Reinventing Enterprise Operations
How optimizing operations can help to access a new performance frontier
Reinventing Enterprise Operations How optimizing operations can help to access a new performance frontier From insights to action, the path to extraordinary value starts here.
Foreword Disruption has become a way of life. we’ve researched and discussed with using strategic managed services. The Accenture Global Disruption Index clients for more than a decade. These services are an effective and estimates macroeconomic volatility efficient way to drive holistic value has increased 200% since 2017, More organizations than ever are and achieve talent at scale, business compared with only 4% from 2011 to reaching higher levels of operations and industry expertise and access to 1 2016. It’s putting pressure on every maturity and accessing new levels of leading technology. organization to transform, fast and performance today compared with frequently, to keep pace with three years ago. But the gap is This report aims to offer your market expectations. widening between this growing group organization ways to reinvent of “operations reinventors” and those operations—with the right technology, But accelerating broad and bold who have deferred investing in insights, data, people and partners. transformation programs isn’t an end optimizing operations. game. Organizations should reinvent every area of their enterprise over time, Finding a way to go beyond functional ations continually, to better manage change. operational benefits to access a new performance frontier is possible. How can you get started? We believe Some organizations that seek to Yusuf Tayob that high levels of operations maturity digitize faster are putting more can contribute to successful resilience in the business and Group Chief Executive reinvention strategies. It’s a topic capturing new paths for growth by Operations enting Enterprise Oper v ein R 02 1. Total Enterprise Reinvention, Accenture 2023 https://www.accenture.com/us-en/insights/consulting/total-enterprise-reinvention
Contents 08Reinventing operations 13 Five ways to reinvent operations 30 How to access a new performance frontier 15 Seek out 360° value as a North Star 18 Commit to data decisiveness across the enterprise 21 Innovate processes for enhanced performance gains 24 Humanize automation experiences at scale 27 Employ an agile talent strategy ations enting Enterprise Oper v ein R 03
We’re in a period of profound change. Technology, Figure 1 consumer preferences and climate change are driving Total Enterprise Reinvention massive structural shifts in how the world operates. These extraordinary times call for an unprecedented response and a reinvention of the enterprise. Yet, Accenture research finds that only 8% of organizations are moving to Total Enterprise Reinvention (Figure 1). Total Enterprise Reinvention is a deliberate Ser strategy that aims to set a new performance frontier for Mark vice s organizations and, in most cases, the industries in which eting inance ce they operate. F sour Human e e r ltur an Sale cu d p Optimizing operations is an essential step. When s le, urp egal op o L operations are at peak performance, business outcomes e S se O P e Busine I c p can flourish. Our latest research shows that a handful of h u t A r t i ss units t ormation i organizations—we call them operations reinventors—are w y Inf m o technology i already rising to the challenge. r z g e Build e C o ta digital Sour p r w business at core ol cing & e Ne a u pr r e ocur l model D d ement a ec oit cA P S sn s & latforms upply chain ger ations Mer Engineering & acquisitions manuf ate ategy S acturing str functionsspecific Industr ust Corpor ch & ainability ar ese elopment y R v enting Enterprise Oper de v ein R 04
We surveyed 1,700 executives from 1,657 organizations across 15 industries and 12 countries. We assessed organizations across six capability measures of operations maturity. Based on maturity scores for those six capabilities, we plotted organizations across four levels of operational maturity, from least to most mature—foundational, automated, 1 insight-driven and intelligent (Figure 2). Our analysis revealed the actions and investments that were driving organizations to the highest levels of operations maturity. Figure 2 The operations maturity journey Six capability Data, analytics Artificial � Leading � Business-tech Talent� Stakeholder� measures and automation intelligence practices collaboration strategies experiences Intelligent A well-defined data AI deployed in Leading practices IT and business Machines augment Enterprise-wide (operations reinventors) strategy, overlayed on nearly all processes, applied to all business functions partner to human work in nearly stakeholder a centralized, secure redefining processes drive strategic all processes across experience programs and diverse data lake performance roadmap and functions deployed at scale and benchmarks All critical business execution enabled by advanced Insight-driven On-demand operations moved to Equipped with data analytics and analytics, advanced Continual the cloud to enable IT enables the specialized talent user-led automation modelling and data reassessment of agility and to optimize integration of (e.g., data scientists, technologies science AI roadmap cost to serve ecosystem partners AI practitioners, ations Automated (startups, SaaS, AI design thinkers, AI-led continuous Cross enterprise Ecosystem Process mining to platforms) to take product managers) improvement of all deployment of partnerships drive calibrate internal and IT-OT integration to experience programs low-code/no-code AI-led scenario external benchmarks the next level Ecosystem across business units automation for planning for to drive best-in-class partnerships and and geographies Foundational exponential continuous performance external talent efficiency strategic platforms to improve reinvention talent capabilities and agility enting Enterprise Oper v ein R Source: Accenture operations maturity survey, 2023 05 1. Identified in the 2021 report as stable, efficient, predictive and future-ready
