.
place fared better and have shown greater resilience in
their performance. In some cases, they have even thrived. Moreover, while technology adoption is positively
However, specific technologies supporting resilience are associated with financial performance in most industries
not uniform across industries. during the COVID-19 disruption, the magnitude of the
differentiation between high technology adopters and
First, we examined if organizations’ financial performance the rest is not uniform.
in terms of revenue growth was more sensitive to adoption
of specific digital technologies than others. To do this, we In retail, for example, differentiation was high. Businesses
created an adoption index for digital technologies and in the top 10 percent of technology adoption outperformed
compared the financial performance of organizations in the their peers by 16 percentage points on revenue growth
top 10 percent of technology adoption with others in the during the pandemic. For a typical USD 10 billion revenue
industry. We looked at the data for both a pre-COVID period company this is equivalent to a revenue premium for high
(pre-2020) and during the pandemic (the first half of 2020). technology adopters of USD 1.6 billion in a year.

We found that not only does technology adoption vary In insurance, and energy and utilities, the revenue
greatly across industries, but the relationship between outperformance during the pandemic was 10 and 12
technology adoption and financial performance showed percentage points respectively, while in the badly affected
significant variation between industries. More importantly, travel industry the high technology adopters outperformed
technology adoption has become a far more important their peers on revenue by 9 percentage points.
performance differentiator during the COVID-19 disruption
Overall, across the 12 industries where technology was a
than it was previously.
significant differentiator amid the COVID-19 disruption, the
average revenue premium for high technology adopters
was more than 6 percentage points. These findings show
that digital technologies have become an important source
of competitive advantage during the pandemic.

However, not all technologies are equal, and it is important

to understand the unique technology mix that leads to
optimal performance within individual industries.

8
Which mix matters most?
To ascertain the optimal technology mix, and how this mix
Chemicals: Using cloud and
has changed during the recent disruption, we looked at AI to drive additional working
specific technologies to determine if some provide greater
impact on revenue growth than others and how this impact
capital
has changed during the pandemic. We also examined how COVID-19 impacts on business dynamics caused
this varies by industry. a major, multinational chemicals company to set
aggressive goals for increasing working capital by the
For this assessment, we looked at the financial impact of
end of 2020. An important source of savings for the
seven key technologies within and across 18 industries.
company is spare parts inventory management, which
This analysis revealed some stark differences in the role of
relies on accurate data on the state of critical inven-
individual technologies in contributing to organizations’
tory and future needs.
financial performance and how the relative importance of
various technologies has changed significantly as a result This company deployed a cloud/AI platform that uses
of the recent disruption. statistical analysis, prescriptive analytics, optimi-
zation algorithms and process automation to help
Cloud has become a more important contributor to revenue
increase profit margins, increase service levels, and
performance during the pandemic in 11 of the industries
reduce unplanned downtime. With the new platform,
analyzed, most notably in life sciences, healthcare,
the company expects to decrease inventory levels
aerospace and defense, petroleum, and travel and
by 13.6 percent while improving inventory decisions
transportation. In these industries, companies that have
through data integration, analytics and process
invested more in their cloud capabilities prior to the
automation. It also expects to achieve its goal of an
disruption have fared significantly better in terms of
additional USD 50 million working capital by the end
revenue performance during the pandemic.
of 2020.
AI has seen its role as performance differentiating
technology enhanced in nine industries, for example in
banking and financial markets, chemicals, industrial
products and life sciences where companies that have
made significant investment in AI gained revenue
premiums during COVID-19 compared to non-adopters.

Given the relatively low adoption of AI in many industries

coupled with significant performance impact, this
technology offers opportunities for early-mover advantage.

Mobile makes a positive shift in performance contribution

in half the industries analyzed and has been associated
with improved revenue performance in industries such as
retail, insurance, and automotive.

IoT is a significant performance differentiator in select

industries such as electronics, energy and utilities, and
consumer products. It is also a technology that increasingly
is being adopted and becoming more essential in a number
of industries, notably those with significant manufacturing
activities such as aerospace and defense, automotive,
chemicals, and industrial products.

9
In Figure 4, a quadrant chart lays out performance impact Blockchain, RPA and IoT are Emerging, indicating that
on one axis and level of investment on the other. This these technologies have yet to mature to a level where they
analysis yields four segments describing roles of are significantly impacting business performance in the
technology before and during COVID-19. It also shows the industry.
changing dynamics of technology adoption in banking and
financial markets and how investment levels and This assessment can be quite different by industry. In
performance impact are correlated. industrial products, many of these technologies fall into
other quadrants, such as IoT and cloud as Essentials,
In banking and financial markets, for example, cloud and mobile devices as Differentiators and AI and 3D printing as
advanced analytics are Differentiators, helping Opportunities for early mover advantage.
organizations stand out in the marketplace, generate
improved revenues, and optimize operations. AI is an It is evident from the above that the disruption associated
Opportunity for early mover advantage with limited with the COVID-19 pandemic has caused a shift in the role
adoption across the industry, but high-performance of each digital technology across and within industries in
impact. Mobile devices are Essentials, suggesting they are shaping business performance. This is not merely a
very important but also increasingly adopted or deployed temporary diversion on the longer digital transformation
by a larger segment of the industry, thus helping drive journey. It constitutes a more fundamental change in the
performance but not acting as a differentiating technology capabilities and technologies required to succeed in the
in the marketplace. future, both during future disruptions and during the next
normal.

