PIVOT TO VALUE

WITH LIVING
SYSTEMS
Contents
A gap between investment and value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Lagging the field has consequences—now more than ever . . . . . . . . . . . . . . . . . . . . . . . . 4

Business and technology at a crossroads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Living Systems: A pathway to putting technology innovation at the heart of every company . . . . . 7

01 Reimagine a growth strategy powered by technology . . . . . . . . . . . . . . . . . . . . . . . 9

02 Realign the organization to put technology at the heart of every business . . . . . . . . . . . 11

03 Adopt new practices for agility and experimentation . . . . . . . . . . . . . . . . . . . . . . . . 13

04 Create a flexible technology core for sustainable change . . . . . . . . . . . . . . . . . . . . . 15

05 Empower people to innovate with technology . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Reinvention in the midst of disruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

2 PIVOT TO VALUE WITH LIVING SYSTEMS

A gap between investment and value
Technology is everywhere, What we’re seeing in our research is that today’s Leaders are doubling down on their technology

but value is not. That’s C-suite is making significant investments in

new technologies. However, they’re deploying
investments. And laggards recognize they
urgently need to accelerate their digital
what companies across technologies in pockets, or silos, of their transformations. Leaders are innovating

industries have discovered organizations without effectively scaling them

across the enterprise to realize the full benefits.
at scale with technology thereby achieving
significantly more value from enterprise
as they’ve invested in new Even before COVID-19, most companies systems and seeing more than twice the

technologies. They just struggled to harness technology for business

change, according to Accenture’s Future
revenue growth of others. And they lead the
pack in customer centricity, profitability and
aren’t getting the return on Systems research.1 Now, the gap between agility. Laggards are more likely to face growth

investment they expected. leaders (the top 10% companies) and

laggards has widened.
stagnation and financial constraints, as well
as be more vulnerable to industry disruption.
Why?

3 PIVOT TO VALUE WITH LIVING SYSTEMS

Lagging the field has consequences—
now more than ever
Revenue growth Customer lifetime value Operating margin Agile culture

10 100 100 100

8 80 80 80 LEADERS
LEADERS
9% 89%
6 60 60 60

LEADERS
59%
4 40 40 LEADERS 40

45% LAGGARDS
LAGGARDS
47%
4%
2 20 20 20
LAGGARDS LAGGARDS
23% 25%
0 0 0 0

Leaders who innovate at Leaders have experienced Leaders are ahead in using Leaders break down cultural
scale grow at a rate of increased customer lifetime innovation investments to barriers by having IT and
2x greater than Laggards value through investments improve operating margins . non-IT talent work together,
who innovate in silos . in innovation as compared compared to Laggards .
to Laggards .

Accenture Future Systems Research

4 PIVOT TO VALUE WITH LIVING SYSTEMS

Business and technology at a crossroads
As the pace of change Companies that can release new technology which for many organizations are still

has accelerated so has the capabilities faster than their competitors are

at a distinct advantage. As a result, businesses
time-consuming activities. And with
siloed annual budget processes, the result
need to quickly embrace have taken innovation into their own hands, is a splintering of strategic programs.

new technology. such as directly experimenting with new

technologies and cloud services in “pockets” What’s more, investment decisions
instead of across the whole company. are not tightly integrated with business
priorities, and most companies have no easy
Consequently, business leaders other way to measure the return on investment.
than the CIO are becoming “evangelists While many have dabbled in agile practices,
of the new.” In fact, IDC estimates most haven’t embraced lean principles at
that nearly 50% of IT investment comes scale, limiting their ability to experiment
from non-IT sources.2 Meanwhile, and innovate. And with low automation
IT teams are often boxed in as custodians adoption, companies are unable to pivot
of traditional enterprise technologies, their business in new directions at speed.
data center services and end-user support,

5 PIVOT TO VALUE WITH LIVING SYSTEMS

All these challenges contribute to what What should companies do instead? Living Systems is an
we call the innovation achievement gap—
the difference between potential and
They need a fundamentally different
approach to building and managing
approach to harness
realized value from technology investments. technology—one better suited to the new technologies and
Simply investing more in technology won’t
necessarily deliver the business flexibility
ever-changing reality of today’s business
landscape. We call this new approach
innovation at scale across
that organizations need. In fact, companies “Living Systems,” because it’s not static; the organization to better
are spending more on technology but
seeing proportionately less in return.
it’s continuously evolving capabilities
and skills in a world of constant change.
achieve business outcomes.
Those companies that were categorized as
“laggards” in our Future Systems research had
15% in foregone annual revenue in 2018, and
this gap was expected to grow exponentially.3