By balancing six capability measures of Our operations reinventors also create greater 360° value*: operations maturity, organizations can accelerate the move to reinvention and enable growth for the whole enterprise. We find that some organizations are leading 1.4x 2.2x 42% 34% the way, while others have stalled in the early stages of their journey. higher operating greater total better at agile product better at reducing energy (EBIT) margins shareholder return and process innovation consumption and 9% 18% (three-year) greenhouse gas emissions of organizations of organizations have a unique remain in the ability to reinvent lowest levels of enterprise maturity with We used econometric operations and limited modeling to analyze the drive 360° value (up incremental 30% 25% 19% organizations we surveyed from 7% in 2021) optimization on 22 different publicly reported performance indicators. The results show ations that operations reinventors better at driving better at providing better at driving talent are creating substantially customer engagement equal opportunities to management programs higher 360° value than while ensuring women and minorities that ensure better organizations at the customer data privacy in the workforce employee engagement insight-driven level. enting Enterprise Oper v ein *See glossary for full definition R 06
Enablers to reinvent operations: • Scale capabilities using a strong digital core by making the right investments in the six capability measures to generate 360° value—looking beyond financials to long-term, sustainable value for all stakeholders across the enterprise. • Choose the right strategic partners who can enable wider access to specialized talent, industry expertise and leading automation platforms to help deliver continuous reinvention, customized to an organization’s needs. This report offers insights into how organizations lagging in operations maturity today can quickly adopt the capabilities that can enable them to access a new performance frontier. ations enting Enterprise Oper v ein R 07
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Reinventing operations ations enting Enterprise Oper v ein R 08
Reinventing operations Unprecedented changes in the business vironment have redefined traditional en performance benchmarks. Prompted by economic and geopolitical factors, organizations are compressing transformation cycles and accelerating their paths to operations maturity. Our research shows that 9% of our surveyed organizations reached the intelligent level of operations maturity (up from just 7% in 2021), despite a dramatic shift in performance benchmarks. Yet, some organizations are finding it hard to remain competitive and drive breakthrough improvements in operations maturity. Organizations at Foundational and Automated levels struggle to successfully deploy the six capability measures of operations maturity across enterprise functions. ations enting Enterprise Oper v ein R 09
Reinventing operations In our 2021 research, we found that one size processes), while only 11% scaled other leading does not fit all—and the same holds true today. industry practices, such as process mining and benchmarking. Operations maturity is far from being a sequential or linear journey. Investments to Operations maturity depends on integrating boost operations maturity are often influenced all six capability measures of operations by pressing business priorities. maturity. Individual maturities are dependent on each other, so when all six capabilities are How each organization reaches operations applied in an integrated manner, organizations maturity milestones is unique. In response to can double the chances of reaching the highest the pandemic, 21% of organizations adopted stage of operations maturity. Similarly, fall short agile talent strategies at scale (where machines on optimizing one of the six and the ability to augment specialized human talent in nearly all scale value is threatened. Apply the six capability measures in an integrated manner and the probability of moving up maturity levels increases 14.2X more than 14 times. Source: The Value Multiplier | Accenture ations Failure to apply talent strategies appropriately in combination with data, analytics and technology (such as -7% automation and AI) and the top-line productivity premium drops from 11% to just 4%. Source: The CHRO as a Growth Executive | Accenture enting Enterprise Oper v Organizations seeking to reinvent enterprise operations should strive to drive greater maturity across ein all six capabilities of operations maturity. R 10