Figure 4
Banking and Financial Markets

Performance impact
of technology

Low High High High

Opportunities Differentiators
Artificial intelligence

Cloud

Advanced analytics

Internet of Things
Robotic Process Automation
Petroleum
Blockchain and DLT Mobile

Emerging Essentials
Travel

Low Low Investment in technology High Low

Source: IBM Institute for Business Value.

10
Figure 5 shows how each of the industries we studied map
to a table of key technologies on one axis and whether they
are Differentiators, Opportunities, Essentials, and Emerging
on the other.

Figure 5
Where different technologies fit

Differentiator Opportunity Essential Emerging

Aerospace and Defense Cloud AI, 3D printing, Robots Analytics, IoT Mobile
Automotive Mobile, AI, Cloud, IoT, Analytics Robots
Autonomous transport
Banking and Financial Cloud, Analytics AI Mobile IoT, RPA, Blockchain
Markets
Chemicals Mobile, AI, Analytics Cloud, IoT RPA, Robots
Consumer Products IoT Analytics, RPA Cloud AI, Robots, Mobile
Electronics IoT RPA, Mobile Cloud AI, Analytics, Robots
Energy, Environment and IoT, Cloud Mobile, Analytics, AI, RPA
Utilities Autonomous transport
Healthcare Cloud AI, RPA, Analytics IoT Mobile, Wearable
Industrial Products Mobile AI, 3D printing IoT, Cloud Analytics, Robots
Insurance Mobile RPA Cloud AI, Analytics, IoT, Blockchain
Life Sciences Cloud AI, IoT, Wearable Analytics, Mobile, 3D printing
Media and Entertainment Cloud, Analytics Virtual reality, RPA Mobile, IoT AI
IT and Professional Analytics Cloud, IoT, Mobile AI, RPA, Blockchain
Services
Petroleum Cloud, IoT AI, Mobile Analytics, RPA, Robots
Retail Cloud, IoT, Mobile Analytics, RPA AI, 3D printing
Telecommunications Analytics, Mobile 5G, RPA, AI Cloud, IoT Robots
Transportation Cloud, IoT RPA, AI Mobile, Analytics,
Autonomous transport
Travel Cloud, Mobile RPA, Virtual reality IoT AI, Analytics

11
Insight: Developing and Chapter 4
reading the technology- Building the capabilities for
capability heat maps success
The heat maps presented in this report are based
In the prior chapter, we determined that the technology mix
on analysis of data from multiple surveys covering
for success varies by industry, we are now going deeper and
different technologies, capabilities, and industries.
exploring in which specific areas these have the greatest
The data from the different surveys has allowed us
impact.
to map metrics for individual technologies against
different capabilities, and ascertain if they are asso- We established six key operational focus areas that are
ciated with improved business performance. We have consistently core for industries in navigating the risks and
done this across and within individual industries. opportunities associated with COVID-19.6 Developing these
For the “overall” heat map, the data has been used capabilities involves building operating models that appear
to estimate a score of 1-10 for the adoption, use and to drive success in uncertain environments.
prioritization given to a particular technology for the
The six capabilities are:
relevant capability. A score of 1 represents a low
adoption, use, and priority, while a score of 10 is a – Agility and efficiency
very high adoption, use, and priority. – Customer engagement
For the “performance” heat map, the data has been – Supply chain and operations
used to estimate a score of 1-10 of differences – IT resiliency and business continuity
between high performers (revenue and profitability) – Workforce
and others in the adoption, use, and priority given – Cybersecurity
to a particular technology for a relevant capability.
A score of 1 represents no difference while a score The way in which these technologies underpin the required
of 10 represents a very high difference, with high capabilities varies not only by industry, but also by
performers showing significantly greater adoption, capability.
use and priority given to a particular technology for a
relevant capability. For the first time, our ground-breaking analysis maps key
exponential technology priorities against each of the six
business capabilities (see Figure 6).

Figure 6 shows:

– Cloud is a foundational technology across all six

capabilities. High-performing organizations across
industries are making significant use of cloud to drive
performance improvements.
– AI, IoT and intelligent automation are beginning to gain
traction as catalysts for key capabilities (for example:
IoT for supply chain and operations).
– Meanwhile, edge and blockchain are emerging
technologies, only moderately explored by organizations
for select capabilities.
– Data management is a critical success factor for several
capabilities and less so for others.

12
Six key operational focus
areas are consistently core
for industries in navigating
the risks and opportunities
associated with COVID-19.

