Disruption—The new reality of business

More than 44 percent of companies in India are experiencing disruption and 38 percent are highly susceptible to disruption, reveals an Accenture study. What does this imply? US$1.8 trillion of Indian enterprise value is either currently being disrupted or is susceptible to future disruption.

Eager to cash in on the benefits, companies are increasing investments to drive disruption (rather than being the victim) but aren’t reaping the full benefits. Their profits are down, the scale of non-performing assets (NPAs) is up and growth in many sectors is challenged. To add to the woes, our analysis of 2,015 Indian companies shows that these trends will continue—disruption will lead to 50 percent of companies on the S&P Index being replaced over the next 10 years.

Does that mean we need to fear disruption? We don’t think so.

Disruption follows an understandable, predictable pattern

Accenture is helping clients dissect disruption, understand its pattern and harness it to their advantage. We created the Disruptability Index to better understand the nature of disruption in an industry context. Our approach? We studied 2015 companies with annual revenues of at least US$10 million, across 19 industries and 59 industry sub-segments using 27 indicators to gauge both the level of disruption and susceptibility to future disruption.

Now is the time to learn how to:

Dissect disruption

Most know disruption is coming- few are prepared. Dissecting disruption is the first step toward overcoming common misconceptions.

Understand the pattern

Disruption follows an understandable pattern. The starting point for business leaders is to understand where in this pattern their industry is positioned, and why that’s the case.

Take advantage

To take advantage of disruption, executives need to deploy a tailored strategy, underpinned by a combination of four actions.

Where does your industry stand?

Combined enterprise value of US$1.8 trillion is either currently disrupted or is susceptible to future disruption.

44%

of companies are experiencing disruption

38%

are susceptible to future disruption

Currently, the level of disruption is highest among software and platform providers, communications, media and entertainment, and high-tech companies. We also see high levels of disruption in the energy, infrastructure and transportation services, banking and travel industries.

Disruption is an opportunity

In periods of rapid change, a new strategy is required—one that enables companies to act in the face of disruption, confidently. We call this strategy “Rotating to the New” and it has four actions:

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Grow the core

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Transform the core

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Scale the new

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Pivot wisely

Turn your vulnerabilites into advantages

Business leaders can use the Disruptability Index to address risks from disruption and drive strategic responses. Additionally, they can identify opportunities to exploit their own core competencies in adjacent markets that are exposed to disruption today. Companies that act on their rotation strategy will be able to take advantage of disruption.

Is your industry being disrupted? Are you prepared to boldly embrace disruptive opportunities? Read the full report to identify where various industries in India stand. It’s time to take advantage of disruption and shape your own future.

Anindya Basu

Geographic Unit and Country Senior Managing Director – Accenture in India

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