Living systems reveal the tech gap between investment and value

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David Christie | Intelligent Engineering Services Lead | Accenture Africa | mail me |


As companies increasingly invest in new technologies, one thing is clear: technology is everywhere, but value is not. The return on investment (ROI) is not as expected.

According to new research that we have released, today’s business leaders are deploying new technologies in pockets, or silos without effectively scaling them across the organisation to realise the full benefits.

We conducted a largest ever enterprise survey of more than 8,300 companies across 20 industries and 20 countries. The results show that before COVID-19, most companies struggled to harness technology for business change, and now the gap between leaders – the top 10% companies – and laggards has widened.

The Pivot to Value with Living Systems study highlights that leaders are doubling down on their technology investments and innovating at scale to achieve significantly more value from enterprise systems, while laggards recognise, they urgently need to accelerate their digital transformations and stop innovating in silos.

Leaders are thus seeing more than twice the revenue growth of others and show excellence in customer centricity, profitability and agility. Laggards, however, are more likely to face growth stagnation and financial constraints, as well as be more vulnerable to industry disruption.

Business and technology at a crossroads

The pace of change has accelerated and so has the need to quickly embrace new technology.

Companies that can release new technology capabilities faster than their competitors are at a distinct advantage, and under this pressure, businesses are experimenting with new technologies and cloud services in pockets instead of across the whole company.

We are therefore seeing business leaders other than the CIO taking the forefront to introduce new technologies into the business, while IT teams are often boxed in as custodians of traditional enterprise technologies, data centre services and end-user support, which for many organisations are still time-consuming activities.

Investment decisions are not tightly integrated with business priorities and most companies have no easy way to measure the return on investment.

Most companies haven’t embraced agility at scale which limits their ability to experiment and innovate. With low automation adoption, companies are unable to pivot their business in new directions at speed.

These challenges all contribute to the innovation achievement gap – the difference between potential and realised value from technology investments. Companies need a fundamentally different approach to building and managing technology that is better suited to the ever-changing reality of today’s business landscape.

Living Systems: A new approach to harness technology at scale

Living Systems is an approach to harness new technologies and innovation at scale across the organisation to better achieve business outcomes. Living Systems can drive efficiency, free up capital and shift the majority of spending to innovation for new products and services.

When you start with a Living Systems approach, you experience incremental innovation in your organisation, and the more you apply the approach, the innovation effect is multiplied to deliver a comprehensive business impact. Below are five requirements to adopting the Living Systems approach.

Reimagining a growth strategy powered by technology

Organisations that want to unlock the full value of technology need a growth strategy that is unified across business and technology. Such a strategy guides the organisation towards value and stakeholder return.

Instead of acquiring new technology for one-time projects, leaders fund persistent value streams measured by business outcomes.

When companies improve the interaction processes and governance between the business and IT and build a more agile operating model, they see technology-driven business growth and transformation.

Realigning the organisation to put technology at the heart of every business

Today’s IT departments are usually organised horizontally, in technology and functional teams. With true business-IT alignment, organisations change the model, so their IT service delivery breaks down functional barriers, improving collaboration and creativity.

Through advanced automation techniques and technology, siloed applications and infrastructure support services that were once separate teams can become integrated services.

Adopting new practices for agility and experimentation

Companies should take steps to make sure the cycle of innovation is continuous through modern engineering capabilities.

Customer expectations and the pace of change are increasing. The market won’t tolerate slow engineering delivery cycles, rigid schedules and fragmented, error-prone and time-consuming manual activities.

Using technology like hyper-automation and machine learning, connected applications then provide the technological foundation for new kinds of business, partners and customer interactions. This contributes to more value-added technology investments with much higher and more relevant ROI for the business.

Creating a flexible technology core for sustainable change

Organisations should assess their existing enterprise architecture and develop a roadmap to a secure cloud architecture that is resilient and adaptive to accelerate innovation, data-driven analytics, sustainability and business value.

Cloud is a springboard to achieve more value from other technologies, such as AI and analytics.

During the recent pandemic, many companies needed to shift how they operate and those that were already leveraging the cloud and building agility in their systems and processes were ready to respond to the rapidly changing business challenges they faced.

Empowering 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.

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.

Reinvention in the midst of disruption

Every company has aspired to become a technology company but research shows that most organisations are still a long way from thinking and operating with technology at the heart of everything they do.

This kind of reinvention is viewed as disruptive and complex and the cultural and cost hurdles are too great. Even as nimbler, digital native competitors sprung up around them, established players have had the luxury of time to slow-walk large-scale change.

The pandemic forced companies to compress years of transformation into months, and those that embraced large-scale change before the crisis have shown greater business resilience with the ability to adapt and outmanoeuvre uncertainty. They’re now well positioned to emerge stronger.

By adopting a Living Systems approach, any company can achieve similar benefits without additional investment or disruption. There has never been a more crucial moment to discover the sustainable success that comes from Living Systems.


 




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