Figure 6
There is a wide variation in the priority given to and link to
performance for different technologies by capability

Overall Agility and Customer Supply chain IT resiliency Workforce Cybersecurity

efficiency experience and operations and business
continuity
Cloud 5 6 5 5 5 6
AI 3 4 3 3 2 4
Edge 2 2 3 1 NA 1
Blockchain 2 2 4 1 NA 3
Intelligent automation 3 4 4 2 3 3
IoT NA 4 5 NA NA NA
Data 8 6 10 NA 3 5

Performance Agility and Customer Supply chain IT resiliency Workforce Cybersecurity

efficiency experience and operations and business
continuity
Cloud 10 10 8 9 9 10
AI 2 4 4 4 6 5
Edge 2 2 2 3 NA 3
Blockchain 1 2 2 2 NA 1
Intelligent automation 5 7 6 6 5 6
IoT NA 3 6 NA NA NA
Data 9 6 10 NA 9 3

Source: IBM Institute for Business Value.

Now let’s look at each of the key six operational capabilities – Differentiating: Technologies that are performance
individually. For each, we summarize this in a simple table: differentiating and widely adopted within an industry.
1) the relative level of adoption of key technologies for each – Opportunity: Technologies that are performance
operational capability, and 2) the magnitude of the differentiating but not yet widely adopted within an
correlation between the use and adoption of these industry, offering opportunity for early-mover advantage.
technologies and financial performance.
– Essential: Technologies that already are widely adopted
From this analysis, we can then attribute each technology within an industry but no longer differentiating.
to one of the following categories: Differentiating, – Emerging: Technologies with potential, but have yet to
Opportunity, Essential, or Emerging, as well as highlight key become widely adopted or act as significant performance
associated business opportunities. differentiators within an industry

13
Agility and efficiency for a new normal Our analysis shows that outperformers use their cloud
The world has changed—permanently. Businesses and capabilities for more advanced agile development and
their customers want stable, predictable operations that delivery 93 percent more frequently that others, and 75
are always available and ready. Disruptions due to percent more often use advanced cloud and data usage to
unexpected events will not be easily tolerated. These respond to changing expectations.
requirements need to be met dynamically, intelligently,
and effectively.

Agility and efficiency

Technology Use and Performance Role Key opportunities

adoption differentiating
Cloud Medium High Differentiator Support agile development workflows, accelerate development
velocity, improve release velocity, operate with high availability
AI Medium-Low Low Emerging Explore opportunities to use for supporting faster and better
operations
Edge Low Low Emerging Explore for improved real-time visibility and accelerated and
localized decision making
Blockchain Low Low Emerging Automate workflows across multiple organizations while
improving data integrity
Intelligent Medium-Low Medium Opportunity Transform workflows and decision making for improved business
automation results
Data High High Essential Improve visibility, responsiveness and speed-to-market
management

US Open: Serving up a virtual fan

experience – Match Insights, which used AI to allow fans to become
instant “experts” about the players and the tournament
At the 2020 US Open in New York, fans could not attend in matchups. Match Insights searched for and understood
person due to COVID-19 protocols. But that didn’t stop the millions of articles, blogs, and thought leaders leading
United States Tennis Association from using cloud and AI into a match, to gather the most relevant information and
to provide millions of fans with enhanced virtual experi- translate it into narrative form, giving fans fact-based
ence. insights on the players.
The new solutions and the technology powering them – AI Sounds, which leveraged AI to recreate crowd sounds
include: based on hundreds of hours of video footage captured
during the 2019 tournament. The AI Sounds tools were
– Open Questions, which gave fans the ability to engage in used by the production teams in-stadium and at ESPN.
tennis debates among fans on USOpen.org. Open
Questions used AI to analyze millions of news and sports The new tools were underpinned by hybrid cloud to handle
sources for insights. That unstructured data was the variety of workloads. This hybrid cloud architecture
analyzed, summarized and ultimately delivered as pro gave the USTA’s digital operation the flexibility and hyper-
and con arguments. Fans were able to share their scale it needed to quickly embrace remote work while
opinions on the debates. maintaining productivity and ensuring the highest commer-
cial level of data security.

14
Driving deeper for better customer engagement Outperformers use cloud technologies 60 percent more
Organizations need to get more out of their data to than all others to deliver consistent customer service. They
empower their customers and employees and enhance are also delivering self-service user experiences on the
their experiences in response to increasing demands for cloud 76 percent more often.
personalization—all while making marked improvements in
efficiency and agility.

Customer engagement

Technology Use and Performance Role Key opportunities

adoption differentiating
Cloud Medium-High High Differentiator Improve customer and user experience and use shared data to
deliver integrated services and greater lifetime customer value
AI Medium Medium Opportunity Use AI for better customer engagement and satisfaction
Edge Low Low Emerging Explore for predictive sales at point-of-sale
Blockchain Low Low Emerging Provide transparency into the sourcing and production of goods
consumed
Intelligent Medium High Opportunity Leverage automation for customer insight and real-time response
automation
IoT Medium Medium-Low Emerging Explore for improved insight into customer behavior and use
Data Medium-High Medium-High Essential Use data to improve customer trust
management

