6 characteristics of future-ready businesses

Accenture did a study to find out if businesses were ready for the future, and most of them were not. Here's how to change that.

Study: Only 7% of companies are future-ready

TechRepublic's Karen Roby spoke with Manish Sharma, group chief executive for Accenture operations, about Accenture's recent study of future-ready organizations. The following is an edited transcript of their conversation. 

Karen Roby: You released a report, some really interesting numbers and some facts in here about companies and who is really ready for the future, who is moving forward. Manish can you just start with the overall theme of the study and what you were really looking to achieve.

SEE: Digital transformation: A CXO's guide (free PDF) (TechRepublic)

Manish Sharma: I think for us, we are always trying to figure out, what are the things that work and make organizations' performance in the top quarter? And we are always looking for nuggets out there. So we went to across a number of companies to determine that. And we also wanted to find out, "How did they handle the pandemic?" "How did they handle the different situations and the different demands, whether it is our customer, whether it is all the employees of the vendors?" So, we thought we will do an extensive study across many of the companies to find out the characteristics, what makes them work? How many of them are future-ready, and what are the characteristics which make them future-ready? And I think that was the focus for us.

Karen Roby: When you talk about future-ready Manish, what would have made a company a year and a half ago future-ready versus now? It's changed slightly because we have lived through a year of a pandemic now and we have had to change how our workforce is distributed, how they work from home in some cases, so many things have changed.

Manish Sharma: Absolutely. I would also say it shows the resiliency of the companies that are successful. It shows the flexibility of the companies that are successful. And there are some characteristics which I would describe as we go through which really ensured that we are moving forward, even in the tough times. I think it was exciting to kind of just see that.

Karen Roby: Go ahead and go through some of those. What sticks out to you? What can you highlight as far as what makes a company more likely to be ready to move into the future versus others?

Manish Sharma: I would say for me, that was the defining part of this. What we found was, very crisply, six distinguishing characteristics into practice when compared to everybody else. First, think big and go beyond implementable improvements. Business leaders that start with the end goal in mind and consider the bold moves it would take to close the digital transformation gap. That is one. Second one is, pick a cloud-first approach to explore new areas to scale and maximize value. Our research shows that 90% of the future-ready organizations take this approach versus 76% of all the other organizations. That's the second one. Third one: Enhance decisions with better, more diverse data. We saw 45% of the future-ready organizations do compare to 6% of the other organizations. That is the third one. Fourth one is scale automation, artificial intelligence and integrated solutions with leading practices. We are seeing 58% of the future-ready are doing this versus only 6% of all the others. Fifth: Foster a specialized, agile workforce. That is the need, and augment them with technology. It is clear that is what differentiates all these companies. And the last one is the sixth one: Building complimentary ecosystem relationships that will bring complementary skill sets and more diverse data together. And we found this across all the future-ready organizations do these six themes across.

Karen Roby: That is really interesting. We could talk for hours about each different one and what goes into it, but when you talk about closing that gap with digital transformation and where companies are, are more of them where you thought that they would be or should be at this point in 2021, or do we still have a lot of them that are back further than where they should be?

Manish Sharma: OK. So you have hit upon an aspect of the report, which actually surprised me immensely. Somehow you have hit that point now, but I think the key thing which we found was that only 7% of the companies were future-ready. Only 7%.

Now, why is that surprising? These 7% of the organizations, even in the pandemic, performed at least twice as well as their peers, achieving three times the profitability and double the efficiency. While most businesses were unprepared for the impact of COVID-19, a strong digital foundation helped them mitigate that risk and pivot quickly to keep their businesses running at pace. What this also states is the remaining 93% are leaving money on the table and some businesses see digital transformation as a destination, but really it is an ongoing process that allows businesses to adjust to changing market conditions quickly while also seamlessly working with cross-functional teams. And I think that is the thing. And let me give you one last stat which will surprise you more. Today 7% of the companies have three times more profitability versus peers. If we were to broadly apply this across in global economic value, there is $5.4 trillion which are available on the table if the companies really deploy all the six aspects that I mentioned to you.

SEE:  AI on the high seas: Digital transformation is revolutionizing global shipping (free PDF) (TechRepublic)

Karen Roby: Those are significant numbers there, Manish.

Manish Sharma: Big numbers. So for me, that was the most surprising part as I looked into some of the findings from this report.

Karen Roby: When you talk about the technology and what they need to embrace, expand a little bit more on that. I know we talked about AI and moving forward with those types of processes and automation and putting that into place, expand a little bit on that for me.

Manish Sharma: I think in our experience, there are three technologies which deliver the greatest value. First one is cloud. Second one is automation. And the third one is artificial intelligence. And I will elaborate for a few minutes on each of them. 