Reinventing operations Choosing capabilities Figure 3 Top five digital technologies prioritized for future growth Our research responses show that simply investing more in digital technologies does not guarantee 76% 76% 78% higher operations maturity. Operations reinventors understand that value is best accessed by taking a more balanced approach to their 67% investments in digital technologies. 64% They are distinctly better than their 60% peers at diversifying their investments 57% across some of the elements of the 55% 52% digital core: AI, cloud, automation and 48% 51% 48% 51% 48% cybersecurity (Figure 3). 47% 46% 45% 42% 43% 40% ations Artificial Platform Internet Cloud-based Cybersecurity intelligence modernization of Things SaaS enting Enterprise Oper Intelligent Insight-driven Automated Foundational v ein Source: Accenture operations maturity survey, 2023 R 11
Reinventing operations But that’s not all. Operations reinventors are more proficient at building digital capabilities that solve business challenges. For the others, there’s a considerable mismatch between digital capabilities and key business challenges (Figure 4). Figure 4 Business challenges and how they are being met by digital capabilities Digit Insight-driven organizations identified Only 19% of organizations difficulty in using technology as a prioritized cloud-based vs. 42% al capabiltie differentiator by modernizing legacy platforms and infrastructure of operations systems and re-platforming at scale modernization as one of their reinventors as top business challenge top three digital investments ss challenge s being prioritiz asing maturity e Foundational and automated Only 2-3% of organizations have Incr op busineorganizations identified creating a leveraged business-technology 90% T well-defined operations and technology collaboration at scale to drive vs. of operations roadmap to execute the business innovation, growth and strategic reinventors ations strategy as top business challenge transformation initiatives ed enting Enterprise Oper v ein Source: Accenture operations maturity survey, 2023 R 12
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Five ways to reinvent operations ations enting Enterprise Oper v ein R 13
Five ways to reinvent operations In a highly competitive and constantly changing landscape, organizations are looking for the fastest path to the greatest value. When operations organizations' are at peak maturity, they outperform the rest. We're seeing five actions that operations reinventors take to advance operations maturity and access a new performance frontier: ations enting Enterprise Oper Our featured case studies illustrate the different ways that leading organizations v ein are approaching these five actions today. R 14
Five ways to reinvent operations 01 Seek out 360° value as a North Star Organizations are reexamining major sustainability issues through a new lens that combines physical sciences and digital technologies. They are looking for new ways to engage with customers across channels—in person, online and even in the metaverse. To do so requires a fresh approach to accessing talent and realizing the full creative potential of their people, all while committing to inclusion and diversity and sustainability goals. ations Juggling these demands means keeping the big picture in mind—and looking at value beyond financial measures—from a 360° perspective (Figure 5). enting Enterprise Oper v ein R 15
Five ways to reinvent operations Figure 5 They make use of AI-powered models (such as simulations or Relative importance of scaling digital capabilities predictions) to constantly recalibrate their operations with an within each 360° value dimension, to accelerate accent on business outcomes. “Everything in this globally operations maturity Embracing an attitude of holistic value creation at the outset integrated economy has an creates operations maturity momentum—irrespective of an impact on everything else. Digital capability development organization's current level of operations maturity. That's why, if somebody can Financial 16% build an accurate tool to help Figure 6 us measure all those Experience 19% “We implement processes and platforms to track environmental, social and greenhouse gas emissions, waste disposal and Sustainability 19% resource circularity across functions and locations corporate governance (ESG) relative to less mature counterparts.” intricacies and assess the Inclusion 13% impact our operations have Operations Foundational Talent 17% reinventors across stakeholders, that would be very compelling.” Innovation 16% See Appendix: Machine learning analysis for more details. 60% 30% ations Chief Finance Officer, US investment bank Operations reinventors not only apply the six capability measures of operations maturity differently, but also are far better at seeking out 360° value as their North Star. Source: Accenture operations maturity survey, 2023 They look at value creation holistically, building it from the enting Enterprise Operground up by using data-driven insights from customers, v employees and other ecosystem partners. ein R 16
