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Reinvention in high tech
The case for reinvention
10-MINUTE READ
January 24, 2024
High tech is the industry that's transforming the world by creating the innovations that have changed the way we live and work. But in this fast-changing world, high tech companies must reinvent themselves to keep up with the pace of disruption and with customers' changing needs. In this first blog, I'll explore why reinvention in high tech is essential, the trends driving the market, and why companies must act now. Come with us as we explore the possibilities of reinvention in high tech.
According to Accenture´s Pulse of Change: 2024 Index, The rate of change affecting businesses has risen steadily since 2019, by 183% over the past four years and by 33% in the past year alone.
High tech companies face an array of disruptive trends
The high tech industry is dealing with many challenges: tough competition, new customer demands, cybersecurity threats, ever-increasing new tech, and continued macroeconomic upheaval. Our Pulse of Change report found that tech disruption is now the #1 cause of disruption in 2023 (88%), up from sixth place in 2022, stemming from the opportunities generative AI creates. This extraordinary pace of disruption means that high tech industry leaders must innovate the new vectors for growth while unlocking value across the enterprise in ways that reinvent the enterprise.
In the chart below, we can see the key factors that industry leaders consider to be driving their reinvention strategy. Its not a surprise to see that the pace of tech innovation is the main driver, accelerating 90% of high tech´s reinvention strategy.
Key drivers accelerating high tech´s reinvention strategy:
But are companies prepared for this accelerated technological change?
According to our Pulse of change survey, although there is wide agreement that the rate of change is at unprecedented levels, 54% of high tech leaders surveyed say they are not fully prepared for it. For this reason, organizations plan to increase investments in new technologies to improve their efficiency and to manage through changes/disruptions in the business environment.
In my conversations with leaders in the industry, I've heard repeatedly about their need to reinvent, especially as customer demands change. Many are looking for new ways to revolutionize their business to stay ahead of the competition and to grab market share.
Generative AI offers a clear opportunity to accelerate reinvention and close the performance gap. This technology has the power to reinvent every facet of an organization. We believe that high tech companies have a uniquely powerful and challenging dual role to play in the field of generative AI. Through our work, we see that our high tech clients are already creating and orchestrating the ecosystem that powers Gen AI, positioning them as the pioneers of this disruptive technology.
86%
of high tech executives believe that holistic transformation executed across functions can create accelerated results
72%
of leaders in the technology industry plan to increase spending in Data and AI (including Gen AI) in 2024
97%
of organizations continue to expect generative AI to be transformative for their company and their industry, only 26% of organizations say they have started investing “significantly” in generative AI initiatives
Reinventing high tech
Companies need a new, deliberate strategy of continuous reinvention that aims to set a New Performance Frontier, centered around a strong digital core. We have defined 10 distinctive capabilities for high tech businesses of the future to innovate and go beyond today’s benchmarks, all while embracing generative AI as the technology tool to accelerate reinvention. These 5 capabilities are summarized as follows:
- Seek and scale new growth: Develop the ability to acquire new capabilities and partnerships at speed while innovating with adjacent industries and new players. Invest in scaling new business models, like as-a-Service , shifting from one-time sales toward multi-year, service-driven recurring revenue streams.
- Create and deliver winning consumer and customer experiences by placing the customer at the center of processes, products, and platforms. For example, redesign the supply network to bring products closer to the customer, while improving resiliency and reducing risk.
- Power your people: Prioritize the recruitment, development, and retention of teams equipped with the right skills and mindsets to enable the enterprise New Performance Frontier.
- Unlock value across the enterprise by delivering more than just financial performance. Redesign operations to cut waste, increase productivity, and recognize untapped value across financial, customer, employee, and sustainability metrics.
- Invest in a future-ready Digital Core as a source of competitive advantage, creating an interoperable set of systems across the enterprise that allow for rapid development of new capabilities and better enable business outcomes.
Such a big strategic change can seem overwhelming. There is no one-size-fits-all solution: each high tech company needs to find the right mix of strategic focus, growth vectors, technology, and people to make their particular vision of reinvention come alive.
Last year, Accenture Research found that only 8% of companies are Reinventors, companies were making reinvention a core part of who they are. This year, while reinventors are still an exclusive club, they are gaining ground by applying generative AI to unlock human potential and by investing in the digital core, impacting their company’s entire ecosystem.
Are you ready to reinvent?
High tech is the industry that has transformed our world, and with the opportunities presented by Gen AI, it can continue to be the industry that shapes the future of business. High tech leaders must think boldly and aim over the horizon to establish their New Performance Frontier and act decisively to implement and scale their strategic choices, while developing the capability to reinvent continuously. The journey to tomorrow starts today.
In my second blog, I discuss the new vectors for growth that high tech companies must embrace to accelerate their journey toward Reinvention.