The Future of Electronics and High Tech

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An Accenture survey among chief operating officers (COOs), with a focus on the electronics and high tech industry operating model has revealed that more than 75 percent of companies are making global operations a priority in the coming years.

The reason is clear: the upturn is ushering in a hypercompetitive environment with new and emboldened competition; fast-changing and interconnected technologies and more demanding customers. The need to constantly find new scale and global efficiencies while also maintaining a razor-sharp focus on the often distinctive needs of local customers is greater than ever—and increasingly difficult to achieve.

Illustrating this difficulty:

• fewer than one-third (31 percent) of COOs strongly agree they are leveraging their global operations scale effectively
  
  
• only one-fifth (21 percent) strongly agree they are well-positioned to respond rapidly and effectively to changes in the global marketplace
  
  
• just 17 percent strongly agree they are capitalizing effectively on their international expansion

The survey results highlight the fact that electronics and high tech industry executives are struggling to align prioritization of the operating model with the realities of operational decisions across their organizational structures, processes, information technology and workforces. Moreover, nearly all respondents claim to have the capital to execute their global operations strategies, so the key issue is not making the investments—it’s making the right investments in the right capabilities.

Learn more about Accenture’s research for the Electronics and High Tech Industry .

As companies in the electronics and high tech industry prepare for growth in the upturn, meeting demand in worldwide markets has become a critical concern. To reach these new customers, the electronics and high tech industry, like all global industries, face competing imperatives of operational efficiency and market responsiveness. In the electronics and high tech industry, it means maintaining a leaner cost structure and greater speed to market than the competition, while offering the latest, most innovative and most useful technologies to diverse customers across the world.

Each company makes different choices around how they will address these imperatives.

As companies come out of the downturn, the choices they face have become stark and more pressing. The main cause: A more fierce and uncertain competitive environment than most companies have ever experienced, caused by the rapid rise of new competitors and unpredictable technology developments.

The first critical step is to review and refine the competitive essence of the company—the key capabilities that provide the most lasting and powerful competitive differentiation for the company. This competitive essence must act as a guide when making choices and investment priorities across the company’s operations.

Our research underlines the importance of fully utilizing the critical levers of the organizational structure, management processes, management technologies and people—and aligning them to bring their competitive essence to life. Moreover, our research highlights important shortcomings that electronics and high tech companies face with respect to IT, in terms of not supporting their global operations with cutting edge enterprise technologies. We also highlight deficiencies around talent, especially when it comes to attracting a global workforce and sourcing ideas from around the world.

Looking forward, our research uncovers three major imperatives that will help differentiate high performers in the next phase of competition. A winning electronics and high tech industry operating model must be designed to support these imperatives:

• Chart new growth trajectories into new products, services, markets and segments— a critical imperative as products become commoditized and as customers increase in diversity and raise their expectations of new products and services.
  
  
• Organize for worldwide innovation— as the war for global talent and ideas heat up, electronics and high tech firms will be increasingly challenged to access innovation from new sources and to bring these innovations to traditional and new markets quickly and effectively.
  
  
• Leverage the broader ecosystem of technology alliances, channel partners, suppliers and customers—firms must increasingly use a network of partners to help identify new opportunities, to stay on top of evolution, to change and more effectively manage risk.
  
  

The future of the electronics and high tech industry may be difficult to predict, but it also presents considerable opportunities. High performers will today be designing a winning operating model for tomorrow’s strategic challenges and opportunities. They know that the competitive advantage lies in a flexible operating model that can adapt to the fast-evolving market dynamics of the future.