|By Business Wire||
|January 21, 2014 06:01 PM EST||
As the global economy continues to recover, a majority of companies intend to pursue growth opportunities outside their own industry sectors as digital technologies help create new higher growth markets, according to new research by Accenture (NYSE:ACN). The research also shows that most top executives believe the ability of new digital technologies to dissolve industry boundaries is the most important structural shift businesses will face over the next five years.
The report, “Remaking Customer Markets: Unlocking Growth with Digital,” includes a survey of 500 C- level executives in 10 countries, which reveals that while 64 percent say their companies will continue to focus on growth within their current industry, 60 percent plan to pursue growth in, or in collaboration with, other industries in the next five years. The report examines six ‘digitally contestable markets’ in which established and new players from multiple sectors are using digital technology to reshape traditional industries and create higher rates of growth: Healthcare, education, financial services, manufacturing, retail and transportation. Among the findings:
- While the core healthcare sector in the United States is expected to grow at 2.5 percent annually between 2012 and 2018, the impact of digital technology (e.g. remote diagnostics, electronic records management) will help drive annual growth of 3.3 percent in the broader market for staying healthy.
- The UK’s core financial services sector is projected to grow at 2.0 percent per year between 2012 and 2018, but the wider digitally contested ‘paying’ market will experience annual growth of 2.9 percent, thanks to digitally enabled trends such as crowd funding, peer-to-peer lending services and virtual wallet applications.
- Germany’s retail sector is expected to grow 1.6 percent annually between 2012 and 2018, but the wider digitally contestable ‘shopping’ market will enjoy growth of 2.6 percent per year, due to trends such as real-time pricing, e-commerce platforms that enable consumers to become retailers and online sharing and bartering services.
According to the report, the aggregate value of three digitally contestable markets in 2018, alone – shopping, paying and staying healthy – will be US$5.9 trillion to the U.S. economy, €747 billion to the German economy and GBP£519 billion to the economy of the UK.
Despite recognizing the fundamental shifts taking place within their own industries, only 38 percent of the executives surveyed said that these shifts would be the primary driver of their company’s strategy, while 60 percent said their strategy will be influenced most by broader economic conditions.
“Digital technology has been with us for years but is now dramatically disrupting and reshaping traditional industry sectors,” said Mike Sutcliff, group chief executive – Accenture Digital, which offers solutions and services across digital marketing, mobility and analytics to help companies unleash the power of digital to drive growth. “Although companies recognize the potential of digital transformation, many are not yet aligning their growth strategies accordingly. Revenue growth will increasingly depend on their ability to embrace digital business models to redefine their own sectors, transform the way they operate and create entirely new products and services.”
Working with new partners
The report also reveals how companies plan to participate in digitally contestable markets in the next five years. Collaboration, rather than acquisition, is the preference, according to the research. Of those companies seeking growth beyond their current sector, 63 percent will create strategic alliances and 46 percent will enter into joint ventures. Only 39 percent plan to expand into non-traditional industry sectors through mergers and acquisitions.
Asked what capabilities will be needed for success, executives surveyed pointed to a blend of digital and “analog” requirements. Digital technologies were identified as critical enablers, including data analytics (cited by 50 percent of respondents), mobile computing and/or app development (48 percent) and social media (46 percent). But, consistent with the need for greater collaboration, the most important enabler identified by business leaders is in fact personal relationships and networks, cited by 58 percent of executives.
The report shows that there is a gap between companies’ intentions and their readiness to pursue new business models, however. Among survey respondents who classified their companies as being above-average performers, 80 percent said their businesses were well positioned to understand trends outside their traditional industry, compared to just 52 percent of respondents representing low-performing companies. Additionally, 84 percent of respondents from self-classified high-performing companies said they were well positioned to collaborate with outside entities to grow in non-traditional business sectors, compared to only 39 percent of low performers.
“Customers’ experiences increasingly rely on services jointly provided by companies from multiple sectors as banks, retailers and travel companies work together, for instance,” said Mark Spelman, managing director, Accenture, and co-author of the report. “Incumbents must be open to entirely new ventures and partnerships that disrupt their existing business in order to secure future growth. And while sharing data and deploying mobile or analytics technologies is important, companies must develop new capabilities and more flexible strategies to form those more open and collaborative networks that are at the heart of digitally contestable markets.”
Steps to success
According to the report, companies that hope to expand into digitally contestable markets and achieve competitive success must master three key capabilities:
- Use Digital to Anticipate Customers’ Needs: For example, a leading British luxury retailer uses a data system that makes customer histories available as soon as those customers enter the store, allowing shop assistants to offer a more relevant and individual service.
