A newly released report co-authored by Accenture and market researcher HfS reveals 80% of the global enterprises surveyed worry about digital disruption, but many of those companies lack the data backbone that could help them compete.
The report stated that large organizations are "concerned with disruption and competitive threats, especially from new digital-savvy entrants." Indeed, digital disrupters such as Uber and Lyft in personal transportation, Airbnb in travel and hospitality, and various fintech startups have upset the established order in those industries. The Accenture-HfS report views "intelligent operations" as the remedy for the digital challenge and the key to bolstering customer experience. But the task of improving operations calls for organizations to pursue more than a few mild course corrections, according to Debbie Polishook, group chief executive at Accenture Operations, a business segment that includes business process and cloud services.
"Given what is happening today with the multichannel, with the various ways customers and employees can interact with you, making tiny tweaks is not going to get it done and meet the expectations of your stakeholders," she said.In the past, enterprises that encountered friction in their operations would tweak the errant process, add a few more people and take on a Lean Six Sigma project, she noted. Those steps, however, won't suffice in the current business climate, Polishook said.
Hard work ahead
The report, which surveyed 460 technology and services decision-makers in organizations with more than $3 billion in revenue, suggested professional services firms such as Accenture will have their work cut out for them as they prepare clients for the digital era.
The survey noted most enterprises struggle to harness data with an eye toward improving operations and achieving competitive advantage. The report stated "nearly 80% of respondents estimate that 50% [to] 90% of their data is unstructured" and largely inaccessible. A 2017 Accenture report also pointed to a data backbone deficit among corporations: More than 90% of the respondents to that survey said they struggle with data access.
In addition, half of the Accenture-HfS report respondents who were surveyed acknowledged their back office isn't keeping pace with the front office demands to support digital capabilities.
"Eighty percent of the organizations we talked to are concerned with digital disruption and are starting to note that their back office is not quite keeping up with their front office," Polishook said. "The entire back office is the boat anchor holding them back."
That lagging back office is at odds with enterprises' desire to rapidly roll out products and services. An organization's operations must be able to accommodate the demand for speed in the context of a digital, online and mobile world, Polishook said.
Enterprises need a "set of operations that can respond to these pressures," she added. "Most companies are not there yet."
One reason for the lag: Organizations tend to prioritize new product development and front office concerns when facing digital disruption. Back office systems such as procurement tend to languish.
"Naturally, as clients ... are becoming disrupted in the market, they pay attention first to products and services," Polishook said. "They are finding that is not enough."
The report's emphasis on revamped operations as critical to fending off digital disruption mirrors research from MIT Sloan's Center for Information Systems Research. In a presentation in 2017, Jeanne Ross, principal research scientist at the center, identified a solid operational backbone as one of four keys to digital transformation. The other elements were strategic vision, a focus on customer engagement or digitized solutions and a plan for rearchitecting the business.
The path to intelligent operations
The Accenture-HfS report identified five essential components necessary for intelligent operations: innovative talent, a data backbone, applied intelligence, cloud computing and a "smart partnership ecosystem."
As for innovative talent, the report cited "entrepreneurial drive, creativity and partnering ability" as enterprises' top areas of talent focus.
Debbie Polishookgroup chief executive, Accenture Operations
"One of the most important pieces getting to intelligent operations is the talent," Polishook said. She said organizations in the past looked to ERP or business process management to boost operations, but contended there is no technology silver bullet.
The data-driven backbone is becoming an important focus for large organizations. The report stated more than 85% of enterprises "are developing a data strategy around data aggregation, data lakes, or data curation, as well as mechanisms to turn data into insights and then actions." Big data consulting is already a growing market for channel partners.
In the area of applied intelligence about 90% of the enterprises surveyed identified automation, analytics and AI as technologies that will emerge as the cornerstone of business and process transformation. Channel partners also look forward to the AI field and the expanded use of such automation tools as robotic process automation as among the top anticipated trends of 2018.
Meanwhile, more than 90% of large enterprises expect to realize "plug-and-play digital services, coupled with enterprise-grade security, via the cloud, according to the Accenture-HfS report. And a like percentage of respondents viewed partnering with an ecosystem as important for exploiting market opportunities. The report said enterprises of the future will create "symbiotic relationships with startups, academia, technology providers and platform players."
The path to achieving intelligent operations calls for considerable effort among all partners involved in the transformation.
"There is a lot of heavy lifting to be done," Polishook said.