The Technology Revolution: Mastering the Challenges of Radical Change

Yesterday, chatbots. Today, video AI. Tomorrow, a seat on the board? Technology is more important than ever. Generative AI has disrupted the market at a pace that was unimaginable until recently. Meanwhile, the cloud is paving the way for more technological revolutions. These developments are radically changing how companies work – from product development right through to aftersales. What are the organizational and operational factors that you should consider if your business is to generate value going forward?

Suddenly, everything started moving incredibly fast. After decades of AI research, the Large Language Model ChatGPT was launched in November 2022. What came next was a wake-up call and heralded the dawn of a new era. In just five days, five million users signed up for the tool. They used it to write essays for school, develop business plans, draft letters to lawyers, and provide support with programming. And in just a few weeks, the technology had swept through society and the economy like wildfire. It has changed our daily lives and is now disrupting long-established business processes. Generative AI, a term formerly unknown outside scientific circles, is now part of our everyday vocabulary.

AI has made it very clear what exponential technological growth feels like – and how fundamentally it impacts strategies and decision-making processes. In the future, this radically different pace will become the norm. And one of its effects will be to transform the role of CIO.

Unlimited IT Resources for All

It’s worth noting that none of this would have been possible without another revolution: the cloud. Initially, companies used the cloud as a way of radically reducing costs by outsourcing servers, data storage, and networks. Today, it has a much higher strategic value, offering organizations almost unlimited processing power. According to IDC, one in four German companies already use the cloud to gain rapid access to innovative technologies such as AI. Additionally, Accenture Research has found that companies that use the cloud to transform their business models and products develop innovations up to three times faster than their competitors. Most future business models and sources of revenue are likely to be based on the cloud.

Keeping a Cool Head in a Fast-Paced World

These developments show that we’ve now entered an “exponential age of technology”. And this brings with it the danger of companies finding themselves overwhelmed, especially in Germany. Given the current unpredictable business environment and increasing global competition, managers are looking for ways to boost their resilience against a backdrop of uncertainty. At the same time, they want to secure their future by driving innovation and developing business opportunities. To master these challenges, they must implement revolutionary technologies and completely rethink processes while maintaining ongoing operations.

But Where’s the Added Value?

Another challenge faced by companies is the value gap. Many decision-makers, from CEOs to CFOs, are unsure which of the countless innovative cloud services and platforms offer true added value. And most companies still have no use cases for their specific business. Often this is simply because technologies, ranging from AI to the Industrial Internet of Things, are seen as a matter for IT and are therefore only touched on at board level. That’s something that has to change.

“Every board should include a seat for a Technology Steward.”

Five Key Pieces of Advice

Nowadays, every company – from consultancy firms to retailers – is a tech company. Managers and employees alike must adapt to this. To remain competitive in this new environment, you should consider the following points:

1.Accelerate Innovation – Shorten Project Times

Military conflicts, inflation, disruptions in the supply of raw materials: Geopolitical and macroeconomic uncertainties have been on the rise for years, and the situation looks unlikely to change. New technologies are key to enabling rapid responses to changing markets and the swift adoption of new business models.

But lengthy implementation projects are not the way to go. In the past, a planning horizon of five to seven years was the only option. Today, this approach is totally out of tune with business reality. Projects that run for more than two years often prevent organizations from reaping the added value they’d hoped for. That’s hardly surprising when what originally appeared to be an innovation is already outdated by the time it goes live – or turns out to be nothing more than hype.

“Lengthy technology projects don’t meet today’s entrepreneurial requirements”

Standardized and rapidly adaptable cloud services enable enterprises to avoid these pitfalls. Here, it’s important to identify the points at which your project can be broken down into smaller subprojects, each delivering its own quick wins. For example, instead of redesigning the entire supply chain at once, start out by redesigning material requirements planning, then tackle procurement, and so on.

All for All – Democratize Technology

Many companies subscribe to the long-outdated but still widely held belief that the business units’ job is to take care of the business while the IT department makes sure that hardware and software keep running. But in today’s world, this dogmatic approach poses entrepreneurial risks. Technology is now at the heart of every business process. And this means that each and every employee must get to grips with it. How can generative AI help with developing a go-to-market strategy? Or drafting legal documents? Or analyzing business models? These aren’t questions that the IT department can answer; the answers must come from the relevant business units. In fact, these units can often implement suitable solutions right away – in line with clearly defined compliance and governance rules, of course. And if there’s currently no suitable solution on the market, they may use low-code/no-code tools to create one of their own.

At some companies, this paradigm shift is coming about almost as a matter of course. But don’t assume that this is always the case. Be sure to communicate the new expectations to your employees and provide the tools and learning resources they need to meet them.

