The stark reality of innovation
While ASEAN companies are investing heavily in innovation, they need to make bigger, more strategic leaps to seize new opportunities.
Rapid technological advances are presenting companies with opportunities to create more value for customers.
Disruptors – younger, often hungrier, companies that are focused on innovation – are taking advantage of this to quickly bridge the gap between what’s possible in the future and what’s being offered now by established counterparts. Many industry incumbents are being outpaced by these disruptive start-ups as they quickly gain market share.
According to professional services firm Accenture, around 68 per cent of companies are in industries that are experiencing some form of disruption. The most highly exposed sectors in ASEAN are high tech, infrastructure and transportation services as well as retail. Meanwhile, Accenture’s analysis shows that the industries that are most susceptible to future disruption include energy, industrial equipment and machinery, and automotive.
These were gleaned from a study commissioned by Accenture titled Innovation Maturity Index 2018/2019. The study looked at data points from over 3,000 companies in 20 industries spread across the globe.
There is significant investment appetite for innovation in ASEAN. Within ASEAN, investment in innovation has been increasing by 27 per cent over the past five years and expected to increase by another 35 per cent in the next five years.
A TARGETED APPROACH TO INNOVATION
One of the basic tenets of a holistic plan for building long-term innovation is aligning mindsets. Accenture found that while most ASEAN companies surveyed had created an innovation strategy, many did not have a strong culture to sustainably and quickly execute their innovation strategies.
“Many companies still view innovation as an ad-hoc process. But real innovation requires a persistent effort, well-defined processes and true commitment,” said Mr Patrick De Moustier, managing director and ASEAN lead at Accenture Digital.
To help companies become more mature in their thinking of innovation, Accenture has designed a framework for building the mechanisms for reliable innovation. This involves defining an innovation strategy, instilling a culture of innovation and creating an innovation architecture.
In particular, successful companies that leverage innovation diligently were found to perform well in executing seven key strategies:
- Asset Smart: Increase the utilisation of overall asset base, relative to the industry average
- Network Powered: Use a managed ecosystem to bring the best innovations to customers
- Hyper Relevant: Personalise customer interactions
- Data Driven: Use advanced analytics to identify cost savings
- Inclusive: Develop new services that better address customers’ higher needs
- Technology Propelled: Ensure key executives advocate and drive adoption of new technologies
- Talent Rich: Create new, modern forms of workforces (flexible, augmented and adaptive) to gain a competitive advantage in fast-changing markets
According to Accenture, ASEAN companies are lacking in terms of being asset-smart, inclusive and network-powered.
“It all starts with the data and continues by being connected and relevant to your customer. The challenge lies not only in having the right technology, but also having the ability to change the practices and attitudes of the people in the organisation,” added Mr De Moustier.
Accenture developed an Innovation Maturity Index to measure the performance of companies across these seven practices.
Said Mr De Moustier: “We found a causality between a company’s digital investment and a well-executed innovation strategy with its economic performance. All the companies that have performed well financially had developed expertise around the seven innovation practices.”
SCHNEIDER ELECTRIC: ACCELERATING DIGITAL INNOVATION
Schneider Electric is one company that has sought to reinvent the customer experience with new digital services. The global specialist in energy management and automation is collaborating with Accenture over a five-year period to build and accelerate new connected services and solutions.
This involves setting up a Digital Services Factory to spur digital innovation and speed to market. The facility’s activities include incubating new ideas using a customer-centric approach as well as developing analytics and Internet of Things (IoT) capabilities to accelerate application development.
By combining real-time analytics with connected technologies and solutions on an IoT platform, Schneider Electric can be more responsive to – or even anticipate – customer needs. New smart digital services, such as predictive maintenance, asset monitoring and energy optimisation, help customer operations become more proactive and efficient.
To find out how your company can accelerate innovation, head to Accenture’s website.