6 PIVOT TO VALUE WITH LIVING SYSTEMS

Living Systems: A pathway to putting technology
innovation at the heart of every company
Living Systems is an Meanwhile, Living Systems can drive To enable this continuous value creation

innovation multiplier that efficiency, free up capital and shift the

majority of spending to innovation for
Living Systems help companies reimagine
their business growth strategy powered
creates value by moving new products and services. by technology; realign their organization

several different levers of When you start with a Living Systems

so technology is at the heart of every
business; adopt new practices for agility and
change, including strategy, approach, you experience incremental experimentation; create a flexible technology

organization, technology innovation in your organization, and the

more you apply the Living Systems approach,
core for sustainable change; and empower
people to innovate with technology.
and talent, in an agile way. the innovation effect is multiplied to
deliver a comprehensive business impact.

7 PIVOT TO VALUE WITH LIVING SYSTEMS

 Pivot to agility with Living Systems What’s more, when COVID-19 hit, the Like most organizations, the company
company was well positioned to navigate used to spend most of its IT budget
Back in 2016, a technology industry
the crisis and emerge even stronger. “keeping the lights on.” Its multi-year
giant reached a crossroads. Its IT function
reinvention changed all that, flipping the
had devolved into a confederacy of So, how did it achieve all this? IT investment curve and steadily freeing
organizations. Business owners had little Through a reinvention designed to outpace up capital to reinvest in innovation.
transparency or shared expectations with the speed and innovation of the company’s The company has now joined the 10%
IT. With systems burdened by decades of digital-native competitors. The company of leaders that can innovate at scale,
legacy code and no strategy to reduce shifted to a modern engineering model growing revenue at twice the rate of
technical debt, the company was spending in which business experts and full-stack organizations that continue to innovate
80% of its IT budget on fixing its past and engineers work in integrated teams with in silos, according to Accenture research.
only 20% on innovating for the future. agile development practices. It migrated
100% of its IT estate to the cloud. And it This pivot to innovation is a pivot to
Fast forward to 2020. The company
adopted automation for a more productive Living Systems, which delivers the agility
spends just 40% of its IT budget on fixed
workforce and AI for data-driven business companies need to stay out in front.
IT costs, with 60% invested in innovation.
decision-making. Most importantly,
And it has cut 83% from the time it
all this was achieved without the need
takes to bring new features to market.
for additional investment—through
a self-funded model.

8 PIVOT TO VALUE WITH LIVING SYSTEMS

 01  Reimagine a growth
strategy powered
by technology
Organizations that want to unlock the
full value of technology need a growth
strategy that is unified across business
and technology.
The focus is on exploring how technology can make the business
strategy a reality and identifying greenfield opportunities in products,
services and competitive positions. This requires a strategic mindset to
help transform the legacy business while positioning for future growth.

9 PIVOT TO VALUE WITH LIVING SYSTEMS

A seamless strategy guides the organization For example, organizations must
towards value and stakeholder return. redesign the funding model to empower Driving a customer-centric culture
experimentation and continuous innovation
As our Future Systems research shows, across the organization, where the A telecoms company’s IT function
leaders have a clear vision and take complete value of initiatives might not took up the challenge to improve
a deliberate stance toward technology be certain upfront. They need to keep customer experience and enhance
adoption. Instead of acquiring new capturing value as the organization overall business agility. With a data-
technology for one-time projects, leaders adapts to changing competitive conditions. driven operating model where business
fund persistent value streams measured and IT are aligned to deliver outcomes
by business outcomes. And to maximize return on investment, and talent is transformed to be service-
especially beneficial in a capital constrained led, the company has achieved a
When companies improve the interaction environment, they need to create mechanisms 25% reduction in cost of ownership,
processes and governance between the to self-fund transformations and redirect a 50% improvement in time to market
business and IT and build a more agile investments to higher value activities. and 80% of IT employees have been
operating model, they see technology-driven redirected to strategic projects.
business growth and transformation.

10 PIVOT TO VALUE WITH LIVING SYSTEMS

 02  Realign the
organization to put
technology at the
heart of every business
Today’s IT departments are usually
organized horizontally, in technology
and functional teams.
And performance is measured through traditional IT service level
agreements (SLAs), primarily based on the speed of response
and resolution of requests. IT is in effect structured to deliver
for IT—that is, services that are measured by IT SLAs.

