February 01, 2016
Reinventing Digital Economy Strategy with “Predictable Disruption”—Accenture Technology Vision 2016
By: Omar Abbosh

For many top executives, creating a digital business strategy that survives for any length of time is an exercise in frustration—an attempt to imagine the unimaginable. With the accelerating pace of change, digital disruption can derail even the best-laid plans.

Yet the picture doesn’t need to be so grim. As outlined in “Predictable Disruption,” one of the five digital trends identified in the Accenture Technology Vision 2016, major enterprises in any industry can develop a longer-lasting strategic capability. Think of it as a superior ability to foresee how disruptions will emerge and play out.

The key to developing this capability is to rethink the way you formulate and execute digital business and digital technology strategy. In the digital economy, companies essentially need to do three things: understand how technology can improve customer experiences; develop an innovation gene-set in core business operations; and orchestrate developments in the digital ecosystem to take advantage of disruption—and even guide it.

Difficult decisions to make
I know it’s not easy to make big shifts in strategy. Many of our clients operate as global or multi-national organizations with multiple lines of business. Changing a business model, technology infrastructure or internal culture to capitalize on disruption can be an extraordinary difficult undertaking. It also requires time.

Even enterprises that do recognize disruptive opportunities—such as Kodak did with digital photography—may not be able to extricate quickly enough from traditional supply chains or legacy business operations to lead their industry in a new direction. As we’ve seen repeatedly, the digital economy truly waits for no company. That’s why it’s so critical to get a head-start on Predictable Disruption now.

Changing face of disruption
In this fast-moving arena, I find it ironic that disruption is not what it used to be…that even disruption is being disrupted. What I mean is it’s no longer the sole province of visionary entrepreneurs or “prophets of industry.”

Now we are seeing more and more Global 2000 enterprises building digital business and technology platforms, connecting with new partners and starting to reimagine industries. In time, these will become the foundation for entirely new digital ecosystems. (For more on this subject, see the related Platform Economy trend in Technology Vision 2016).

This ecosystem growth is happening in the development of smart homes, in the rise of digital health, in the rapid progress of the connected car, just to name a few. These changes are dissolving traditional industry barriers. With the connected car, for example, auto manufacturers are now teaming with software companies to provide diagnostics on the car’s health, with media companies for entertainment and information services, and with insurers that want to offer coverage by the mile.

As this digital ecosystem matures, it won’t be long before we see a ripple effect on other industries. Connected cars will most likely communicate with smart homes to manage energy, give directions to appliances, and automatically replenish groceries or other goods (see Figure 1).

Figure 1: Connected car platforms are the genesis for a much broader digital ecosystem evolution.

Figure 1: Connected car platforms are the genesis for a much broader digital ecosystem evolution.

By watching the trajectory of this ecosystem disruption, enterprises in many industries can seize the opportunity and plan a strategy that draws on the full disruptive potential of connected cars. Think health monitors in child car seats, battery integration to the power grid and on-road shopping using your voice.

New strategic tools
How do digital businesses flourish in fast-evolving ecosystems? As I mentioned earlier, expanding your strategy toolkit in three ways will provide a boost:

  1. Understand how technology can improve customer experiences—Gain familiarity with how emerging (and existing) technologies, such as social, mobile, analytics, cloud, artificial intelligence and Internet of Things, can provide customers with a better value proposition. This requires reasonably good insight into what end customers want. Apply design thinking to your products and services, as a way of meeting changing customer needs with greater agility. Adjust business models and processes to provide this improved customer experience and exploit the possibilities of rapid in-market experimentation to fine tune.

  2. Develop an innovation gene-set—Create an organization and culture that seeks and tests both in-house and external innovations. Use digital platforms to hook up to ecosystems and use innovation from hundreds of other companies. Tap into the wisdom of crowds: the ideas of employees, customers, suppliers and outside experts. Explore the approaches of open innovation, from hackathons to partnerships with startups. And embed these innovation approaches into your core business operations.

  3. Orchestrate digital ecosystem developments—Monitor and begin to understand relevant digital platform and ecosystem plays. Think about which areas of the business could take advantage of these advancements. Proactively plan how to take part in these disruptions through teaming arrangements or mergers and acquisitions.

Disruption today is a fact of life and death for every digital business. It’s time to take a look at your strategy and your strategic capabilities in a world of dynamic and rapidly evolving digital ecosystems.

How will your enterprise put Predictable Disruption to use?

To learn more about this year’s Accenture Technology Vision, I invite you to read the chapter highlights, check out the at-a-glance visuals, view our videos and slideshares, and keep checking this blog for more discussion of these trends.

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