Five ways to reinvent operations Case study Volkswagen steers German automotive company Volkswagen has Further, benefits could include more efficient launched a digital transformation initiative materials management, optimized machinery toward new value across its United States and Mexico assembly and systems operations and increased savings plants to make its factories more productive, in energy consumption for manufacturing- through digital connected and sustainable. Volkswagen is related processes. Volkswagen’s industrial cloud transformation investing nearly $1 billion up to 2025 in electric can host software applications to reduce mobility and digitization in North America. machine downtime and support predictive The effort involves introducing technologies like maintenance technologies. Cameras with cloud-based industrial software, intelligent machine vision can aid in quality checking robotics and AI to modernize and increase engine components. Collaborative robots manufacturing performance by 30%. support its workforce by performing final inspection checks, inspecting welding patterns This digital transformation effort also and measuring for gap precision in less than a supports skilled labor and prepares minute. An in-house AI tool reduces supervisors’ workers for high-profile jobs for the time spent on planning factory schedules, future. Software, robotics and AI training inputs and employees’ time off. Already, the company says it has seen tangible results ations could enable Volkswagen to optimize i collaboration and enhance the overall and there’s a promise of more value to come. assembly process and workplace environment. enting Enterprise Oper v ein R 17
Five ways to reinvent operations 02 Commit to data decisiveness across the enterprise Supply and demand for data among all enterprise stakeholders is dramatically increasing. Yet, even with investment in leading data architectures, organizations may fail to validate, index and organize data with precision. Organizations should start building their way out of this data deluge to turn data transparency into trusted insights. Operations reinventors are familiar with the many ways ations in which data is collated, processed and made available across the enterprise. They respect that different teams use a variety of tools to analyze the same data in different ways to support their own outcomes. enting Enterprise Oper v ein R 18
Five ways to reinvent operations Operations reinventors establish a culture that encourages debate around which data to use, where to use it and how to use it. But they do so within the guardrails of a clear strategy that governs how data is created, collected, connected and enriched. “You can't just bring in your The strategy helps remove biases and helps them make insight-driven decisions that own data from your own are predictive yet prudent, more quickly and decisively. 2 sources to make your own Reinvention can only happen when leaders break free of their silos —not only to find argument, and then spend new ways to work together, but also to explore new avenues for using data and technology to lead broader change. weeks arguing why one data is different to another and Figure 7 whose version of the truth "We have a well-defined data strategy that is aligned with the is right.” business strategy, and a centralized, secure data lake that powers data-driven decision making across the enterprise.” Operations Foundational Chief Operating Officer, multinational reinventors telecommunications company ations 90% 3% Source: Accenture operations maturity survey, 2023 enting Enterprise Oper v ein R 19 2. The CHRO as a growth executive, Accenture 2023 https://www.accenture.com/us-en/insights/consulting/chro-growth-executive
Five ways to reinvent operations Case study 3M builds For US-based industrial conglomerate 3M, The team has a faster, streamlined reducing manufacturing downtime for its process to predict manufacturing custom module more than 60,000 products is critical to problems ahead of time, even when drive efficiencies and cost savings. It decided the manufacturing plant is to streamline to integrate big data streams from two offline—moving data from the plant manufacturing production lines, correlate them, then run to Microsoft Azure went from taking analytics and machine learning locally to predict anomalies. By building a custom module with weeks to just minutes. Microsoft Azure SQL Edge, 3M’s team created a bridge between traditional processes and The process is no longer labor intensive, helps next-generation AI and computational features 3M stay on top of the latest cloud capabilities of cloud. ii and offers a highly secure solution. ations enting Enterprise Oper v ein R 20
Five ways to reinvent operations 03 Innovate processes for enhanced performance gains Business processes and associated tasks tend to gain undesired complexity over time. As organizations try to solve this, they end up adding more people to each task, along with a patchwork of ad-hoc technology solutions, which only makes process mining more cumbersome. In a world where the digital and physical are fusing rapidly, digital 3 twins are windows of transparency—and one of the best ways to shine a light on a business’ internal workings. ations Operations reinventors are starting to invest in digital twin capabilities for scenario planning. By using these virtual representations, they can visualize the as-is process and discover inefficiencies caused by duplicative, non-value-adding activities and process deviations across the enterprise. This approach offers objective, fact-based insights derived from actual data to help enting Enterprise Oper audit, analyze and improve existing business processes. v ein R 21 3. Virtual, real-time models of physical objects or systems