Grocery store chain: AI-based Nationwide Building Society:

virtual agent provides food for Helping members with AI
thought Nationwide Building Society, in the UK, wanted to improve
its ability to answer questions about mortgage support for
A US-based grocery chain that operates more than 1,000 those impacted by coronavirus.
stores was inundated with questions about the impact
of COVID-19. Handling these questions efficiently and The company began using a virtual agent to support
effectively became a significant staffing challenge that led Nationwide’s teams by learning how to respond to some
to conversion rates lower than pre-pandemic levels. The of the most common mortgage queries. In addition to
company deployed an AI-based virtual agent across its providing swift responses to tens of thousands of inquiries
voice, digital, and mobile platforms. since late March, hundreds of hours have been freed up for
human agents to handle with more complex queries during
In less than two weeks, the grocer integrated the smart these difficult times.
assistant into the complete customer engagement expe-
rience, handling frequent COVID-19 questions. In the first Notably, Nationwide was able to build, test, and roll out the
10 days of operation, the virtual agent handled 53,000 service in just four days. In addition to dialogue to respond
interactions and answered 16,000 questions leading to an the system learned to comprehend intent and understand
80 percent reduction in the customer abandonment rate. how a similar question could be asked in several ways.
When it is not able to answer a query, it can pass the
member over to a fully trained mortgage advisor to help
during the same online chat experience. 15
Hyper-responsive supply Three in four outperforming organizations see IoT as
chains and operations important for their operations. That is 33 percent more than
The onset of the pandemic saw supply chains stressed, all others. And six in ten outperformers are using cloud to
strained, or in some cases, shattered. AI and automation simplify operations, 63 percent higher than their peers.
can help organizations sense and respond to evolving
Top performers are using AI for supply chain planning
demands while driving new levels of efficiency and
54 percent more frequently than their peers.
flexibility. This intelligence can also be applied to all
core enterprise workflows.

Supply chain and operations

Technology Use and Performance Role Key opportunities

adoption differentiating
Cloud Medium High Differentiator Modernize core business processes, share data across SaaS
applications, create and/or participate in industry ecosystems
and platforms
AI Medium-Low Medium Opportunity Improve supply chain planning, resource use and forecasting
Edge Medium-Low Low Emerging Explore for improved asset management and real-time optimiza-
tion of manufacturing processes
Blockchain Medium Low Emerging Digitize paper-based processes across supply chains to speed up,
while improving sourcing and production of goods
Intelligent Medium Medium-High Differentiator Drive reduction in operating costs, improved asset management,
automation production efficiencies and maintenance
IoT Medium Medium-High Differentiator Real-time insights and analysis of supply chain and operations
Data High High Differentiator Improve operational efficiency and visibility
management

Oil company: Delivering during Mondelez: Using AI for supply

the pandemic chain demand sensing
One of the largest commercial oil companies in India knew Mondelez, a multinational confectionery, food, beverage,
that panic buying during the pandemic would hurt its ability and snack food company found that customers were more
to deliver essential cooking gas to customers. The company interested than ever in tracking orders and delivery during
has implemented the integrated CRM and DMS platform the pandemic. To respond, the company needed to improve
and mobile app to mitigate disruptive effects, in addition to its capabilities in planning and forecasting demand,
providing trusted delivery information and quick booking merchandise, and its enormous supply chain.
for services. Automated emergency checks monitor Mondelez responded by creating a COVID-19 command
repeated refills, as well as demand forecasting to help state center that employs AI-based machine learning for
agencies balance the bookings. improved understanding of real-time consumer demand
The app supports marginalized communities, issuing patterns. The company also is using machine learning
direct relief payments from the government and alerting in advanced analytics for on-demand consumer intelli-
customers of retail locations offering free food. It also gence while eliminating substantial mundane tasks.7 The
helps reduce disruptions of deliveries to consumers, command center is expected to reduce out-of-stock by 20
sustaining the delivery of around 3.0 million cooking gas percent during the duration of the pandemic, driving more
refills per day. than a USD 20 million benefit in avoided lost sales and
additional benefits on supply chain efficiency.
16
Strengthening IT resiliency High performers are leveraging more sophisticated
and business continuity cloud adoption as a competitive differentiator, with high
During COVID-19, organizations have been put to the test, performers using cloud technologies to improve security
at a massive scale, whether due to the huge spike in volume and resiliency of critical business processes 71 percent
of transactions (such as financial transactions, digital more frequently than others. They are also using
commerce, or call center volume), or the stay-at-home intelligent automation for risk management 148 percent
orders requiring employees to get the same work done more than their peers. And they use AI to develop and
remotely. manage IT resilience and risk more than 30 percent
more often.