- Be Prepared to Take on Different Roles with Partners: For example, a Spanish telecoms provider entered new markets by working with a leading bank to support e-wallet and peer-to-peer payment apps and with an Italian insurance company to provide “pay-as-I-drive” car insurance services.
- Use Digital to Speed up Decision Making and Product Development. For example, a U.S. yacht manufacturer partnered with a software company to prototype its designs through 3D printing, enabling it to make modifications up to 40 times faster.
“In digitally contestable markets, customers care less and less about which company or sector provides services, as long as those services meet their needs,” said Mark Spelman. “That creates commercial threats and opportunities, of course. Policy makers and regulators also need to respond to the blurring of industry boundaries if they are to keep up with customer demands and if they are to ensure regulation supports rather than restricts dynamic new forms of economic growth.”
View the full report at accenture.com/customermarkets.
Accenture is a global management consulting, technology services and outsourcing company, with approximately 281,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.
SoftLayer operates a global cloud infrastructure platform built for Internet scale. With a global footprint of data centers and network points of presence, SoftLayer provides infrastructure as a service to leading-edge customers ranging from Web startups to global enterprises. SoftLayer's modular architecture, full-featured API, and sophisticated automation provide unparalleled performance and control. Its flexible unified platform seamlessly spans physical and virtual devices linked via a world...
May. 26, 2016 10:15 PM EDT Reads: 2,027
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
May. 26, 2016 10:00 PM EDT Reads: 1,880
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
May. 26, 2016 10:00 PM EDT Reads: 2,535
SYS-CON Events announced today that AppNeta, the leader in performance insight for business-critical web applications, will exhibit and present at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. AppNeta is the only application performance monitoring (APM) company to provide solutions for all applications – applications you develop internally, business-critical SaaS applications you use and the networks that deli...
May. 26, 2016 09:45 PM EDT Reads: 2,338
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
May. 26, 2016 09:30 PM EDT Reads: 2,999
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
May. 26, 2016 09:15 PM EDT Reads: 1,852
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will exhibit at the 18th International CloudExpo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
May. 26, 2016 09:15 PM EDT Reads: 2,238
In his session at 18th Cloud Expo, Bruce Swann, Senior Product Marketing Manager at Adobe, will discuss how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects). Bruce Swann has more than 15 years of experience working with digital marketing disciplines like web analytics, social med...
May. 26, 2016 09:00 PM EDT Reads: 1,258
Designing IoT applications is complex, but deploying them in a scalable fashion is even more complex. A scalable, API first IaaS cloud is a good start, but in order to understand the various components specific to deploying IoT applications, one needs to understand the architecture of these applications and figure out how to scale these components independently. In his session at @ThingsExpo, Nara Rajagopalan is CEO of Accelerite, will discuss the fundamental architecture of IoT applications, ...
May. 26, 2016 08:45 PM EDT Reads: 1,120
18th Cloud Expo, taking place June 7-9, 2016, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some...
May. 26, 2016 08:45 PM EDT Reads: 3,079
As cloud and storage projections continue to rise, the number of organizations moving to the cloud is escalating and it is clear cloud storage is here to stay. However, is it secure? Data is the lifeblood for government entities, countries, cloud service providers and enterprises alike and losing or exposing that data can have disastrous results. There are new concepts for data storage on the horizon that will deliver secure solutions for storing and moving sensitive data around the world. ...
May. 26, 2016 08:00 PM EDT Reads: 1,226
In the rush to compete in the digital age, a successful digital transformation is essential, but many organizations are setting themselves up for failure. There’s a common misconception that the process is just about technology, but it’s not. It’s about your business. It shouldn’t be treated as an isolated IT project; it should be driven by business needs with the committed involvement of a range of stakeholders.
May. 26, 2016 08:00 PM EDT Reads: 2,321
SYS-CON Events announced today that EastBanc Technologies will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. EastBanc Technologies has been working at the frontier of technology since 1999. Today, the firm provides full-lifecycle software development delivering flexible technology solutions that seamlessly integrate with existing systems – whether on premise or cloud. EastBanc Technologies partners with p...
May. 26, 2016 08:00 PM EDT Reads: 2,113
SYS-CON Events announced today that BMC Software has been named "Siver Sponsor" of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. BMC is a global leader in innovative software solutions that help businesses transform into digital enterprises for the ultimate competitive advantage. BMC Digital Enterprise Management is a set of innovative IT solutions designed to make digital business fast, seamless, and optimized from mainframe to mo...
May. 26, 2016 08:00 PM EDT Reads: 2,063
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
May. 26, 2016 08:00 PM EDT Reads: 2,301