Five ways to reinvent operations In addition to providing real-time data, these systems can identify process gaps and show how to improve processes across functions using low-code automation on cloud-based platforms that give an outside-in view. “Rather than innovate a process, Operations reinventors are well positioned to lead the field as they can access a new people tend to automate the old performance frontier. process. The system doesn’t really add value then, because Figure 8 then it throws out the same data “We adopt process mining as well as internal and external as always. Organizations need to benchmarking across all business processes to drive best-in-class be open enough to innovate performance.” processes and be able to Operations Foundational implement them.” reinventors VP Supply Chain & Procurement, multinational integrated energy and petroleum company 75% 5% ations Source: Accenture operations maturity survey, 2023 enting Enterprise Oper v ein R 22
Five ways to reinvent operations Case study Unlocking A multinational food and beverage company source to pay (STP) processes. Now, the wanted to become the preferred snack business company operates faster and more efficiently $550 million in in the world, but fragmented finance and than before, with customer satisfaction at nearly procurement processes couldn’t keep up with 100%. Under management, the company has savings with changing customer demands. It had grown generated more than $550 million in savings to process reinvention rapidly and set up various supplier systems that invest in new products and better customer and couldn’t share consistent data, its employees supplier experiences. were working in old systems and silos and operating margins were lower than its peers. The new OTC processes have Working with Accenture, a regional center of improved efficiencies by 34% and excellence was established and more than 80 delivered nearly $217 million in software bots were deployed to transform order working capital savings while to cash (OTC) and master data processes. establishing sustainable, efficient Artificial intelligence (AI) tools and platforms processes. made it possible for the company to streamline order management, cash applications and Thanks to intelligent operations, the company is ations deductions management processes. These expected to achieve additional cost savings of changes led to efficiencies in core OTC and 20% and 30% across STP and OTC processes. enting Enterprise Oper v ein R 23
Five ways to reinvent operations 04 Humanize automation experiences at scale Many organizations are fairly mature when it comes to the use of automation across processes such as invoicing, payroll, vendor management or reconciliations. But often, introducing automation in new areas can be met with resistance. Stakeholders, such as business leaders, employees and customers, may have questions such as: How many hours of training are needed before it can ations contribute to the bottom line? How long will it take to understand and use the new tools effectively? Given the sheer volume of data and insights needed to drive solutions for the problems enterprises face, business leaders should lean on the full capabilities that generative AI and the next generation of AI enting Enterprise Oper advances provide. v ein R 24
Five ways to reinvent operations Operations reinventors make deliberate efforts to explore new use cases for automation with their ecosystem partners, aiming to make automation more user-centric and to simplify the relationship that employees and customers have with technology. They also “Whenever we spend millions of measure return on investment and the success of intelligent automation investments dollars in getting an apparently differently. Instead of looking at key performance indicators, such as faster turnaround times or lower error rates, they measure experience-related outcomes. super system in place, simplicity is lost. At every stakeholder level Figure 9 there is an input that must be “We deploy AI and automation for customer, employee and partner given for the system to function experience management solutions at scale.” properly. Training people to get this input in the desired manner Operations Foundational is the biggest challenge that reinventors we've faced.” 71% 1% Head of Marketing, India, multinational automobile manufacturer ations Source: Accenture operations maturity survey, 2023 enting Enterprise Oper v ein R 25
Five ways to reinvent operations Case study A European bank To sharpen its competitive edge, a European Using a sophisticated management bank aimed to offer better customer service at app and 20 robotic process with an automated lower cost. automation (RPA) bots, the bank has service model Through strategic managed services, automated its end-to-end process for Accenture now runs many of the bank’s handling most credit card incidents. operations including customer service, invoice The result? The bank’s team of management, claims, operations, trade finance, specialists resolves most issues in a collections, procurement, funds management single day, down from two weeks. and e-learning. The bank has achieved significant improvements. For example, process automation has unlocked 50% efficiency gains. Improved customer service has reduced average call handling times by 44%. Invoices are processed with 30% to 50% less manual effort. And the bank has slashed operational costs by ations more than 50%. enting Enterprise Oper v ein R 26