IT resiliency and business continuity

Technology Use and Performance Role Key opportunities

adoption differentiating
Cloud Medium High Differentiator Improve resiliency of core business systems, run applications on
multiple clouds to mitigate outages and threats to business con-
tinuity, enable automatic scaling in response to spikes in demand
AI Medium-Low Medium Opportunity Manage IT resiliency and risk and improve support services
Edge Low Low Emerging Explore for securing data at point of action

Blockchain Low Low Emerging Enable buyers to work with new suppliers rapidly
Intelligent Low Medium-High Opportunity Improve risk management and reliability
automation

Retail: Challenge meets JBM Group: Avoiding disasters

opportunity with disaster recovery
After the pandemic hit, one of the UK’s largest health JBM Group, a USD 2.2 billion global Indian conglomerate,
retailers saw a 50 percent increase in online orders as faced a huge challenge. It needed to create a single,
customers switched to home deliveries. Bottlenecks in streamlined access sourcing point for its supply chain with
warehouse operations threatened the retailer’s ability to no downtime for its B2B customers such as OEMs and alli-
deliver essential and healthcare products. ances, including more than 20 renowned global companies.

The company adjusted its e-commerce model prioritizing The company put its disaster recovery on a cloud service
essential medicines and other healthcare products and model. One of JBM’s objectives was to provide a sustained
support. It also implemented virtual queues to manage tool for business transactions. The entire cloud model,
traffic on the website and double the frequency of software which now stores six terabytes of data, was implemented
releases to deliver new critical capabilities which enhanced in five weeks.
its ability to manage the new workload.
The company says the new solution has helped it achieve
“always on” enterprise, driven by disaster recovery on
the cloud and IT optimization as-a-service delivery mode.
JBM’s improved technology compliance also has improves
stakeholders’ confidence.
17
Reimagining workforce capabilities two years ago. They can start by adjusting and optimizing
It has long been said that for many organizations their most the deployment of the workforce, and reimagining work and
important assets walk out the door everyday: their people. the work environment at every level.
When the pandemic started, many walked out and could
not return. Ready or not, work-from-home became the Outperformers use cloud to improve employee experiences
norm for millions of employees. Now, companies want to at nearly double the rate of others. They are using AI for
prepare them to return to work with confidence by employee communication, development, and training more
prioritizing the wellness of employees and the safety of than 85 percent more often. And they combine internal HR
workplaces. Ninety-two percent of executives state that data with data from outside the firewall to improve
workforce safety and security will be a high priority in the workforce management five times more frequently than
next two years, a more than two-fold increase compared to others.

Workforce

Technology Use and Performance Role Key opportunities

adoption differentiating
Cloud Medium High Differentiator Improve the user experience for developers and operators,
improve employee-facing services, simplify workflows, improve
collaboration and support for remote work
AI Low Medium-High Opportunity Identify and manage skills needs and improve employee
communication, development and engagement
Intelligent Medium-Low Medium Opportunity Improve workforce performance, free up staff for higher value
automation tasks and improve employee safety
Data Medium-Low High Opportunity Improve HR insights and get visibility into skills supply and
management demand

Minerals firm: Leveraging AI to Glintt: Is this bed available?

keep workers safe Hospitals in Portugal had tools that told them which patient
was in which bed, but were unable to predict when those
A mineral extraction company seeking to protect its work-
beds would become available for future patients.
force during the COVID-19 outbreak Is piloting an interactive
AI-powered chatbot. The chatbot is pre-trained using data Glintt, an IT solutions integrator with deep healthcare exper-
from the Centers for Disease Control and Prevention to keep tise, based in Portugal, developed “WiseWard,” a solution
employees informed about the virus and its symptoms. that predicts when hospital patients will be discharged,
five to seven days in advance, thereby helping optimize bed
The AI solution identifies the symptoms associated with
assignment decisions.
COVID-19, and provides recommendations aimed at
ruling out or confirming the possible presence of the virus. WiseWard automatically predicts hospital discharges five
Employees have access 24 hours a day, through voice or to seven days ahead. The difficulty of this task involves
text, to self-monitor for COVID-19 symptoms. numerous variables, include surgery schedules, age and
condition of the patient, staff schedules, and more.

Glintt has seen a 30 to 50 percent increase in bed manager

productivity. Better scheduling also allows better use of
18 resources and higher revenues. And the improved workflow
creates an improved patient experience.8
Enterprise-wide cybersecurity need to build their security strategy, protect their digital
The new normal has created new ways of working. It also users, assets and data, and defend against threats—all with
has created new opportunities for cyber criminals. For a modern, multicloud approach. The need to build security
example, it’s been reported that hospitals struggling to into the fabric of the enterprise isn’t just idle talk.
cope with caring for COVID-19 patients have been targeted
by cyber criminals seeking to exploit the strain on hospitals’ High performers use AI 71 percent more frequently than
resources.9 Since the World Health Organization declared a others to gather and correlate business threat intelligence.
pandemic on March 11, there has been a 6,000 percent Cloud is 71 percent more often used by these high
increase in spam, phishing, and other cybersecurity issues performers to improve security and resiliency of critical
related to COVID-19.10 While many individuals are out of business processes. Also, they use AI 37 percent more
work, cyberattackers are busier than ever. Organizations than their peers to respond to security incidents.