11 PIVOT TO VALUE WITH LIVING SYSTEMS

The SLA then supersedes what’s important to With true business-IT alignment,
the business (such as disruption in a business organizations change the model, so their Enabling technology and
process caused by an IT failure). This often IT service delivery breaks down functional business capability alignment
creates the “watermelon effect”: green on the barriers, improving collaboration and
outside (IT SLAs are all green, or satisfactory) creativity—whether that’s delivering the The company focused its IT and
and red on the inside (business user product to the end customer or meeting business strategies on shared goals
dissatisfaction from impacted processes). a production output. Through advanced and solving business problems. The IT
automation techniques and technology, workforce was reorganized into squads
By restructuring to vertical teams that are siloed applications and infrastructure support assigned to business areas. As a 
aligned by business processes (also called services that were once separate teams result, speed of innovation improved
“product aligned”), IT services focus on can become integrated services. dramatically: 50% of programs that
business value and are measured by business went live quarterly moved to weekly;
KPIs. These integrated “product teams” are incidents decreased by 30% in the same
self-sufficient, with alignment of all required period. Headcount was also reduced by
IT capabilities to run the systems that support 40% through more efficient operations.
the business and deliver new capabilities at the
speed required by the business. What was once
a series of disconnected efforts deviating from
business objectives and driven by subjective
priorities is now unified under a common vision
with clear prioritization and full transparency.

12 PIVOT TO VALUE WITH LIVING SYSTEMS

 03  Adopt new
practices for agility
and experimentation
Companies should take steps to make
sure the cycle of innovation is continuous
through modern engineering capabilities.
This approach is a transition from the typical software development
life cycle that used to take 18-24 months to one that employs design
thinking capabilities to co-create solutions with the business and
quickly delivers a minimum viable product (MVP). To do this, companies
need a continuous innovation framework that is MVP-driven with a
“build, measure and learn” approach informed by customer and data
insights. Automation, cloud and platform-as-a-service capabilities are
critical enablers to rapid, continuous and simultaneous development.

13 PIVOT TO VALUE WITH LIVING SYSTEMS

Embracing automation becomes especially Without human intervention, this self-healing
critical as customer expectations and the system fixes the root cause of the integrated Reimagining guest
pace of change increase. The market won’t system’s problem, predicts when issues might experiences with agility
tolerate slow engineering delivery cycles, arise and proactively “fixes” them before
rigid schedules and fragmented, error-prone an incident occurs. A large cruise company’s Living
and time-consuming manual activities. Systems integration approach—
Not only does the IT team dramatically including testing, performance
Finally, MVP-driven continuous innovation improve service quality, it also reduces and engineering—enabled the rapid
benefits from the transition to a vertically the costs of “lights on” IT operations. release of new features for their
aligned organization. Once achieved, This contributes to more value-added digital guest experience platform
it can result in more than 20 MVP projects technology investments with much higher in 10-12 days and helped drive a
simultaneously delivering at speed. and more relevant ROI for the business. 95% reduction in boarding wait time
Using technology like hyper-automation from 10 minutes to just 30 seconds.
These pivots are underpinned by and machine learning, connected
modern operations that shift traditional applications then provide the technological
IT operations from a reactive “fix-on-fail” foundation for new kinds of business,
model to a predictive, preventive one. partners and customer interactions.
Through AI-based correlation of IT events
an integrated command center looks for
patterns that are causing events instead of
separately managing and resolving issues.

14 PIVOT TO VALUE WITH LIVING SYSTEMS

 04  Create a flexible
technology core for
sustainable change
Provides a secure cloud architecture
that is resilient and adaptive to accelerate
innovation, data-driven analytics,
sustainability and business value.

A flexible technology core is foundational to Living Systems. To start,

organizations should assess their existing enterprise architecture and
develop a roadmap to decouple their application portfolio, determine
their target objectives and migrate legacy systems to the cloud.

15 PIVOT TO VALUE WITH LIVING SYSTEMS

Cloud computing is a springboard to A modern technology foundation might
achieve more value from other technologies, seem to resemble a collection of smaller Optimizing agility and resilience
such as AI and analytics. To yield the systems and services; binding these
most benefit from analytics, companies together is what drives differentiation, Enel, a leading European utility, was
need a robust data backbone, capable resilience, speed-to-market and agility. looking to reinvent itself in the cloud.
of ingesting, structuring and processing Using cost savings enabled by their
data from multiple sources. During the recent pandemic, many companies migration to cloud starting in 2015,
needed to shift how they operate, scale they have transformed their business.
Companies must accelerate to the cloud their ecommerce capabilities and provide Today, ENEL enjoys reduced go-to-
securely; they need to analyze their current highly personalized services to customers. market times, optimized cost efficiency
security architecture and make sure there Companies that were already leveraging the and greater business agility through
are effective controls and monitoring. cloud and building agility in their systems use of public cloud. In addition, the
With a hardened security approach, and processes were ready. They were able cloud enabled its more than 37,000
real-time data quality is always improving, to respond to the rapidly changing business employees to work remotely, allowing
and the cloud reinforces business resilience. challenges they faced, better than those them to access corporate applications
with inflexible, fragmented systems and and collaborate securely.
less insight into their customers’ needs.

