Leading in the New – A practical guide for Indian enterprises moving towards digital transformation
Armed with greater awareness on the need to survive disruption, large companies in India are increasingly focusing on digital transformation. Today, the adoption of the Internet of Things (IoT), automation, robotics and artificial intelligence (AI) in India, combined with design thinking, extends beyond “digitally intense” industries such as retail, media, and telecom. Manufacturing, transportation, logistics, financial services, and energy companies are leading the effort to operate in new ways. Additionally, the government’s infrastructure drive, including the development of smart cities, is fuelling deep interest in digital.
However, like many of their global counterparts, most Indian companies are still stuck with their current business models. Few, if any, can boast of digitally disruptive business and operating models. Critical aspects of what actually constitutes digital transformation—such as integrating an “as-a-service” platform in business strategy, offering amazing customer experience with strong and consistent data security across multiple integrated channels, collaborating with other industries in an ecosystem, and a renewed organizational structure—are often missing.
Disruptive models involve radically changing both the customer interface as well as the enterprise operations for hyper-efficiency and reimagined customer experience. But the digital transformation efforts of Indian companies, especially in manufacturing, have largely focused on transforming enterprise processes, or parts of the supply chain, and much less on the customer journey.
For example, automotive companies are digitalizing manufacturing lines but continue with traditional approaches in sales and marketing, although a few of them are exploring digital dealerships. The “connected car” remains a concept only for the future. Similarly, in the retail business, e-commerce majors need to transform their supply chain efficiencies; yet, most prefer to invest only in sales and marketing.
Getting “unstuck” and unlocking “trapped value”
The current situation of Indian companies seeking to innovate with new technologies resonates with companies in mature economies. Large established players in those markets also remain chained to their core business and have little leg room for new business solutions, based on advanced technology innovations. Unlike agile startups, they struggle to scale innovations in time to avoid being disrupted or to disrupt the market themselves.
Such companies often fail to identify and unveil the tremendous amount of value trapped within their current business models, supply chains, and wider markets. Unlocking the trapped value involves three simultaneous steps. Firstly, companies will need to build competitive agility and cost structures to stay profitable in the core business and expand investment capacity. They must use the new investment capacity to drive top-line growth in the core business, identify and scale an innovation, and most importantly, know when to pivot to the New by balancing investment between old and new business. Pivoting too slowly could mean being decimated by a disruptor. Pivoting too fast could mean triggering financial risks.
Accenture’s journey in the New
As a US$35-billion multinational company, Accenture has also had to keep pace with market changes and transform itself to lead in the New. The aim is to continuously transform the core business with a “fit for purpose” mindset across five businesses through process automation, analytics, artificial intelligence, crowd-sourcing, and other new technologies. The core business is developed through targeted deals in core areas, with investments driven to markets where aggressive scaling is possible. We scale the new through ventures and acquisitions, ecosystem relationships, and innovation architecture.
A handful of Indian companies have identified and realized trapped value by leveraging advanced technologies. But most find it difficult to carve practical paths to innovating and leading in the New. These companies remain extremely vulnerable to disruption.
The practical path to innovating in the New
Our experience with digital leaders across the globe has shown that to make digital deliver value end to end, companies need to know the following:
-How to build innovation architecture inside the business
-How to scale innovation
-How and when to pivot to the New
The answers to these questions lie in understanding that innovating in the New is a journey, and not an isolated event. It requires a disciplined approach and an architecture that will help the company move its innovative idea from concept and pilot to execution at scale and speed.
Companies will need to collaborate across functions and with partners (possibly from a different industry). They will need the capacity to generate game-changing ideas through co-creation with different communities, use open innovation to shape emerging technologies, build prototypes, rapidly scale up solutions, and industrialize the solutions for sales and delivery.
All these elements—both existing and new capabilities—should be brought together into the operating model through an innovation architecture to create a step-change approach in outcomes for end customers.
The Accenture Innovation Architecture
Based on our own transformation journey and work with clients, we have designed the Accenture Innovation Architecture to help companies innovate using the structural elements of disruption from idea generation to industrialization, combining technology platforms, ecosystems and people. The Accenture Innovation Architecture brings together our various capabilities such as Accenture Research to identify game-changing trends and ideas, Accenture Ventures for partnering and investing in companies creating enterprise technologies using an open innovation approach, Accenture Labs for prototyping, Accenture Studios for solutions, Accenture Innovation Centers to scale solutions and demonstrate their impact, and Accenture Global Delivery Centers to help scale up and industrialize solutions.
Companies in India need to start building or leveraging innovation architectures if they want to effectively harness technology advances for their innovation priorities at speed and scale.
The New is now; not in some dystopian future where profitability concerns will no longer hinder accepting innovation risks. Globally, leading businesses across all sectors have shown how they are innovating in the New and driving growth. An Accenture survey reveals that these companies have achieved between 3.5 percent and 7 percent higher revenues through these new and better approaches to innovation, product development and solution development. This translates to an increase of up to US$1 billion in annual revenue depending on the industry.
While many companies in India are well on their way to a digital future, most need to shift focus from optimizing costs and efficiency to building new business and operating models with customer needs at their centre. They need to not only leverage technology advances in artificial intelligence, IoT, robotics and 3D printing, but integrate these into the value chain—from manufacturing, supply chain, sales and marketing—to create new models for development, delivery and service that can propel game-changing innovation in the industry.
(The author of the story is Country Managing Director, Accenture in India)