Cybersecurity

Technology Use and Performance Role Key opportunities

adoption differentiating
Cloud Medium-High High Differentiator Improve security of applications and data, enable compliance
with data privacy regulations, enable compliance with enterprise
security policies
AI Medium Medium Opportunity Monitor and detect security threats and respond to incidents
Edge Low Medium-Low Emerging Explore securing data at point of action

Blockchain Medium-Low Low Emerging Explore for better security against fraud and digital identity
management
Intelligent Medium-Low Medium-High Opportunity Improve information security
automation
Data Medium Medium-Low Essential Improved visibility and reduced risk
management

Education department: Using Major hospital: Operating with

cloud for remote access remote security support
During the pandemic, a large US municipal education A major hospital in Spain received a ransomware attack
department is using cloud to quickly and securely scale during COVID-19. Fortunately, the hospital had engaged with
up a remote learning environment. As a result, two million a leading security supplier that provided remote security
students, staff, and parents have been granted remote support. Working together virtually, they thwarted the attack,
access to their devices in order to continue their day-to-day freeing their systems without paying ransom.
life as the department adjusts to COVID-19.

19
There is a need to blend
technologies with the right
capabilities, and the right
mix of technologies varies
by industry.

It is not one-size fits all; each In banking and financial markets, there is growing use of
intelligent automation to support various capabilities and
industry has its own optimal processes, and it is particularly differentiating among high
performers for customer engagement. For example, high
fingerprint performers in banking and financial markets leverage
automated processes and self-learning software to
Finally, when zooming in on individual industries and the
deepen customer relationships over four times more than
role that different technologies play, the particular
their industry peers.
challenges and opportunities of a given industry give rise to
different technology priorities. For example, when In automotive, intelligent automation is more
conducting a similar “heat map” analysis for two differentiating for supply chain and operations. For this
industries—automotive and banking and financial capability, automotive organizations are also using IoT for
markets—marked differences are found. improved performance, with 71 percent of organizations
identifying IoT as being important for their operations.
While cloud technologies are important for both industries,
it is more of a competitive differentiator in banking and These findings indicate that there is a need to blend
financial markets. In contrast, AI for customer engagement technologies with the right capabilities, and that the right
is a particularly differentiating use of technology within the mix of technologies varies by industry. Achieving the right
automotive industry. High performers in the automotive mix for your particular industry will act as a catalyst for
industry are 257 percent more likely to be using AI to short-term success, as well as provide the foundation for
evaluate customer satisfaction and 32 percent more likely transforming your organization for the future.
to have adopted AI in their customer service function.

20
Chapter 5 In this new Cognitive Enterprise, intelligent workflows
afford a new “center of gravity” that motivates seamless

Action guide processes across organization and ecosystems. High-value

experiences are delivered virtually to not only customers,
Recent events have shown that many of the operating but employees and partners, necessitating deep re-wiring,
assumptions underpinning organizations’ business new organization, and new ways of working. Intelligent
strategies have become redundant—sometimes even automation enabled by AI and cloud—we saw repeatedly in
harmful, and, on occasion, fatal. our analysis—revolutionizes how work gets done free of
physical and location constraints, reducing the mundane
But despite the human tragedy of COVID-19, executives are and expanding customer, employee, and partner
telling us the crisis is also making transformational change empowerment across the ecosystem.
easier—and faster. The pandemic has given visionary
business leaders an opportunity to fundamentally rethink Intelligent sensors and real-time insights augment human
their business. When nothing is normal, the challenging can capabilities to deliver better, faster responses. Real-time
become the everyday. adaptability and agility become commonplace, expanding
differentiation and competitiveness.
But change requires business leaders to step outside their
traditional paradigms. It requires a reassessment of an But realizing the vision requires immediate action.
organization’s purpose, culture, markets, core business,
We have identified nine action areas that are crucial to
and operating model. It requires new ways of working, new
making progress and creating the preconditions for
processes, and new organization. And most importantly, a
success:
new vision to thrive in the post-pandemic world.
Market-making business platforms:
Our analysis demonstrates that over the recent past,
– Double down on “big bets”: Selecting core market-
leading organizations have not only responded faster to the
making platforms are existential, not experimental,
challenges impacting them, they have also been more
decisions. New platforms and their value should be
effective in developing core differentiating capabilities
reflected in a company’s external narrative.
and—as we have seen—accelerating their transformation
agenda.11 – Create a new business blueprint: Include the target
operating model, decision framework, culture and skills,
And as we indicated earlier, these conclusions are being roles and responsibilities, as well as how people and AI
further validated by our ongoing surveying of 3,000 CEOs work together in a business platform context. The
around the world. blueprint helps identify and execute strategic priorities,
anticipate how changes ripple across the organization,
Leaders have reconsidered the importance of digital
and where to relocate resources.
technologies to shape business and operating models for
the future. Over the past year or so, the rise of the – Orchestrate compelling change: Historic techniques
exponential technologies we cover in this report has teed are not fit-for-purpose in the environment of the
up a new era of business architecture change. We call this Cognitive Enterprise. A control tower, which monitors
revolutionary change “The Cognitive Enterprise.”12 environmental conditions in real time, provides alerts
and tracks the moving parts of change initiatives, as well
During the pandemic, uncertainty has reigned, and our as the underlying business performance and outcomes.
ability to be where we want or need to be is not assured.
Leaders have started to rethink and redesign their Cognitive
Enterprise transformations for a changed world that is now
predominantly virtual.

