Rolling With the Cloud and the As-a-Service Economy

The rapid and radical pace of change in business and IT is enough to give any CIO a serious case of whiplash. But one of the most nettlesome areas is balancing internal capabilities with contracted services. A newly released report from Accenture and HFS Research, “Beware of the Smoke, Your Platform is Burning,” notes that the ways enterprises buy and receive services are “undergoing unprecedented change.”

According to the report, which surveyed 716 enterprise service buyers, advisors and service provider executives, 53 percent of senior executives view as-a-service as critical for their organization, yet 68 percent of enterprises report that their core enterprise processes will not be delivered as-a-service for five or more years. Only 3 percent indicated that they have already achieved their organization’s goals.

A primary problem, noted Michael Corcoran, senior managing director, Global Growth and Strategy, Accenture Operations, is the lack of a “burning platform—or capability—to drive change in the near term.

“As outsourcing moves beyond labor arbitrage, process efficiency and transaction processing and into a new era of service delivery, both buyers and providers need to make a concerted effort to transition to an as-a-service model to remain competitive,” he noted.

The goal? Apply technology, data and analytics, and talent smartly. It’s what Accenture refers to as Intelligent Operations, an approach where buyers are in a better position to innovate faster, create new services and exploit new business opportunities to drive material business outcomes.

The report presents several key findings. Among them: Analytics, automation and proactive intelligence are critical. Overall, 51 percent of respondents said that having these capabilities today would have a “massive impact” on the business. In addition, 69 percent of buyers expect to make “some” or “significant” progress over the next two years in the analytics and automation arena.

In addition, the report found that 83 percent of service providers view as-a-service as critical, though investments in robotic process automation and cognitive computing are lagging. According to Accenture, clouds hold the greatest promise for delivering new as-a-service capabilities. Forty-four percent of senior executives would be willing to write off legacy IT investments and move straight to the cloud if they could find the right solution that gave them speed to value.

In the end, the report recommends that executives focus on five key areas: Addressing the disconnect between leadership ambition and operation lethargy; pushing for more “big bang change”; embracing collaboration in order to confront change, disruption and design thinking approaches; focusing on talent development and workforce engagement; and taking advantage of technology in order to simplify operations.

Samuel Greengard
Samuel Greengard
Samuel Greengard writes about business, technology and other topics. His book, The Internet of Things (MIT Press) was released in the spring of 2015.

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