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February 26, 2018

Disruption can be predicted & prevented, says Accenture

Disruption is happening now, quicker than ever but Accenture suggests more can be done to prepare for the inevitable.

By April Slattery

Almost two thirds of large companies around the world face high levels of industry disruption, a new survey from Accenture has revealed.

A new study from Accenture has found that industry disruption is already a reality for most large companies around the world. Accenture’s study revealed that instead of disruption being a random, unpredictable event for businesses it does in fact have a pattern that can be identified, understood and prepared for.

The report focused on two aspects: the current level of disruption and businesses vulnerability to future disruption. Accenture found that almost two thirds (63%) of companies face high levels of disruption now, with 44% showing severe signs of vulnerability to future disruption.

Part of the research Accenture carried out included a ‘disruptability index’, which looks at the different elements of disruption and what can be done to overcome it. Researchers explored the presence and market penetration of disruptor companies as well as incumbents’ financial performance, operational efficiency, commitment to innovation and defences against attack.

The index outlines there are four different components of disruption. The first two components were durability and vulnerability, which 19% of organizations fell into. Thirdly Accenture noted volatility, which affects a quarter of companies and finally viability is affecting 37% of businesses.

“Disruption is continual and inevitable — but it’s also predictable,” Omar Abbosh, Accenture’s chief strategy officer said. “Business leaders need to determine where their company is positioned in this disruption landscape and the likely speed of change. The more clearly they see what’s changing around them, the better they can predict and identify opportunities to create value from innovation for their business and rotate to the ‘new’.”

Disruption can be predicted & prevented, says Accenture

Accenture has explained ways to prevent disruption.

Business leaders can use the index to understand where their industry is positioned and why, whilst allowing them to identify risks and opportunities for future plans. Within the index, Accenture outlined strategic responses businesses can take for each component of disruption.

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Those businesses in the durability state must reinvent the business legacy, taking steps to maintaining cost leadership and make business offerings more relevant to customers. Businesses falling under the vulnerability component of disruption, the best strategic response would be to make businesses more productive and put them in a positive position to develop innovative processes.

Businesses in the volatility state must change the current plan they are on, to transform the core of the business alongside scaling up new businesses. Finally, viability state businesses much embrace the constant need for innovation and increase the efforts to develop innovative solutions with existing businesses.

“To not only survive disruption but thrive when it strikes requires companies to transform and grow their core business while simultaneously innovating to create and scale new businesses,” said Mike Sutcliff, group chief executive of Accenture Digital.

“Embracing digital is crucial part of it. Digital technologies can help make a company more resilient in times of disruption in a number of ways, whether by driving better outcomes from existing products, developing entirely new digital services, lowering costs, or increasing barriers to entry.”

The study analysed over 3,600 companies across 82 countries. Accenture will be presenting the index at Mobile World Congress and can be found in Hall 2.

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