21
Intelligent workflows: As your organization attempts to make this shift, you
– Embed exponential technologies: AI, IoT, automation, should consider three important guidelines:
blockchain, and 5G can be leveraged at scale and in
combination to truly change the nature of workflows. – Organizations must work to secure both the human and
A critical requirement is to work out how and where these machine elements along intelligent workflows, data
technologies can have the most impact and drive the sources, their attendant applications, and the underlying
biggest returns infrastructure.
– Drive value from data: Data readiness is a pre-condition – Security of business platforms will be critical to trust and
for value—and readiness includes attributes such as their longevity, but companies need to balance this with
accuracy, cleanliness, standards, openness, and frictionless customer and employee experiences.
permission. It is estimated that 80 percent of the effort
– The ecosystem of business platforms requires an open
in deploying AI is getting data ready for use.13
network approach to security across all parties, driving
– Deploy through hybrid multicloud: Hybrid cloud collaboration and insights at speed.
architectures can release the value of trapped data and
functionality, along with handling the transition between The post-COVID-19 business environment will look vastly
old and new applications. Hybrid cloud also can de-risk different than the beginning of 2020. The need and the
architectural choices through “build once, deploy opportunity for digital transformation will never be clearer.
anywhere” approaches. This report can help you understand how and where to
apply digital transformation against key capabilities in your
Enterprise experience and humanity: industry. The race to determine the next generation of
– Elevate human-technology partnerships: Automation will outperformers has started. Is your organization ready to
handle repetitive tasks while platforms and workflows take the lead?
will surface new spaces for insight, creating new areas
for humans to add value. As humans adopt better tools,
they will “up their game” and as the technology becomes
more intuitive, their adoption of it will increase.
– Cultivate smart leadership, skills, and culture: As
business platforms straddle industry boundaries,
leaders will need to look outside traditional industry
networks to seek insights. The ability to communicate
unambiguously about the organization’s intent is more
critical than ever
– Perform with purposeful agility: Agile ways of working
can have huge value, but they need to be made more
purposeful for greater effectiveness and efficiency. In
addition, purposeful agility helps define the business
architecture and other architectural choices.14

22
Research methodology The findings from the regression analysis as well as the
technology investment data were combined to create a
Our approach to this study has drawn on data from multiple categorization of technologies by industry along two
different surveys covering different aspects of technology principal dimensions: Investment in a given technology
use and its relationship to business priorities and along the x-axis and the relationship between investment
performance. in that technology and revenue performance (as measured
by the coefficient in the regression run) on the y-axis.
Technology adoption and business performance This allowed us to categorize technologies per industry
by industry as follows: Differentiating technologies that are being
We have created a technology adoption index for each invested in and are creating significant performance
industry to understand its relationship to business impact; Essential technologies that are being widely
performance. For each industry, we identified the five invested in but are not associated with significant
most important technologies based on the share of differentiation in business performance; Opportunities that
companies in the industry having made some investment are not yet widely invested in but linked to significantly
in the technology. The technology adoption index is better business performance; Emerging technologies that
calculated as the average level of investment (scale 1-5) are not yet widely invested in nor associated with
in this selection of technologies. significant business performance impact.

Based on the calculated technology indices, we then Technologies for different capabilities
identified the top ten percent technology adopters within To understand the role of different technologies in shaping
each industry. Linking the technology adoption index to the relevant operational capabilities for the future, we
financial performance (average revenue growth rate in looked in more detail at technology adoption and priorities
2017-2019) for the top ten percent of adopters and the rest for specific functions and operating objectives. To this end,
we identified the difference in financial performance. we drew on data from multiple surveys covering different
The same was done against performance during the technologies and their use across functions. The relevant
COVID-19 disruption by looking at revenue resilience data for each technology was mapped against six core
estimated as the percentage change in revenue between capabilities, creating a heat map that shows the role of
1H2020 and 1H2019. This was done for each industry.15 different technologies by capability.

Technology categorization and prioritization Two heat maps were created: one showing the overall
by industry adoption, prioritization, and use of technologies by
To get a more nuanced view of how individual technologies capability, and one looking at the difference in adoption,
contribute to business performance, we conducted prioritization, and use of technologies by capability
multivariate regression analysis. between high performers (on revenue and profitability) and
others. Looking at technology adoption, prioritization and
For the first analysis, we had average annual revenue use through these two lenses provides insight into how
growth in the period 2017-2019 as dependent variable in technologies are being used on the one hand and whether
order to ascertain the relationship between technology they are associated with differentiating business
investment and revenue performance prior to COVID-19. performance on the other.

To test the relationship between technology investment Where data allowed, we also conducted this analysis for a
and business performance during the COVID-19 disruption, selection of individual industries, to ascertain how the use
we ran regression runs with the delta in revenue between and differentiating impact of technologies by capability
first half of 2020 and first half of 2019 as a percentage of varies by industry.
revenue in the first half of 2019 as dependent variable.

