Growth-Driving Enterprise Innovation Model | Accenture

A CEO’s guide to getting the most
out of new technologies
YOURLEGACY
ORYOURLEGEND?

Copyright © 2020 Accenture. All rights reserved.
The technology investment decisions companies
make will determine—more than ever—their
financial success.
Most companies are failing to maximize the full
value of their investments. The gulf in financial
performance between competitors is growing.
With significant revenue growth at stake, CEOs
must take a leadership position to close the
Innovation Achievement Gap*.
*Innovation Achievement Gap: the difference between potential and realized
value from technology investments.
AllCEOsare
techCEOs

WeguideCEOsonthetechnologystrategies
thatwillimprovereturnoninvestment
We classified companies into ‘Leaders’, who are building Future
Systems and the ‘Middlers’ and ‘Laggards,’ who are investing in—
but not scaling—innovation.
Accenture has conducted the
largest enterprise systems survey
to date:
8356Companies
885CEOs
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Leaders
ofthecompanies
Top10%
Middlers
ofthecompanies
Mid20%
Laggards
ofthecompanies
Bottom25%

78% of CEOs surveyed believe they are
effective at creating a safe space for
experimenting with new technologies.
80% of CEOs say they have the right
systems in place to innovate
at scale… …but only 8% of those CEOs can be
classed as Leaders.
The rest are struggling to close an ever-
widening Innovation Achievement Gap.
TheInnovation
AchievementGap
startswithagulfbetween
ambitionandreality…

…andcontinues
withafragmented
techstrategy
Most organizations put business unit, product or
geography heads in charge of tech investments.
The isolated pockets of customized systems
rarely work with each other.
When technology is increasingly dependent on
platforms, ecosystems and large varieties of
data, this prevents the scaling of innovations
across the enterprise.

Leadingbyalongshot
Leader CEOs:
The Strongest
Advocates of
Future Systems
It’s important to
minimize process
differentiation
100%
90%
80%
70%
60%
50%
40%
5%
17%
Future Systems will
blur the lines within
the technology stack
It’s important to
decouple tightly
integrated systems
to make them more
flexible
Future Systems
will provide
strategic agility
CEOs of Leader companies
N=67
CEOs of Middler companies
N=261
CEOs of Laggard companies
N=187
3%
34%
24%
14% 14%
6%

Companies who are evolving to
Future Systems are growing at
twice the rate of companies who
are struggling to scale innovation.
But Middlers also trail Leaders
significantly.
Self-reported annual growth rates 2015-2018.
FutureSystemsstrategiesfuel
revenuegrowth
Leaders
9%
Middlers
6%
Laggards
4%

It’scoldcomfortforMiddlers
Leaders’ expected growth is represented by the purple line, Middlers the dark blue line and
Laggards the pale blue line (self-reported). This illustrative model shows the opportunity
cost of not evolving to Future Systems using a company with $10 billion in revenue in 2015.
Leaders grow 2x faster
than Laggards. But also
outpace Middlers
by 50%.
$22bn
$20bn
$18bn
$16bn
$14bn
$12bn
$10bn
2015 2016 2017 2018 2019 2020 2021 2022 2023
For Laggards,
$3 billion was
forgone in 2018.
But even Middlers
left nearly $2 billion
on the table.
$20 billion will
be lost in 2023
by Laggards.
And for Middlers,
$13 billion will be
at stake.
Leaders Middlers Laggards
Gap=46%
Gap=23%
Revenue(billions)

CEOsandCIOsseeeyetoeye...
...but more
work must be
done to address
the Innovation
Achievement Gap.
It’s important to
minimize process
differentiation
90%
85%
80%
75%
70%
65%
60%
Future Systems will
blur the lines within
the technology stack
Future Systems
will provide
strategic agility
It’s important to
decouple tightly
integrated systems
to make them more
flexible
All CEOs
N=885
All IT
N=3995

HowtotaketherightPATHS
Leader CEOs consistently
take five key steps to
close their innovation
achievement gap and rise
above the rest.
P
A
T
H
S
Progress:
Apply new technologies to evolve across multiple business
processes to improve efficiencies and performance
Adaptation:
Adapt IT investments to suit changing business needs
Timing of Tech Adoption:
Properly sequence and roadmap adoption of new
technologies
Human + Machine Workforce:
Activate and enable the workforce to use and be
augmented by technology
Strategy:
Actively align business strategy and IT strategy to
better seize opportunities

Route 1
Transform low-hanging business
processes, e.g. customer-facing
processes.
Optimal option
Route 2
Build innovation centers / hubs to
transform multiple processes.
Route 3
Reimagine business
processes for the future,
and target multiple
processes with the same
technologies.
The tempting options
Progress
TheCEO’spaths
How extensively/broadly should we apply new technologies to evolve
business processes across the enterprise?
Leaders transform more than 2
processes for every one that Middlers
transform, and 3 times as many
as Laggards.

Route 1
Patch legacy systems.
Optimal option
Route 2
Lift-and-shift to the cloud.
Route 3
Decouple from legacy and
transform with the cloud,
catalyzing innovation
across silos.
Adaptation
TheCEO’spaths
83% of Leaders say it is important to
decouple data from legacy infrastructure,
vs. 61% of Middlers, and just 37%
of Laggards.
How do we adapt our current IT investments to changing business needs?

Route 1
Experiment with new tech on the
leading-edge.
Optimal option
Route 2
Double down on industry-specific,
customized tech.
Route 3
Identify fundamental
technologies and prioritize
their adoption in terms
of timing and processes
targeted.
Timing
TheCEO’spaths
20% of leaders adopt Software-as-a-
service, vs. 9% of Middlers and 8%
of Laggards.
How do we properly sequence and map out adoption of new technologies?

Route 1
Rely on traditional, periodic training
about new tech (classroom, online,
standardized).
Optimal option
Route 2
Individualize training, allowing
employees to learn at their own
pace.
Route 3
Deliver tech-augmented
training for working with
technologies of the future
(AI, XR and experiential,
personalized).
Human+Machine
TheCEO’spaths
86% of Leaders use intelligent
technologies such as AI, Analytics, and
Machine Learning to predict and match
worker training with required job skills,
vs. 60% of Middlers and 35% of Laggards.
How do we activate and enable the workforce to use and be augmented
by technology?

Route 1
Allow business units to rapidly, and
independently, address their
pain points.
Optimal option
Route 2
Devise a tech strategy to explore
ambitious business goals
like new business models or
adjacent markets.
Route 3
Build boundaryless,
adaptable and radically
human IT systems that
explicitly enable scale and
strategic agility.
Strategy
TheCEO’spaths
94% of Leaders regularly track value of
new technologies vs. 76% of Middlers, and
47% of Laggards.
How can we intentionally manage the intersection of business strategy and
technology strategy to better seize opportunities?

Threeessentialsteps
alongthePATHS
It´s time to match intention with action with
the PATHS framework.
Leaders enjoy a considerable head start, and they will
not be standing still. Their systems are designed to
embrace tech innovations so that they can create and
scale them across the enterprise.

Yours should too.
that can be consolidated to
drive efficiencies; set KPIs
and track them in concert
with your IT lead.
Reconsider your
sunk investments
based on enterprise-wide
needs and able to adapt to
change; make the long-term
financial case.
Design a new Future
Systems strategy
on technology investments;
measure their returns and
opportunity costs.
Assess your
company’s
current position

StartyourPATHSto
FutureSystems
www.accenture.com/futuresystems

Growth-Driving Enterprise Innovation Model | Accenture

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