3.Break Down Silos – Build Multifaceted Teams

As new technological options proliferate, the time available to evaluate and test new technologies and use them to shape new processes is becoming increasingly scarce. Traditional organizational structures are simply not up to this. What companies need instead are multifaceted product teams that draw together experts from across the company. This provides you with the necessary 360-degree view. The team’s task is to quickly assess the impact of a specific tech project on other business units and processes, and to reach an immediate decision.

“Multifaceted” doesn’t just entail complementary skillsets and experience, but also diverse mindsets. In an era of exponential technological progress, this is often more important than decades of expert knowledge.

4.Hire for Mindset – Not for Skills

By contrast, up-to-date tech skills are among the very scarcest resources. Virtually all companies are vying to attract the few technology experts on the market. There’s not much you can do about this situation, but you can change the way you deal with it.

“There’s not much we can do about the shortage of skilled workers, but we can change how we deal with it.”

Skills and knowledge are becoming obsolete faster than ever before. Every training program and curriculum lags far behind the market. As a result, your applicants’ qualifications are less important than they were just a few years ago.

Today, what counts is mindset. Companies need talented people who embrace change, people who are enthusiastic about technological trends and eager to try out new things. Adapt your recruitment efforts to reflect this – because this will be the core competency of the coming years. Talents of this kind become influencers, spreading their enthusiasm for technology throughout the organization – even among team members who may be reluctant to embrace change.

5.Changes at Board Level – Giving Technology Stewards a Seat at the Table

To reiterate: Technology can’t remain a matter for IT departments alone. It’s an integral part of your business. In view of this, it’s not just the business units that need a change of mindset, but above all the Management Board.

Every company needs a technology steward who can gauge whether planned technology projects can actually deliver the desired added value and whether they’re a good fit for the company’s existing architecture. Ideally, this steward should have a permanent position at the highest management level, but that’s not always possible or at least not at once. In such cases, the minimum requirement is that the steward be on an equal footing with the Management Board in discussions and have the power to approve strategic decisions from a technical perspective. So, this is more than merely an advisory role.

Operational Implementation – Notes on the Cloud Strategy

So much for strategic considerations to address the sheer volume of disruptive technologies and the speed with which they’re coming onto the market. As shown, artificial intelligence and the cloud hold the greatest potential because they pave the way for further innovations. This is where your operational priorities should lie if you want to generate maximum benefit in as little time as possible.

“Use the evergreen principle wherever possible.”

When it comes to the cloud, the focus is on scaling across the entire enterprise:

  • Map your business processes via standardized cloud platforms wherever possible. For some 80 percent of processes, this has long been easily achievable. Only depart from the standard for processes that are real differentiators and give your company its competitive edge.
  • Establish a workflow for running structured checks on the deluge of new cloud services and discuss their business potential with the relevant decision-makers.
  • Use the evergreen principle: Cloud providers regularly deliver innovations within the scope of their services, automatically keeping you up to speed with the very latest technology. This saves resources, but it calls for a different form of change management.

“The bottom line: AI must deliver tangible business value.”

Generative AI: The Time for Experimenting Is Over

While cloud platforms are well established, investment in generative AI is still in its infancy. In fact, 73% of German companies plan to increase their spending on data and AI projects this year. But what should you bear in mind when it comes to implementation? In the past twelve months, Accenture has completed more than 1,000 GenAI projects worldwide. Based on our experience, we recommend the following:

  • Enter into partnerships with universities, think tanks, or technology companies. This will help you gain a better understanding of the opportunities, limits, and risks associated with AI. It will also help increase your company’s AI maturity.
  • Forget the experimentation phase and go all out on AI projects that you can and want to scale going forward.
  • Only implement projects that deliver genuine added value for your customers. Too many initiatives only appear groundbreaking or exciting at first sight. So, be sure to consider EBITDA before every project.

Real-World Examples

Businesses are staking their claims in AI right now. Over the coming 12 to 18 months, they’ll be aiming to drive forward and scale up their AI projects as quickly as possible. This is the general trend in view of the speed with which many technologies are transforming our world. Companies that keep on trying to perfect new products and processes before rolling them out will be left far behind, with no chance of catching up with the competition. The following pages give you an insight into big-name companies’ technology projects and show how these companies are addressing the new normal. You’ll also learn more about the work of the CIO of tomorrow. I hope you’ll find this inspiring reading.

The author:

Dr. Dominik Krimpmann is Managing Director of Accenture Technology Strategy & Advisory in Germany, Austria, and Switzerland. With a background in computer science and business administration, he advises CIOs, CEOs, and CTOs of Fortune 500 companies on their future technological direction. Over the past ten years, he has led the implementation of more than 50 business and technology transformations.

 

 

Further insights and practitioner perspectives can be found here: Tech.Rulez.Period!