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Research Report

Reinvention in the age of generative AI

10-minute read

January 12, 2024

In brief

  • Disruption is on the rise and reinvention is becoming the default strategy for success in turbulent times. 
  • Reinvention works, and reinventors are pulling ahead of the pack, creating an imperative for others to act.
  • Generative AI represents a clear opportunity to accelerate reinvention and close the performance gap.
  • We see five imperatives the C-suite must address to reinvent in the age of generative AI.

Reinvention is the strategy for success

We predict that over the coming 12-24 months there will be a significant uptick in companies who embrace generative AI as a catalyst for reinvention.

Why is generative AI different from other technological innovations we’ve seen in recent years? This technology has the power to reinvent every facet of an organization. This is new. Through our work, we see empirical evidence that this trend is already in motion, particularly as generative AI rapidly disrupts every industry.

Disruption meets its match

Organizations are still operating in an unsettled landscape. The annual Accenture Pulse of Change Index found the rate of change affecting businesses has risen steadily since 2019 — 183% over the past four years. In response, 83% of organizations have accelerated the execution of their transformation since last year.

Disruption is up 33% year-on-year

Accenture Pulse of Change: 2024 Index

Reinvention landscape

Many organizations are keen to reinvent — some are further along in their journey than others.

A small number of “Reinventors” (9%) have already met the high bar of building the capability for continuous reinvention. They’re making swift progress in executing their strategy and setting out to define a new performance frontier with technology at the core of their reinvention journey.

Among the largest companies, especially those with revenues over $50bn, the number of Reinventors has quadrupled in the past year. Industry giants are not standing still. Unlike the digital revolution, the largest companies are taking an early lead, leveraging their substantial investment in building their digital cores and resources. Two industries saw double-digit increases in the number of Reinventors: in software and platforms the figure is up 34 percentage points to 43%, and in life sciences it’s up 13 percentage points to 20%.

Most organizations are still at the beginning of their reinvention journey, with few organizations reinventing at scale today. Similar to last year, the majority (81%) are “Transformers.” Transformers should keep going. They are taking many of the right steps toward reinvention — however, they are less likely to be building sustainable capabilities to reinvent continuously and may be missing the speed and cost efficiencies from a connected strategy of reinvention. And we see a financial performance difference, with Reinventors pulling ahead. The remaining 10% of “Optimizers” are organizations where reinvention isn’t currently a priority.

Reinventors are creating an imperative for others to act.

We expect Reinventors to grow the value gap significantly in the next three years.

2019-22 = CAGR based on actuals. 2023-26 = self-reported expectations
2019-22 = CAGR based on actuals. 2023-26 = self-reported expectations

Source: 2019-22 = CAGR based on actuals. 2023-26 = self-reported expectations from the Accenture reinvention survey, stress-tested vs. analyst expectations.

No regrets and strategic bets

Generative AI is not your average technology revolution. In the last several decades, we have not seen a technology that has the potential to impact materially every aspect of a company — this is why we connect generative AI and reinvention. For those companies that deploy this technology to its full potential, they will — by definition — reinvent themselves.

Our research shows that most companies apply generative AI in a way that is focused on well-known, no-regret moves like content generation or customer care, with limited focus on novel, strategic bets. But a smaller fraction of companies (Reinventors or future Reinventors) take a more balanced view, focusing generative AI on those no-regret areas, but also putting significant focus on strategic scaled bets as well.

What Reinventors know

  • Generative AI is unique in its ability to impact the entire value chain and drive both productivity and growth in a way that can reset the performance frontier.

  • The only way to use generative AI to achieve reinvention is to connect it with other technology. To change what they do — their processes and the way they approach talent. All of it.

Generative AI in action

3M hours saved

A government agency responsibly used the latest digital technologies to deliver automations at speed and scale, saving three million operational hours.

16M customer offerings

A bank delivered 16 million hyper-personalized offerings to customers within three months of building a generative AI-powered marketing solution.

+10% revenues

An insurer is reinventing the entire workflow of underwriting with the potential to increase revenues by 10%.

Reinventing today to lead tomorrow

Generative AI represents a clear opportunity to accelerate reinvention. We see five imperatives that the C-suite must address. We explore these imperatives, showcasing examples from our clients to illustrate them.

Five imperatives for the age of generative AI

1.

Lead with value

2.

Understand and develop an AI-enabled, secure digital core

3.

Reinvent talent and ways of working

4.

Close the gap on responsible AI

5.

Drive continuous reinvention      

1. Lead with value

Shift the focus from siloed use cases to prioritizing business capabilities across the entire value chain based on an objective assessment of the business case, enterprise readiness and the corresponding return on investment. Companies can pursue investments in two categories: table stakes investments that offer radical productivity improvements and strategic bets that offer truly novel advantage including reshaping how industries operate.

Action 1

Understand the potential to reinvent your value chain and develop end-to-end capabilities powered by generative AI and new ways of working, rather than only focusing on individual use cases.

Action 2

Be value-led in every business capability you choose to reinvent with generative AI.

Action 3

Identify strategic bets where the technology creates differentiated sources of value that can’t be easily captured by competitors.

Action 4

Reorient your organization from siloed functions to end-to-end business capabilities and decision making through a unified data architecture and cross-functional teams.

Roche: Dissolving boundaries to deliver data-driven cancer care
Realizing the potential for tailoring care to each person requires a new way of working that breaks down barriers across the lifecycle of care that a patient receives. Roche is building platforms that aggregate data from disparate sources. One such platform is its oncology hub, which securely makes sense of all patient data and gives clinicians a central workspace for collaboration. This helps to get patients into treatment faster in a field where time can save lives.

