Click here to close now.




















Welcome!

News Feed Item

Companies Pursue Cross Sector Growth as Digital Technologies Dissolve Traditional Industry Boundaries, Accenture Research Finds

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.

About Accenture

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.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Arch...
For IoT to grow as quickly as analyst firms’ project, a lot is going to fall on developers to quickly bring applications to market. But the lack of a standard development platform threatens to slow growth and make application development more time consuming and costly, much like we’ve seen in the mobile space. In his session at @ThingsExpo, Mike Weiner, Product Manager of the Omega DevCloud with KORE Telematics Inc., discussed the evolving requirements for developers as IoT matures and conducte...
Providing the needed data for application development and testing is a huge headache for most organizations. The problems are often the same across companies - speed, quality, cost, and control. Provisioning data can take days or weeks, every time a refresh is required. Using dummy data leads to quality problems. Creating physical copies of large data sets and sending them to distributed teams of developers eats up expensive storage and bandwidth resources. And, all of these copies proliferating...
Malicious agents are moving faster than the speed of business. Even more worrisome, most companies are relying on legacy approaches to security that are no longer capable of meeting current threats. In the modern cloud, threat diversity is rapidly expanding, necessitating more sophisticated security protocols than those used in the past or in desktop environments. Yet companies are falling for cloud security myths that were truths at one time but have evolved out of existence.
Digital Transformation is the ultimate goal of cloud computing and related initiatives. The phrase is certainly not a precise one, and as subject to hand-waving and distortion as any high-falutin' terminology in the world of information technology. Yet it is an excellent choice of words to describe what enterprise IT—and by extension, organizations in general—should be working to achieve. Digital Transformation means: handling all the data types being found and created in the organizat...
Public Cloud IaaS started its life in the developer and startup communities and has grown rapidly to a $20B+ industry, but it still pales in comparison to how much is spent worldwide on IT: $3.6 trillion. In fact, there are 8.6 million data centers worldwide, the reality is many small and medium sized business have server closets and colocation footprints filled with servers and storage gear. While on-premise environment virtualization may have peaked at 75%, the Public Cloud has lagged in adop...
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
The time is ripe for high speed resilient software defined storage solutions with unlimited scalability. ISS has been working with the leading open source projects and developed a commercial high performance solution that is able to grow forever without performance limitations. In his session at Cloud Expo, Alex Gorbachev, President of Intelligent Systems Services Inc., shared foundation principles of Ceph architecture, as well as the design to deliver this storage to traditional SAN storage co...
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
MuleSoft has announced the findings of its 2015 Connectivity Benchmark Report on the adoption and business impact of APIs. The findings suggest traditional businesses are quickly evolving into "composable enterprises" built out of hundreds of connected software services, applications and devices. Most are embracing the Internet of Things (IoT) and microservices technologies like Docker. A majority are integrating wearables, like smart watches, and more than half plan to generate revenue with ...
The Internet of Everything (IoE) brings together people, process, data and things to make networked connections more relevant and valuable than ever before – transforming information into knowledge and knowledge into wisdom. IoE creates new capabilities, richer experiences, and unprecedented opportunities to improve business and government operations, decision making and mission support capabilities.
The Cloud industry has moved from being more than just being able to provide infrastructure and management services on the Cloud. Enter a new era of Cloud computing where monetization’s services through the Cloud are an essential piece of strategy to feed your organizations bottom-line, your revenue and Profitability. In their session at 16th Cloud Expo, Ermanno Bonifazi, CEO & Founder of Solgenia, and Ian Khan, Global Strategic Positioning & Brand Manager at Solgenia, discussed how to easily o...
In their session at 17th Cloud Expo, Hal Schwartz, CEO of Secure Infrastructure & Services (SIAS), and Chuck Paolillo, CTO of Secure Infrastructure & Services (SIAS), provide a study of cloud adoption trends and the power and flexibility of IBM Power and Pureflex cloud solutions. In his role as CEO of Secure Infrastructure & Services (SIAS), Hal Schwartz provides leadership and direction for the company.
Rapid innovation, changing business landscapes, and new IT demands force businesses to make changes quickly. The DevOps approach is a way to increase business agility through collaboration, communication, and integration across different teams in the IT organization. In his session at DevOps Summit, Chris Van Tuin, Chief Technologist for the Western US at Red Hat, will discuss: The acceleration of application delivery for the business with DevOps
The speed of software changes in growing and large scale rapid-paced DevOps environments presents a challenge for continuous testing. Many organizations struggle to get this right. Practices that work for small scale continuous testing may not be sufficient as the requirements grow. In his session at DevOps Summit, Marc Hornbeek, Sr. Solutions Architect of DevOps continuous test solutions at Spirent Communications, explained the best practices of continuous testing at high scale, which is rele...