23
About the authors
Jean-Stéphane Payraudeau Anthony Marshall
[email protected] https://www.linkedin.com/in/
anthonyejmarshall/
@aejmarshall
[email protected]

Jean-Stéphane Payraudeau is Managing Partner, Anthony Marshall is Senior Research Director at the IBM
responsible for IBM’s thought leadership research and Institute for Business Value (IBV), leading the company’s
publications, centers of competence for Industries, as well top-rated thought leadership and analysis program. He
as Global Business Services offerings and assets. In leads a global team of 50 technology and industry experts,
tandem with fellow IBM Services and Industry leaders, statisticians, economists and analysts.
Jean-Stéphane’s team drives, coordinates, and builds the
key elements that accelerate clients’ journeys towards Anthony also is personally active in conducting original
becoming Cognitive Enterprises enabled by hybrid cloud. thought leadership in areas including innovation, digital
transformation, artificial intelligence and cloud strategy.
Jean-Stéphane is a member of the GBS Business
Consulting global leadership team. He has extensive
business management experience as well as expertise in
complex enterprise transformation in the domains of
finance, HR, and procurement.

Jacob Dencik, Ph.D.

https://www.linkedin.com/in/
jacob-dencik-126861/
[email protected]

Jacob Dencik is Economic Research Leader responsible

for leading IBV research on topics related to technology
and implications for the global economy. He has extensive
experience advising companies around the world on their
global operations and location strategies.

Jacob also has advised governments around the world as

an expert and economist on competitiveness, FDI, sector/
cluster analysis, and innovation. He holds a Ph.D. in public
policy and economics from Bath University in the United
Kingdom.

The authors would like to recognize the invaluable

contributions of Rachna Handa in the preparation
24 of this report.
The right partner for Related reports
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https://www.ibm.com/thought-leadership/institute-
At IBM, we collaborate with our clients, bringing together business-value/report/covid-19-future-business
business insight, advanced research, and technology to
give them a distinct advantage in today’s rapidly changing COVID-19 Action Guide: Beyond the Great Lockdown
environment. https://www.ibm.com/thought-leadership/institute-
business-value/covid-19-action-guide
IBM Institute for Building the Cognitive Enterprise
Business Value https://www.ibm.com/thought-leadership/institute-
business-value/report/build-cognitive-enterprise
The IBM Institute for Business Value, part of IBM Services,
develops fact-based, strategic insights for senior business
executives on critical public and private sector issues.

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To learn more about this study or the IBM Institute for
Business Value, please contact us at [email protected].
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25
Notes and sources 8 Forneas, Nuno. “Improving hospital bed
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Institute for Business Value. September 2020. https://
9 Winder, Davey. “Cyber Attacks Against Hospitals Have
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‘Significantly Increased’ As Hackers Seek To Maximize
value/report/covid-19-future-business
Profits.” Forbes. April 8, 2020. https://www.forbes.
2 “Unprecedented fall in OECD GDP by 9.8% in Q2 2020.” com/sites/daveywinder/2020/04/08/
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Development. August 26, 2020. https://www.oecd.org/ confirmed-interpol-issues-purple-
sdd/na/GDP-Growth-Q220.pdf alert/#4dffc3d858bc

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September 20, 2020. https://eresearch.fidelity.com/ covid-19-spam/
eresearch/markets_sectors/sectors/si_performance.
jhtml?tab=siperformance 11 “COVID-19 and the future of business: Executive
epiphanies reveal post-pandemic opportunities.”
5 “Build your trust advantage.” IBM Institute for Business IBM Institute for Business Value. September 2020.
Value. 2019. https://www.ibm.com/downloads/cas/ https://www.ibm.com/thought-leadership/institute-
K1OGEMA9 business-value/report/covid-19-future-business

6 “Emerge Smarter.” IBM. 2020. https://www.ibm.com/ 12 “Building the Cognitive Enterprise: A blueprint for
impact/covid-19/business-solutions; “Beyond the AI-powered transformation.” IBM Institute for Business
Great Lockdown: Emerging stronger to a different Value. May 2020. https://www.ibm.com/thought-
normal.” IBM Institute for Business Value. April 2020. leadership/institute-business-value/report/
https://www.ibm.com/thought-leadership/institute- build-cognitive-enterprise
business-value/covid-19-action-guide
13 Bowne-Anderson, Hugo. “What Data Scientists Really
7 “Mondelez’s Front-Line View Shows Value of Demand Do, According to 35 Data Scientists.” Harvard Business
Sensing during COVID-19.” Consumer Goods Review. August 15, 2018. https://hbr.org/2018/08/
Technology. August 5, 2020. https://consumergoods. what-data-scientists-reallydo-according-to-35-data-
com/mondelezs-front-line-view-shows- scientists
value-demand-sensing-during-covid-19?from=gate
14 “Building the Cognitive Enterprise: A blueprint for
AI-powered transformation.” IBM Institute for Business
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leadership/institute-business-value/report/
build-cognitive-enterprise

15 Note: for some industries, the n-count for high-

technology adopters is less than 10.

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Trending Insights © Copyright IBM Corporation 2020

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