The cloud is an excellent place for the C-level leaders to start and advance digital transformation efforts because that can make small-scale changes and build upon early successes. Moving workloads into the cloud really helps reduce costs, achieve agile scalability and accelerate innovation. We expect cloud maturity to reach 80% over the next few years. That was one. Second one is automation. Business leaders are looking to make their operations more resilient by enabling systems to sense and respond to risks. Many still rely heavily on manual processes. These error-prone approaches can increase risk and adversity and adversely affect employee morale.

Automation reduces errors and augments human ingenuity for better outcomes. We expect automation maturity to grow over eightfold from 5% to 44% by 2023. Third one—artificial intelligence. In a world where distributed workforce models are becoming the norm, artificial intelligence can help leadership put people at the center of operations and bind the organizations together. Today, only 5% have scaled artificial intelligence practices across the organization, crucial for advancing maturity and achieving a huge impact.

Karen Roby: When we talk about the workforce and the people that companies are employing now and the jobs that are there and new jobs that have been created, talk a little bit more about the people end of this. How is staffing going to change or has it changed or what do they need to do to be more future ready in that aspect?

SEE: AI in the OR: One company is closing the gaps in surgery using technology (TechRepublic)

Manish Sharma: Let me talk about the definition and I want to give some concrete examples of some of the jobs that are being created. First of all, what we have seen is that the future-ready leaders understand one thing above everything else. It is about maximizing talent in an era where people are critical to success. That means that aim is about emphasizing the human skills that distinguish us from machines. And as companies' operational maturity advances. New expectations will be set for what is possible and new performance standards and needs. And this progression will automate more transactional tasks and extract more value out of data. As this happens, future-ready leaders will see that talent, blueprint expand and stripped into equal parts. Whatever current workforce that you have; you will have one-third of specialists, one-third robotic solutions and one-third folks who are doing transactional work, but that is the shift of the pyramid.

You asked what kind of jobs I see. Like now, I see an explosion of jobs happening. And for me, there are five different categories. First one, business advisor's job, which is, for example, finding how to reduce inventory and optimize working capital. That is one. Second one is tech advisers, which is the automation engineers—huge expansion on that one. Third, industry and functional experts who can account for ways of working areas of expertise and how best to transform and adapt. The fourth one is data scientists who analyze the data and structure it so that the value can be extracted because only 1% of the data is being used right now. We can actually have significant untapped potential in the data scientist area. 

The last one is tech engineers. Tech engineers across artificial intelligence, cloud and security, who can continually scale and advance maturity of artificial intelligence, cloud and security. For example, artificial intelligence engineers working with data scientists to create an algorithm to predict which vendor will pay and when. We have to see automation as an enabler, not a threat if you want to succeed. You do that by making people part of the process, incentivizing progress and rewarding ideas that align with the future again.

SEE: Analytics: Turning big data science into business strategy (ZDNet/TechRepublic special feature) | Download the free PDF version (TechRepublic)

Karen Roby: Manish, when you look at this report as a whole...and I like your enthusiasm about it because it seems to me that you and I are optimistic about the future of companies and who is going to move forward. Why is it promising or is it possible to say that it will be promising that how many companies will be moving forward? Or is it a little bit scary? How do you feel about it in general?

Manish Sharma: I feel that it is a huge opportunity. I feel that there is immense potential in each of those companies, and the biggest thing is unleashing the human potential that exists. And we are drowning them by giving them some mundane tasks. I think if you are eliminating some of these mundane, boring jobs and giving human beings the real value added, where you require human judgment, critical skills, critical thinking, that is where the biggest potential is. When I look at some of the examples of some of the leaders that are able to apply these lessons during the pandemic, we can actually copy them and adopt them. Let me give you some examples. We helped a major grocery chain reduce inventory by 30% using AI-powered insights to help them get more precise forecasts and locate to stores with more accuracy in some cases, up to eight weeks in advance.

In my own business, when many exporters shut down or at the onset of pandemic, we developed an artificial intelligence tool that scrapes the web to find alternative suppliers that might be able to step with missing materials or components as part of the synopsis platform that we have. A telecommunication company improved chat forecasting and reduced manual chat analysis by 90. This significantly improved customer satisfaction, resulted in almost 65 million in additional value from digitized processes, specialized talent and AI assets. When you kind of see some of those things, it fills me with hope, feels to me what an amazing opportunity lies in front of us, what an amazing opportunity for people to really do value-added pieces of work.

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TechRepublic's Karen Roby spoke with Manish Sharma, group chief executive for Accenture operations, about Accenture's recent study of future-ready organizations.

Image: Mackenzie Burke