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Growth-Driving Enterprise Innovation Model | Accenture

Accenture research shows that leaders don't know how to invest in technology the right way, leading to gaps in innovation and growth. Read more.

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Growth-Driving Enterprise Innovation Model | Accenture

  1. 1. A CEO’s guide to getting the most out of new technologies YOURLEGACY ORYOURLEGEND? 
  2. 2. Copyright © 2020 Accenture. All rights reserved. The technology investment decisions companies make will determine—more than ever—their financial success. Most companies are failing to maximize the full value of their investments. The gulf in financial performance between competitors is growing. With significant revenue growth at stake, CEOs must take a leadership position to close the Innovation Achievement Gap*. *Innovation Achievement Gap: the difference between potential and realized value from technology investments. AllCEOsare techCEOs
  3. 3. Copyright © 2020 Accenture. All rights reserved. WeguideCEOsonthetechnologystrategies thatwillimprovereturnoninvestment We classified companies into ‘Leaders’, who are building Future Systems and the ‘Middlers’ and ‘Laggards,’ who are investing in— but not scaling—innovation. Accenture has conducted the largest enterprise systems survey to date: 8356Companies 885CEOs 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Leaders ofthecompanies Top10% Middlers ofthecompanies Mid20% Laggards ofthecompanies Bottom25%
  4. 4. Copyright © 2020 Accenture. All rights reserved. 78% of CEOs surveyed believe they are effective at creating a safe space for experimenting with new technologies. 80% of CEOs say they have the right systems in place to innovate at scale… …but only 8% of those CEOs can be classed as Leaders. The rest are struggling to close an ever- widening Innovation Achievement Gap. TheInnovation AchievementGap startswithagulfbetween ambitionandreality…
  5. 5. Copyright © 2020 Accenture. All rights reserved. …andcontinues withafragmented techstrategy Most organizations put business unit, product or geography heads in charge of tech investments. The isolated pockets of customized systems rarely work with each other. When technology is increasingly dependent on platforms, ecosystems and large varieties of data, this prevents the scaling of innovations across the enterprise.
  6. 6. Copyright © 2020 Accenture. All rights reserved. Leadingbyalongshot Leader CEOs: The Strongest Advocates of Future Systems It’s important to minimize process differentiation 100% 90% 80% 70% 60% 50% 40% 5% 17% Future Systems will blur the lines within the technology stack It’s important to decouple tightly integrated systems to make them more flexible Future Systems will provide strategic agility CEOs of Leader companies N=67 CEOs of Middler companies N=261 CEOs of Laggard companies N=187 3% 34% 24% 14% 14% 6%
  7. 7. Copyright © 2020 Accenture. All rights reserved. Companies who are evolving to Future Systems are growing at twice the rate of companies who are struggling to scale innovation. But Middlers also trail Leaders significantly. Self-reported annual growth rates 2015-2018. FutureSystemsstrategiesfuel revenuegrowth Leaders 9% Middlers 6% Laggards 4%
  8. 8. Copyright © 2020 Accenture. All rights reserved. It’scoldcomfortforMiddlers Leaders’ expected growth is represented by the purple line, Middlers the dark blue line and Laggards the pale blue line (self-reported). This illustrative model shows the opportunity cost of not evolving to Future Systems using a company with $10 billion in revenue in 2015. ​ Leaders grow 2x faster than Laggards. But also outpace Middlers by 50%. $22bn $20bn $18bn $16bn $14bn $12bn $10bn 2015 2016 2017 2018 2019 2020 2021 2022 2023 For Laggards, $3 billion was forgone in 2018. But even Middlers left nearly $2 billion on the table. $20 billion will be lost in 2023 by Laggards. And for Middlers, $13 billion will be at stake. Leaders Middlers Laggards Gap=46% Gap=23% Revenue(billions)
  9. 9. Copyright © 2020 Accenture. All rights reserved. CEOsandCIOsseeeyetoeye... ...but more work must be done to address the Innovation Achievement Gap. It’s important to minimize process differentiation 90% 85% 80% 75% 70% 65% 60% Future Systems will blur the lines within the technology stack Future Systems will provide strategic agility It’s important to decouple tightly integrated systems to make them more flexible All CEOs N=885 All IT N=3995