Five ways to reinvent operations 05 Employ an agile talent strategy The next wave of business transformation will shift from creating isolated digital capabilities to creating the foundations of a new reality—a shared reality that seamlessly converges the physical lives we’ve been leading with the digital ones we’ve been rapidly expanding. But as organizations modernize their legacy systems, they can find it difficult to align and upskill their teams to make the most of the new technologies. Different levels of capability within the talent pool—based on experience and skillsets—can ations complicate the transition. Operations reinventors make the most of organizational diversity. They don’t force rigid constructs for problem solving. Instead, they enable people with a choice of technology tools so that they can develop mutually beneficial solutions to business challenges. enting Enterprise Oper v ein R 27
Five ways to reinvent operations Enabling a hyper-personalized employee experience demands a talent management and HR information system that can keep up. A robust foundation of an integrated and highly automated system can fuel flexible future growth, enabling organizations to “We have put systems in place scale highly specialized talent capabilities, without the inefficiencies normally that help us measure our thinking associated with hyper-personalization. time, so we can do more strategic Figure 10 thinking rather than spending “We have an agile talent strategy where machines augment human time on the nitty-gritty. We free work in nearly all processes, inspiring fluid collaboration and up time to think about issues that employee movement across functions.” really matter for our future—such as how can we make each of our Operations Foundational brands more sustainable.” reinventors Head of Digital Marketing for Australia and 92% 3% New Zealand, multinational conglomerate ations Source: Accenture operations maturity survey, 2023 enting Enterprise Oper v ein R 28
Five ways to reinvent operations Case study Unlocking A global food manufacturer saw an opportunity It consolidated employee data onto a single to digitize its talent and HR operations to platform enabling greater visibility for reporting a 30% boost in improve the employee experience and become and implemented a self-service model to more competitive in the marketplace. manage the volume of employee inquiries more productivity with an effectively. It also established a single shared integrated talent The company used a combination of services center to generate analysis and insights an innovative, data-driven approach from workforce data to back business platform which blends human + machine decision-making and boost performance. talent, and cloud-based technology Over a five-year period, productivity has and SAP® SuccessFactors® to drive increased by 30%, and data accuracy has the change. increased to 99%, enhancing compliance. Employee satisfaction rates have also climbed by 24%, up from 61%, with happier employees resulting in improved business outcomes. ations enting Enterprise Oper v ein R 29
How to access a new performance frontier ations enting Enterprise Oper v ein R 30
How to access a new performance frontier Even as more organizations achieve operations The challenges enterprises are most affected Businesses are racing toward a maturity, charting out a well-defined operations by today are ones they are not yet equipped to future that is wildly different roadmap to execute business strategies solve. But organizations seeking to transform continues to be the biggest challenge that most quickly and reinvent themselves can employ from the one they were of them face. strategic managed services to gain access to designed to operate in. And capabilities necessary for a digital core, Being flexible and choosing different pathways process expertise and the deep pool of while there are many benefits to reinvention to fit different parts of the specialized talent to deliver outcomes at scale. to reaching operations enterprise can help. One route is to choose the In doing so, they can free up capital and right partner to provide some of the capabilities increase cash flow by changing how work gets maturity, the reality remains needed to access a new performance frontier. done and promoting investment in new that, for organizations Using a strategic managed services approach business opportunities. currently at the lower levels, enables wider access to specialized talent and leading automation platforms that can help And they can speed up the growth agenda the gap is widening. As change deliver continuous reinvention. In this way, by pairing data-driven insights with creative accelerates, finding new value partners can help accelerate seamless solutions to deliver relevant customer transformation across enterprise functions to experiences. can’t wait. Accelerating deliver more value. operations maturity can help Indeed, we found that 69% of organizations organizations to access a new that are moving to adopt a strategy of Total 4 performance frontier. Enterprise Reinvention said that having a business partner that helps select and build ationssolutions and platforms is important for the successful delivery of their strategy. enting Enterprise Oper v ein R 31 4. Total Enterprise Reinvention, Accenture 2023 https://www.accenture.com/us-en/insights/consulting/total-enterprise-reinvention
