It’s coming. And it’s more than a wave. It’s a strategy-shifting tsunami. Unless you know where you are, you’ll never know where to head next. Unless you know what your competition’s strategy is, you’ll never know how to get there first. And unless you start now, you’ll already be behind.
Disruption is at the heart of the software and platform business. It’s an industry where companies succeed by disrupting others. But customer preferences, company strategies, regulations, industries and markets can change quickly. So there’s never time to rest. Offense and defense are equally important.
To help companies better understand their vulnerability to disruption, Accenture developed the "Disruptability Index." The Index helps pinpoint both current levels of disruption and susceptibility to future disruption. Management teams can use the index to gauge how exposed they are today, understand where they are specifically vulnerable and plan an appropriate strategic response.
How can your company shred the tsunami?
It starts with spotting the wave. The Index allows every business to understand their own position. But they can also use it to spot potential opportunities in adjacent industries and clarify the picture of competitors’ strengths and weaknesses. For example, the travel industry is moderately disrupted and highly susceptible to future disruption. A travel company could address its structural challenges by innovating or repositioning the business to create barriers to entry. But for those that don’t take such actions, a platform business offering new travel-related services may well take their place.
Software and platform companies can also use the index to examine individual businesses within their portfolio. While the company may be viable overall, an individual business, product or service line may be vulnerable.
You can’t wait until the crest is already on top of you. History shows that complacency is dangerous. And you don’t have to look hard for examples where failure to innovate has seen a once ubiquitous product or service rapidly lose its market. If users and customers lose interest in a platform it very quickly becomes vulnerable to others offering more innovative products and features.
Three ways to take advantage of the Disruptability Index:
Leaders continuously reinvent themselves. And they do it by adopting the values of a Living Business. They find success in continuously evolving with the needs of customers and executing along three lines: They find new markets for existing products, bring new products to existing markets and expand aggressively into adjacent markets.
The Accenture Disruptability Index
The Accenture Disruptability Index is created from analysis of 28 indicators within 3,629 companies across 80 countries and 20 industry sectors. Indicators represent measures of efficiency and innovation, barriers to entry, performance of incumbents, and the presence and penetration of disruptors.