2. Understand and develop an AI-enabled, secure digital core

Invest in technology that runs seamlessly and allows continuous creation of new capabilities. Generative AI requires a fundamentally different enterprise architecture. Data is more fluid, with unstructured and synthetic data becoming more important. And, with new foundation models being released every week, companies need to use the right models to support each capability. AI-ready applications with a flexible architecture allow you to access a range of foundation models in partnership with ecosystems. Reinventors prioritize their digital core as a key competency.

Action 1

Understand what “digital core” means for you and look at your technology objectively to understand where your digital core is — relative to the industry, and most important, relative to what is needed to use generative AI.

Action 2

Understand what a data and generative AI backbone is, and what it will take to build it.

Action 3

Ensure your CIO is embedding cyber security practices early in the lifecycle across technology and that you have a strong security culture to prioritize resiliency.

Action 4

Understand your current technology and advisory ecosystem, and refresh your strategy on how you will work with them to compress the reinvention cycle.

Action 5

Rigorously measure the progress toward ensuring more than 50% of your technology investments are toward building the new.

Southeast Asian national oil company: Simplifying volumes of data
This client has huge volumes of data in different formats — and generates more daily. After taking a holistic look at the issues, it deployed generative AI and cognitive search to realize the true value of its data and drive new growth. Its new knowledge base incorporates more than 250,000 documents with structured and unstructured information, surfaces the desired information and converts it into a chosen format. The new, integrated setup makes information discoverable with minimal effort, automates the knowledge-gathering process for different roles across the organization and helps reduce accidents.

3. Reinvent talent and ways of working 

Set and guide a vision for how to reinvent work, reshape the workforce and prepare workers for a generative AI world. Reinventors are two times more likely than other organizations to anticipate productivity gains of 20% or more in the next three years. Two out of three strongly agree that, with generative AI, work will become more fulfilling and meaningful. Of all the executives we surveyed, 95% agreed that generative AI will in fact create net new jobs in their workforce. And it will mean leaders with different skills, who make change a core part of company culture by giving people a voice in the process.

Action 1

Create a talent strategy that identifies how work will change, documents the impact to roles and assesses what skills are needed for every generative AI use case.

Action 2

Build strong change competencies that put people at the center so that you understand the impact of generative AI on all aspects of people and their experiences.

Action 3

Develop the continuous learning capabilities needed to support reinvention, either organically or with partners, and ensure workers have market-relevant skills for generative AI and are actively involved in change.

Action 4

Review HR capabilities and invest in the competencies and technology needed to support the reinvention vision. HR is a core part of the business strategy.

Action 5

Review your employee value proposition and ensure that it makes employees feel Net Better Off for working at your company, and that your use of generative AI is consistent with your commitments.

Biopharmaceutical company: A reinvention to match its ambition
Aspiring to be the premier research-intensive organization specializing in the science of discovering and developing new therapies, this client is developing new types of leadership training and experiences to help foster the entrepreneurial mindsets and new ways of working that support its ambitions. This includes involving people properly in the design process, a program to upskill thousands of people to make them experts on generative AI, and bringing in the right talent at the right times.

4. Close the gap on responsible AI

Design, deploy and use AI to drive value while mitigating risks. The vast majority (96%) of organizations support some level of government regulation around AI, but only 2% of companies have self-identified as having fully operationalized responsible AI across their organization. The gap between intent and execution Is huge, and must be addressed. Closing the gap requires more than a responsible AI framework for risk management and ethical, sustainable use of AI. It requires an actionable plan that moves from commitment and frameworks to action on the ground.

Action 1

Adopt responsible AI principles with clear accountability and governance for design, deployment, and usage.

Action 2

Operationalize the responsible AI principles with a formal program, backed by investment and technology.

Action 3

Ensure that immediate use cases are triaged with responsible AI embedded into all deliverables while building out the capabilities. Every use case should be able to articulate the risks and how you are mitigating them.

Action 4

Engage across functions to address workforce impact, compliance with laws, sustainability and privacy and security programs.

Monetary Authority of Singapore: Operationalizing a ground-breaking responsible AI program
The Monetary Authority of Singapore (MAS) is one of the first financial regulators to have a responsible AI program. MAS established Veritas, an industry consortium, to help financial services institutions (FSIs) evaluate their AI and data analytics solutions against the principles of fairness, ethics, accountability and transparency. A core team within Veritas developed a methodology framework to operationalize those principles. This helps FSIs gain value from AI responsibly while building a fairer future for billions of consumers worldwide.

5. Drive continuous reinvention

Because change is constant, reinvention never ends. Organizations must drive continuous reinvention. Organizations cannot approach reinvention as a one-time effort undertaken every few years. They must build the capability to continuously reinvent and make the ability to change part of the organizational DNA. It’s a switch that places an enterprise into a state of openness to new thinking, requiring a cultural and operational mindset for continuous change, powered by a flexible digital core that supports generative AI at pace and at scale.

Generative AI has democratized artificial intelligence and made technology much more human-like. This means the pathway to reinvention is much faster than we envisaged even a year ago, as the technology has the potential to redefine entire value chains. Organizations that make bold bets to reinvent while recognizing the importance of blending technology with people’s ingenuity will capture long-term value and build lasting resilience.

Where could reinvention take your business?

Our industry-specific diagnostics help organizations shape a blueprint for successful reinvention and define how best to use generative AI across the enterprise.

WRITTEN BY

Jack Azagury

Group Chief Executive – Strategy & Consulting

Muqsit Ashraf

Lead – Strategy

Oliver Wright

Senior Managing Director – Consumer Goods & Services, Global Lead

Karen Fang Grant

Global Research Lead – Industry Networks & Programs

Mike Moore

Principal Director – Accenture Research