Authors We would also like to thank the following individuals for their contributions: Research, Operations Aarohi Sen Yusuf Tayob Vipin Gairola Growth & Strategy, Operations Group Chief Executive Growth and Strategy Lead Jashobrata Bose Operations Operations Riddhi Kaul Yusuf Tayob is group chief executive of Vipin Gairola is growth and strategy lead Marketing and Communications, Operations. His team of more than in Operations and a member of the Operations 219,000 professionals works with our Accenture Global Leadership Council. Susan Austin clients to solve their most complex He has more than 23 years of experience business problems and to deliver in helping global brands move to Kristen Caughill sustainable growth and competitiveness. intelligent operations and digitally Raghavendra Rao Operations delivers a comprehensive transform across multiple industry portfolio of enterprise business process sectors. He is also responsible for building services, including Research and asset-led solutions for organizations using Development, procurement, supply chain, data, technology and AI. His work finance, HR, marketing and sales, includes building future-ready workforces ationscustomer service and support, and trust to fuel innovation, streamline delivery and and safety, as well as industry-specific improve experiences. business services in banking, insurance, capital markets, telecommunications, utilities, software and platforms, and Project team health and life sciences. He is also a Tatjana Berg, Katarzyna Furdzik, Laurie Henneborn, member of the Accenture Global Emily Kish, Maria Francesca Mecca, Soubhagya enting Enterprise OperManagement Committee. Mohapatra, Sandra Najem, Gabriel Schmittlein, v Tomasz Sloniewski, Joanna Syczewska, Karen Wolf. ein R 32
Glossary 360° value delivers the financial business case and unique Total Enterprise Reinvention is a deliberate strategy that aims value a client may be seeking. Accenture partners with our to set a new performance frontier for companies and in most clients to achieve greater progress on inclusion and diversity, cases, the industries in which they operate. Centered around reskilling and upskilling their people, achieving their a strong digital core, it helps drive growth and optimize sustainability goals and creating meaningful experiences for operations. It requires a strategy for continuous, dynamic their customers, employees and communities. reinvention. It becomes a unifying force, across the C-suite and every function and business area, because, by definition, all are involved and accountable for its success. It demands Compressed transformation—Transforming multiple parts of an outside-in perspective that connects what’s happening in the business at the same time or executing a single large the organization with what’s happening in the world. And it transformation much faster than ever before. requires new skills and an increased depth of understanding of technology, change management, communication and how to work with partners to achieve results faster. Digital core is fundamental to all other strategic needs of an enterprise. Amplifying the role of technology in reinvention means shifting from a technology landscape of static, standalone parts to interoperable pieces intentionally integrated and leveraging the cloud. The digital core consists of three layers: an infrastructure and security layer, a data and AI layer, and an applications and platforms layer. Building a ationsstrong digital core is not a one-time project. It must be continuous to incorporate new technologies and business capabilities. enting Enterprise Oper v ein R 33
Appendix Research methodology Survey demographics Throughout April and May 2022, we surveyed Revenue (in US dollars) 15 Industries 1,700 executives globally—72% C-level or equivalent—across 15 industries and 12 countries. We also conducted $1–1.9B 118 7% Banking 146 I 9% 27 in-depth interviews with executives across countries $2–2.9B 366 22% $3–5.9B 436 26% Consumer Goods & Services 137 I 8% and industries. $6–9.9B 238 14% Utilities 129 I 8% $10–19.9B 254 15% Communications & Media 128 I 8% 12 Countries $20–49.9B 190 11% $50B or more 98 6% Automotive 122 I 7% Australia 63 India 81 Oil & Gas 115 I 7% Brazil 37 Italy 59 Retail 115 I 7% Canada 99 Japan 210 High Tech 114 I 7% China 205 Spain 30 Industrial Equipment 114 I 7% France 54 United Kingdom 100 Life Sciences 110 I 6% Chemicals 106 I 6% ations Germany 170 United States 592 Software and Platforms 104 I 6% Roles (to nearest equivalent) Travel & Hospitality 104 I 6% C-level VP level Insurance 100 I 6% (or equivalent) (or equivalent) Healthcare 56 I 3% enting Enterprise Oper 72% 28% v ein R 34
Appendix Decoding enterprise reinvention in the context of operations maturity Total Enterprise Reinvention involves six differentiating characteristics that are key to continuous reinvention. Organizations that pursue continuous reinvention through this journey of intelligent operations must use a combination of these six capability measures to realize each of those reinventor characteristics. Whether reinventing the enterprise or accelerating operations maturity, the emphasis is on an organization’s ability to harness the ongoing technology revolution—where new technologies and expanding IT are disrupting and driving the next waves of innovation that are bringing new approaches and solutions to businesses in every industry. Six differentiating characteristics of Total Enterprise Reinvention Six capability measures of operations maturity Adopt an enterprise-wide strategy Make the digital core a primary to reinvent all functions and source of competitive advantage in Data, Leading business units delivering the reinvention strategy analytics and Artificial� practices automation intelligence Move beyond traditional benchmarks Place talent strategy and people and set a new performance frontier impact central to reinvention, for themselves and not as an afterthought Stakeholder Business-tech� Talent � experiences Focus on reinventing boundaryless Commit to a philosophy of collaboration strategies ations capabilities that cut across continuous reinvention, evolving as functional silos competitive conditions change enting Enterprise Oper v ein R 35
