Startups are lean, agile and at the forefront of innovation. In contrast, established enterprises tend to be slow and ungainly — or at best, fast-followers — unable to drive innovation in the marketplace. That's what "everyone" says. But what if "everyone" is wrong?
"We're seeing large enterprises — armed with the resources, scale and drive to reinvent themselves through digital transformation—reasserting leadership in their markets," says Paul Daugherty, chief technology officer of multinational management consulting, technology services and outsourcing firm Accenture.
"Leading companies are adopting digital to drive their processes more effectively and transform how they go to market, collaborate with partners, engage with customers and manage transactions," says Daugherty. "Digital is rapidly becoming part of the fabric of their operating DNA and they are poised to become the digital power brokers of tomorrow."
Large Enterprises Are Using Digital Technology to Become Market Disruptors
In its Accenture Technology Vision 2014, Accenture underscores six technology trends that it says are allowing large enterprises to become market disruptors that drive innovation like startups do.
That's not to say startups and other small and midsize companies are going to cease disrupting markets and innovating. Accenture acknowledges you can expect more overnight sensations like Instagram, Twitter and Airbnb, but you can also expect large enterprises to pour their resources and capital into embracing technology disruption and using that muscle to carve out new digital empires.
Accenture points to examples like the global supermarket chain, Tesco, which has created interactive grocery stores in airports and subway stations and expanded its reach into movie streaming, ebooks and tablets.
"The grocery retailer is well on its way to becoming a truly digital business," Accenture states in the report. "More than 20 percent of Tesco's online sales now come through smartphones, and 10 percent of all orders from Tesco Direct come through its mobile website. Over the years, Tesco's leaders—IT leaders included—have moved from experimenting with social media, mobile, cloud computing and analytics toward mastery of those digital domains. They have learned by doing, steadily gaining the skills and the competencies to pull ahead of their competitors and prove to their stakeholders that they have what it takes to excel in the new digital economy."
Other examples include GE, which has embraced machine data and analytics to form the core of what it calls the industrial Internet, and Disney, which is using digital technologies to transform the way visitors use its parks and pay for food and merchandise. Some are even entering whole new markets, like AT&T, which is entering the home security market with its Digital Life service.
Six IT Trends Driving the Digital Power Shift
Accenture identifies six IT trends that it believes are driving this "digital power shift:"
Digital-physical blur.As smart objects, devices and machines come online and collectively form the Internet of Things, they are extending intelligence to the edge—creating a new layer of connected intelligence that augments employees, automates processes and incorporates machines into human lives.
Accenture says this trend empowers consumers and gives organizations real-time, relevant data that allow machines and employees to react faster and more intelligently. Accenture points to the Royal Philips Healthcare division, which is piloting a Google Glass application that gives physicians the ability to monitor a patient's vital signs and react to surgical procedural developments without having to turn away from the patient or procedure.
The rise of the borderless enterprise.Cloud, social and collaboration technologies now allow companies to, in effect, crowdsource their workforce. Your workforce is no longer just your employees, but any willing individual connected to the Internet. Accenture points to companies like MasterCard and Facebook, which use the organization Kaggle to solve some of their toughest problems. Kaggle is a global network of computer scientists, mathematicians and data scientists who compete to solve problems that range from finding the best airline flight to optimizing retail store locations.
The new data supply chain.Data in many large enterprises is siloed and hard to access. But forward-looking enterprises are learning to treat their data like a supply chain, allowing data to easily and usefully flow through their entire organizations and even out into their ecosystems. Accenture cites Google and Walgreens, which have adopted this approach by opening up APIs.
It notes that more than 800,000 websites now use Google Maps data, and third-party developers are able to include the ability to scan barcodes from Walgreens' prescription bottles into their apps to make it easier for users to refill prescriptions.
Harnessing hyperscale.For more than a decade, innovation has largely focused on software. But hardware is coming into its own again as a hotbed of innovation that is making possible bigger, faster, more efficient data centers. Advances in power consumption, processors, solid state memory and infrastructure architectures are giving enterprises the opportunity to massively scale, increase efficiency, drive down costs and enable their systems to perform at higher levels than ever before. Accenture notes that all companies will see cost reductions as a result of hyperscale innovation in the data center. As companies digitize their businesses, they'll go beyond cost reductions and find the new systems enable the next wave of growth.
The shift from applications to apps.Big, complex enterprise software systems will never disappear entirely, but many are being replaced by simpler, more modular apps that offer greater operational agility. Accenture notes that 54 percent of the highest-performing IT teams have already deployed enterprise app stores.
As this trend continues, it will force a reassessment of the relationship between IT leaders and business leaders as they come to grips with who is going to play what role in app development. Accenture says you can also expect a transformation in the app development process itself as apps require regular software iterations to take advantage of new technologies and accelerate business growth.
Built to survive failure.Architected resilience is becoming the name of the game as business processes, services and systems must support the nonstop demands of employees and stakeholders in the digital era. This is putting ever-greater pressure on the CIO because the value of the brand depends upon "always on" IT infrastructure, security and business processes. It requires designing systems for failure using modular technologies and advanced testing processes. Accenture points to companies like Netflix, which uses automated testing tools to deliberately attack its systems to increase resiliency.
"These key trends build on those we have seen over the past couple of years," Daugherty says. "Last year, we declared that every business is a digital business, whether its leaders acknowledged that or not. Now, we see that digital technologies run through every facet of the highest-performing businesses. Looking at the shifts in technology and the impact they're having on the strategies and operational priorities of organizations around the world, we believe there are tremendous opportunities for every C-suite executive to be a digital disruptor—to reinvent and redefine their business to create lasting competitive advantage."
Thor Olavsrud covers IT Security, Big Data, Open Source, Microsoft Tools and Servers for CIO.com. Follow Thor on Twitter @ThorOlavsrud. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn.