Ever had that experience where you were chatting or texting someone about a topic and the next thing you know, you log onto your social media pages and find either an advertisement or suggestion on the very same topic?
Well, says, Kirtan Sita, Managing Director in Technology Practice at Accenture in Africa, this mystery is more common than you think. With the advancements in algorithms and coding, the internet has become a space not just for communicating, but also for audience segmentation, customer interaction, e-commerce and a whole new way of doing business.
Businesses have evolved from using the internet economy (which was based on internet connectivity mainly to communicate with stakeholders) to the digital economy – where all economic processes, transactions, interactions, and activities are based on digital technologies.
Now, however, we see a fast shift to Digital Platform Economy – where social activity is facilitated by platforms. This activity is more than just commercial transactions and includes collaboration between businesses, facilitating partnerships, hosting meetings and enabling most business operations to be performed remotely. Digital-everything-everywhere is here today and the “future” is now!
Platform economies are the next big thing
The word “platform” is probably one of the most important words in the Post-Modern Digital Era. So, let’s start by first demystifying this concept of Platforms to truly understand the benefits of the digital economy. Platforms are an online space where partners and eco-systems come together to offer differentiated experiences or solutions, and businesses that understand this well can fully leverage their Digital Platforms to do so. For example, Discovery – a large South African medical insurance provider – digitally leveraged its Platform.
Today, Discovery operates its Platform model globally with a diverse ecosystem and partners all vying to participate in a disruptive way. Using this same Platform, they have pivoted to create a new disruptive behavioural banking and insurance platform. One can do much more than just banking – book flights and accommodation, shop online, manage loyalty subscriptions – they are disrupting the scene to ultimately change once normal behaviours for the better. Digital Platforms are probably the next big thing to create and drive growth for the next five years, and businesses will need more innovative ways to tap into internal and external resources to expand their capacity and reach.
At Accenture, we recognise that the Platform Economy is indeed the next disruption and this disruption is an inescapable and growing challenge for all industries. Our latest paper Winning In The Age of Disruption – Accenture Innovation Maturity Index South Africa, found that over 85% of South African companies are vulnerable to future disruption or already facing disruption. We conducted a series of surveys with executives of top companies in South Africa. Every one in two executives concedes that their company is not prepared for disruption.
A staggering 75% expect their industry to be disrupted by innovations in the next three years – especially from NEW competitors and NEW technologies, and only 16% are very satisfied that their company’s innovation efforts will position them well to overcome future disruption. To successfully participate in the Platform Economy, it is fundamental to have a clear digital strategy that articulates the different roles of partners in the ecosystem, what data is important, and the actions to ensure the business competes successfully amid disruption.
How SA companies measure up
When companies are in the middle of disruption; they typically make cautious moves but playing it safe amid fierce disruptors is very risky. What is concerning is that 68% of SA companies continue to compete in their legacy businesses using mostly traditional approaches, and very few have just started transforming their legacy business into new business. Using Accenture’s Innovation Maturity Index, we have determined that a sharp divide exists between those on the winning side of innovation and those being disrupted by it and only a small group exists of SA Innovation Champions (7%) averaged 68 points. Globally, Innovation Champions score 76 points on average.
Companies that thrive in the age of disruption build deliberate innovation structures and strategies. These high-growth companies aim for disruptive growth rather than being incremental about it, and innovate by design, i.e. innovation is part of their strategy. They balance innovation between old and new and make sure innovation is quantifiable. These companies also have a culture of innovation in which creativity and new thinking is encouraged and rewarded. Lastly, high-growth companies have a well-designed innovation architecture that specifies clear processes for moving innovation from ideation through research and development, to mass-market commercialisation, employing a combination of internal and external innovation capabilities.
Is your business ready for Platform disruption?
Companies that will survive the disruption of the Platform Economy adopt the seven innovation practices that lead to organisational change. They are Data-driven and make use of it securely and efficiently, they are Hyper relevant, knowing how to be and stay relevant by sensing and addressing customers’ changing needs.
These companies are Talent rich in their workforces and Inclusive in their governance, giving a competitive advantage in fast-changing markets. Being Technology propelled means they master leading-edge technologies that enable business innovation and harness the power of Networks with partners. Lastly, they are Asset smart and adopt intelligent asset and operations management to run businesses as efficiently as possible.
Champions use innovation strategically to unlock trapped value in new businesses while revitalising their core business. A strategy we call the wise pivot. To pivot successfully – make a wise pivot – companies need to adopt a new approach to organisational change. This strategy is continuously evolving and allows companies to manage their core assets as a dynamic portfolio within three lifecycle stages – the ‘Old’, the ‘Now’ and the ‘New’- to grow and reshape the core business into a new one built with new technologies.
At Accenture, we believe disruption doesn’t have to be painful. Businesses can knit innovation strategies into their very core to keep abreast of new ways of working and disrupt minimally. As we take a lens to our future of the Platform Economies we see: Everything – Everyday – Everyone – Everywhere – Connected.