  10. 10. Copyright © 2020 Accenture. All rights reserved. HowtotaketherightPATHS Leader CEOs consistently take five key steps to close their innovation achievement gap and rise above the rest. P A T H S Progress: Apply new technologies to evolve across multiple business processes to improve efficiencies and performance Adaptation: Adapt IT investments to suit changing business needs Timing of Tech Adoption: Properly sequence and roadmap adoption of new technologies Human + Machine Workforce: Activate and enable the workforce to use and be augmented by technology Strategy: Actively align business strategy and IT strategy to better seize opportunities
  11. 11. Copyright © 2020 Accenture. All rights reserved. Route 1 Transform low-hanging business processes, e.g. customer-facing processes. Optimal option Route 2 Build innovation centers / hubs to transform multiple processes. Route 3 Reimagine business processes for the future, and target multiple processes with the same technologies. The tempting options Progress TheCEO’spaths How extensively/broadly should we apply new technologies to evolve business processes across the enterprise? Leaders transform more than 2 processes for every one that Middlers transform, and 3 times as many as Laggards.
  12. 12. Copyright © 2020 Accenture. All rights reserved. Route 1 Patch legacy systems. Optimal option Route 2 Lift-and-shift to the cloud. Route 3 Decouple from legacy and transform with the cloud, catalyzing innovation across silos. The tempting options Adaptation TheCEO’spaths 83% of Leaders say it is important to decouple data from legacy infrastructure, vs. 61% of Middlers, and just 37% of Laggards. How do we adapt our current IT investments to changing business needs?
  13. 13. Copyright © 2020 Accenture. All rights reserved. Route 1 Experiment with new tech on the leading-edge. Optimal option Route 2 Double down on industry-specific, customized tech. Route 3 Identify fundamental technologies and prioritize their adoption in terms of timing and processes targeted. The tempting options Timing TheCEO’spaths 20% of leaders adopt Software-as-a- service, vs. 9% of Middlers and 8% of Laggards. How do we properly sequence and map out adoption of new technologies?
  14. 14. Copyright © 2020 Accenture. All rights reserved. Route 1 Rely on traditional, periodic training about new tech (classroom, online, standardized). Optimal option Route 2 Individualize training, allowing employees to learn at their own pace. Route 3 Deliver tech-augmented training for working with technologies of the future (AI, XR and experiential, personalized). The tempting options Human+Machine TheCEO’spaths 86% of Leaders use intelligent technologies such as AI, Analytics, and Machine Learning to predict and match worker training with required job skills, vs. 60% of Middlers and 35% of Laggards. How do we activate and enable the workforce to use and be augmented by technology?
  15. 15. Copyright © 2020 Accenture. All rights reserved. Route 1 Allow business units to rapidly, and independently, address their pain points. Optimal option Route 2 Devise a tech strategy to explore ambitious business goals like new business models or adjacent markets. Route 3 Build boundaryless, adaptable and radically human IT systems that explicitly enable scale and strategic agility. The tempting options Strategy TheCEO’spaths 94% of Leaders regularly track value of new technologies vs. 76% of Middlers, and 47% of Laggards. How can we intentionally manage the intersection of business strategy and technology strategy to better seize opportunities?
  16. 16. Copyright © 2020 Accenture. All rights reserved. Threeessentialsteps alongthePATHS It´s time to match intention with action with the PATHS framework. Leaders enjoy a considerable head start, and they will not be standing still. Their systems are designed to embrace tech innovations so that they can create and scale them across the enterprise.   Yours should too. that can be consolidated to drive efficiencies; set KPIs and track them in concert with your IT lead. Reconsider your sunk investments based on enterprise-wide needs and able to adapt to change; make the long-term financial case. Design a new Future Systems strategy on technology investments; measure their returns and opportunity costs. Assess your company’s current position
  17. 17. Copyright © 2020 Accenture. All rights reserved. StartyourPATHSto FutureSystems www.accenture.com/futuresystems

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