16 PIVOT TO VALUE WITH LIVING SYSTEMS

 05  Empower people to
innovate with technology
With Living Systems, leaders believe in
a “human + machine” approach, where
humans and technology bring out the best in
each other and improve workforce efficiency.

With a culture of innovation, an agile mindset, and continuous

learning, employees are equipped to capitalize on new and
changing opportunities as the business evolves.

New career models, skills and roles can lead to better business
outcomes. The skills required will be very different and ever evolving—
from today’s developers, engineers, support operations and more to
UX specialists, data scientists, automation architects, AI engineers,
scrum masters and business disruption predictors.
17 PIVOT TO VALUE WITH LIVING SYSTEMS
For example, one role that is central to Living
Systems is the full stack engineer who bridges Embedding an innovation mindset along business lines and prioritizing
the divide between infrastructure, applications “individuals and interaction” over
and data—as well as the divide between Faced with digital disruption in a
“processes and tools.” Small disciplinary
business and IT. From development to support, competitive market and a new merger,
teams combined ING’s development
enabled by a high degree of automation and ING needed to integrate two different
and operations IT functions. Instead of
AI, these engineers have a full view and are IT systems and remove the layers of top-
an extended period of hand-offs and
an integral part of driving business value. down hierarchical decision making that
approvals, product development became
slowed down product development.
an iterative process with the goal of
Sourcing talent also needs to change to better The bank needed to become a workplace
a minimum viable product that could
identify and deploy workers quickly who can of breakthrough innovation, especially if
satisfy early adopters and benefit from
mobilize around new priorities. This means it wanted to attract top tech talent.4
customer feedback. Using this agile way
creating an adaptable and elastic workforce of working, a multidisciplinary team with
In response, its IT department
across a shared pool of internal and external talent from IT, product development and
adopted “agile” development methods
talent. And it means shedding a culture quality assurance developed the ING
typically associated with digital startups.
typified by fixed mindsets, rigid processes Mobile App, which showcased the bank
This included organizing their IT function
and organizational silos for one that rewards as an innovator in mobile banking.
growth mindsets, organizational agility and
customer-centricity.

18 PIVOT TO VALUE WITH LIVING SYSTEMS

Reinvention in the midst of disruption
For at least the last five This kind of reinvention is viewed as They’re now well positioned to emerge

years, every company disruptive and complex; the cultural and

cost hurdles too great. Even as nimbler,
stronger. By adopting a Living Systems
approach, any company can achieve similar
has aspired to become digital native competitors sprung up benefits—without additional investment

a technology company. around them, established players have

had the luxury of time—during the past
or disruption. In fact, there has never
been a more crucial moment to discover
But our research decade of global economic prosperity— the sustainable success that comes

indicates that most to slow-walk large-scale change. from Living Systems.

organizations are still a Then came the pandemic and with

long way from thinking it unparalleled economic uncertainty.

Companies have been forced to compress
and operating with years of transformation into months.

technology at the heart Those that embraced large-scale change

before the crisis have shown greater
of everything they do. business resilience with the ability to
adapt and outmaneuver uncertainty.

19 PIVOT TO VALUE WITH LIVING SYSTEMS

Authors Reference
1 Full Value, Full Stop. “How to scale innovation and
Ramnath Venkataraman achieve full value with Future Systems”. October 2019
Lead – Integrated Global Services,
2 Source: IDC. Worldwide Semiannual IT Spending Guide: Line of Business, 2019
Accenture
3 Full Value, Full Stop. “How to scale innovation and
achieve full value with Future Systems”. October 2019

4 INSEAD case study, “Embracing Digital: ING’s Journey to a New Way of Working;
Greg Douglass
Part 1: ING Faces Digital Disruption.” November 2018. By Lucia Del Carpio,
Lead – Technology, Strategy & Advisory, Yves Doz and Maria Guadalupe. Accessed via Harvard Business Review.
Accenture

Adam Burden
Lead – Technology, North America and Chief Software Engineer,
Accenture

Pavan Sethi
Accenture Technology –
Asia Pacific, Middle East and Africa

20 PIVOT TO VALUE WITH LIVING SYSTEMS

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