Appendix Analyzing operations maturity Econometric analysis We analyzed the survey responses across six capability measures of operations maturity (data analytics and automation, To understand the relation between organizations' levels AI, leading practices, business-tech collaboration, talent strategy and stakeholder experiences). Respondents were of operations maturity and their performance across 360° asked to rate their maturity on a four-point scale (not in use, limited use, wide use, use at scale) across each of the six value indicators, we applied regression analysis to cross capabilities. Scores were cumulated across all six capabilities, with the scores ranging from 0 to 24. After rigorous section data. statistical analysis, we segmented the responding organizations based on the following ranges of maturity scores: 360° value indicators Score less than or equal to 12 Stage 1: We used non-financial performance elements of the Foundational Accenture 360° value framework for the analysis: Score greater than 12 but less than or equal to 16 Stage 2: sustainability (environment, social and governance), Automated experience, innovation, talent and inclusion and diversity. Stage 3: Each sub-component composite indicator is based on a Score greater than 16 but less than or equal to 20 Insight-driven set of indexed scores, normalized on a 0-100 scale. Stage 4: Experience consists of scores that reflect customer Score greater than 20 Intelligent experience, ecosystem partner experience (for example, supplier churn) and employee experience. Innovation is focused on innovation management and The four levels of Intelligent information security. Talent is based on the "Net Better operations maturity (operations reinventors) Off" outcomes, consisting of a company’s performance in the areas of compensation and benefits, work/life balance, culture and values, or talent development. ations Insights-driven Inclusion and diversity is based on employee diversity 9% and product accessibility. Financial indicators were Automated treated separately; we analyzed operating margins and 25% of organizations total shareholder return. We used data sourced from are at the highest Arabesque, Glassdoor and S&P Global. Foundational 48% level of operations maturity enting Enterprise Oper v 18% ein R 36
Appendix Regression analysis Machine learning analysis For each indicator reflecting companies’ performance across 360° value, we tested whether there’s a positive For the analysis of organizational capabilities that are most predictive relation to the level of operational maturity and given value indicator strength. Both levels and annual changes of an organization’s likelihood to improve operations maturity by two were tested in a multivariate regression framework based on the equation below: or more levels between 2019 and 2022, we applied machine learning analysis. We used a random forest algorithm and complemented it with a logistic regression algorithm to understand organizations’ Y= X + Maturity Level + capabilities strategy for achieving peak performance operations. i i 1 i 2 i Using our survey, we evaluated how well organizations were scaling up 26 different organizational capabilities that were further segmented 360° value KPI Organizations' Reported levels of operations maturity into six dimensions of value: financial, experience, sustainability, (experience, background factors (binary variables, tested against foundational and automated) inclusion, talent and innovation. We focused on capabilities that were talent, etc.) (size, industry, etc.) already implemented enterprise-wide at scale as our predictors. Random forest algorithm Where: We applied a random forest algorithm to assess the likelihood of i denotes organization improving operations maturity by two or more levels between 2019 and β_1, β_2 - model parameters estimated using Ordinary Least Squares to capture the impact of each covariate on 360° value performance 2022. The reported relative importance of scaling digital capabilities is ε_i - standard error term based on the Gini (MDI) feature importance metric. β_2>0 indicates the positive relationship between higher levels of operations maturity and the 360° value KPI compared to the bottom maturity level, i.e., Foundational and Automated Logistic regression algorithm ations To understand the direction of the relationship between predictors and the likelihood of supercharging operations, we complemented random forest features importance analysis with logistic regression analysis, where we tested the relationship between the scale to which a company implemented a high level of capabilities adoption across 360° value segments and the odds of improving operations maturity enting Enterprise Oper by two or more levels between 2019 and 2022. v ein R 37
References i Contify Automotive News, August 10, 2021, via Factiva ii 3M manufacturing plant uses data analytics to increase efficiency and cost savings with Azure SQL Edge, December 11, 2020.https://customers.microsoft.com/en-us/story/844496-3m-manufacturing-azure-sql-edge ations enting Enterprise Oper v ein R 38
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