Breaking Down Internal Barriers in Companies Crucial Amid Increasing Digitization, Accenture Study Finds
17 Junio 2020 - 07:59AM
Business Wire
Majority of executives surveyed admit their
business functions fail to collaborate on digital projects,
dragging financial results down
Many companies do not realize the full value of investing in
digital projects due to a lack of collaboration among their
critical business functions, according to a new study by Accenture
(NYSE: ACN). The study found that 75 percent of executives said
their departments compete rather than collaborate on digitization,
which raises cost and eats up expected revenues gains.
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Together makes better (Graphic: Business
Wire)
The study, titled “Together Makes Better,” is based on publicly
reported financial information as well as a survey of 1,550 senior
executives across R&D, Engineering, Production and Supply Chain
business functions from mostly manufacturing and industrial
companies in February 2020. While fielded before the extent of the
COVID-19 pandemic was evident, the research points to trends and
issues that the crisis and economic downturn will only exacerbate
and provides insights on how to tackle them now, next and in the
never normal.
“As companies have grown, they have developed silos –
centralized functions and divisions that often focus primarily on
their internal needs and inhibit collaboration as a result,” said
Nigel Stacey, managing director and global lead for Accenture
Industry X.0. “Now that the crisis is speeding up digital
transformation, this old ‘walled garden’ problem is rearing its
head again. It isn’t just preventing companies from digitizing
their businesses as a whole but putting them at risk of slower
recovery and stunted growth.”
The cost of cross-function competition
For example, many companies have made redundant investments in
certain technologies. This lack of collaboration and alignment
across functions has already cost companies. For example:
- Between 2017 and 2019, their investments in digital projects
increased costs by almost 6 percent.
- Companies had expected to add 11.3 percent to their annual
revenues by digitizing functions yet achieved only an extra 6
percent on average.
- Sixty-four percent aren’t seeing digital investments boosting
their revenue growth at all.
“When business functions operate in silos while planning or
executing digital projects, it stifles innovation and can cause a
company to miss opportunities for growth and greater performance,”
said Rachael Bartels, senior managing director and global lead for
Function Networks and Programs at Accenture. “Leaders across
industries are realizing that even without the added challenges of
a global crisis, no company can afford a lack of collaboration
within their enterprise or between their business functions.”
A small group of companies (22 percent) stands out by how it
collaborates internally for higher value from digital. Between 2017
and 2019, these ‘Champions’ achieved significantly better financial
results from digitizing their business functions:
- They drove additional revenue with digital projects that was
four times higher than what other companies achieved – 27.1 percent
versus 6.6 percent.
- They grew thirteen times more profitably by increasing their
EBIT (earnings before interest and tax) by 27 percent versus 2.1
percent – even though they invested only 1.5 times more in digital
projects.
An additional analysis after the start of the pandemic has shown
that these Champions also weathered the current downturn better
than their peers on average stock price performance. This strongly
suggests that what these companies do differently increases their
competitiveness amid the worsening economic climate. This
includes:
- Champions’ business strategies include execution plans for
digital transformation across all functions. Every functional
leader knows what’s at stake and is held accountable for it.
- They are more likely to have a single C-suite executive
responsible for overall digital transformation and digital success
in each function (82 percent vs. 66 percent).
- They pick projects that bring people together and stimulate
collaboration between functions, such as connected device
management and digitization of engineering data.
- Their digital solutions and platforms are interoperable.
Champions are more likely to have their digital platforms work and
communicate well together (71 percent vs. 64 percent).
- They have clear rules for how their information technology
(which supports enterprise planning) and operating technology
(which controls manufacturing and operations) should work
together.
“Companies must sustain their digital transformation through the
economic downturn,” said Raghav Narsalay, managing director and
global research lead for Accenture Industry X.0. “This only works
if they commit to cross-function collaboration. Like efficiency and
productivity, it’s becoming a critical barometer for success and
differentiation in difficult times.”
About the research
The research is based on publicly reported financial information
as well as a survey of 1,550 senior executives across R&D,
Engineering, Production and Supply Chain business functions. The
survey was completed in February 2020 and covers companies with
annual sales exceeding $1 billion in 14 different industries and 11
countries. Industries include: Aerospace & Defense, Automotive
OES, Automotive OEM, Chemicals, Consumer Goods & Services, High
Tech, Industrial Equipment, Life Sciences, Medical Devices &
Technology, Metals & Mining, Oil & Gas, Other Natural
Resources, Semiconductor, Utilities. Countries include: Australia,
Brazil, Canada, China, France, Germany, Italy, Japan, Spain, United
Kingdom, United States.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services in strategy and consulting,
interactive, technology and operations, with digital capabilities
across all of these services. We combine unmatched experience and
specialized capabilities across more than 40 industries — powered
by the world’s largest network of Advanced Technology and
Intelligent Operations centers. With 509,000 people serving clients
in more than 120 countries, Accenture brings continuous innovation
to help clients improve their performance and create lasting value
across their enterprises. Visit us at www.accenture.com.
Accenture Industry X.0 helps businesses master the digital
reinvention of industry when they use advanced digital technologies
to transform core operations and unlock new revenue streams and
business models. We support every aspect of our clients’
multi-phase transformation, including workforce, customer
experience, R&D, engineering, manufacturing, business support,
and ecosystems. Visit
https://www.accenture.com/us-en/services/industryx0-index.
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version on businesswire.com: https://www.businesswire.com/news/home/20200617005059/en/
Jens R. Derksen Accenture +49 175 57 61393
jens.derksen@accenture.com
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