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From the pandemic to supply chain volatility, economic uncertainty and inflation—companies have faced an unprecedented number of black swan events over the past few years. To be successful, they need the ability to quickly integrate new technologies, people and processes so they can pivot their business on a dime and navigate to changing conditions.
Of course, this quick integration is no easy task. Especially considering that over the last two years, one in two companies rapidly adopted new technologies and transformed their business in record time, according to new research from Accenture. In fact, the average company now has well over 500 software applications, from almost as many vendors, with 81 percent planning to add more over the next two years.
At a time when budgets are tightening, enterprises now need to focus on untangling their applications to ensure they work cohesively to enable agility and provide ongoing business value.
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Cracking the Code
We’ve found that one in three companies have cracked the code and have managed to make their enterprise technologies work together.
Last year, these companies with high interoperability grew revenue six times faster than their peers with low operability and they are poised to unlock an additional five percentage points in annual revenue growth. This is a huge financial advantage.
To put it in perspective, if two organizations start with $10 billion in revenue today, the organization with high interoperability stands to make $8 billion more than its peer with low interoperability over the next five years.
So, how does high interoperability create such a powerful impact? By integrating enterprise applications, businesses can move from siloed technologies to connected solutions that enable better data sharing, enhanced employee productivity and improved customer experiences.
GN Group, a global audio solution manufacturer, is a prime example of how high interoperability can enable organizations to take advantage of opportunity. Following a 42 percent rise in headset sales in 2020, the company braced for further demand surges due to remote school and work. When sales jumped 82 percent in the first quarter of 2021, company leaders knew they needed to unite employees and technology under a common strategy to meet the increased demand—and fast.
They turned to Microsoft’s cloud-based enterprise solutions to connect functional applications – like supply chain operations and finance – so that employees across the organization could make decisions based on a single source of trusted data.
In this way, the sales team could check if procurement had the available components for a large incoming order. Similarly, vendors and suppliers, who were previously late to learn of new demand, could also make informed inventory decisions.
By removing data silos and creating a common language across critical applications and systems, GN enabled parallel, rapid transformation in multiple business areas.
Also see: Top Digital Transformation Companies
Long-Term Value Without a Big Price Tag
The concept of interoperability isn’t new, but the ability to manifest it is. As companies move to the cloud and have access to improved and inexpensive applications, interoperability not only becomes a source of long-term value—it becomes low-cost too.
Leading companies are achieving high interoperability with just 2-4 percent higher IT and functional budgets directed at applications. The investment is helping them outperform their peers across industries and economic cycles.
Consider life sciences, an industry that grew rapidly with the global demand for vaccinations. Companies with high interoperability grew revenue by almost 10 percent on average, while those with low/no operability only managed a five percent gain.
In the travel industry, which was hit particularly hard by the pandemic, saw revenue decline by four percent, on average, in low operability companies. In contrast, high interoperability companies were able to quickly pivot their business models and grow revenue by two percent.
For more information, also see: Digital Transformation Guid
The Three C’s
Across industries, interoperability is a common denominator for success. There are three best practices for getting to high interoperability in an era of compressed transformation.
- Leverage the Cloud: By moving existing applications to the cloud and adopting cloud-based enterprise applications, companies can connect data and experiences, which helps to standardize processes and drive change across the organization in parallel. Seventy-two percent of companies with high/medium interoperability have adopted public cloud and have already migrated 30% of their data and workloads.
- Use Composable Tech: Moving away from a technology architecture of static, monolithic and standalone parts to creating one comprised of composable pieces helps to boost agility. Repeatable solutions that can be configured and reconfigured to rapidly develop new capabilities enables companies to build flexibility into the core of their business. These solutions can be curated for specific industries and functions and act as a form of future proofing—giving organizations the dexterity to quickly adopt the technologies of tomorrow. With data flowing between connected applications, companies can easily share information with the entire organization so everyone is on the same page.
- Meaningful Collaboration: Interoperable applications are only one part of the equation. Interoperability supports meaningful collaboration by allowing functions and people to work together seamlessly toward a common goal. Real-time data, analytics, and AI, together with new ways of working, can unlock the value of technology and empower people and achieve better outcomes. Companies with high interoperability have an unwavering focus on improving human connections.
It’s clear today, more than ever, that companies must anticipate uncertainty in all its forms. By leveraging the cloud, using composable tech, and focusing on collaboration, companies can improve interoperability to overcome obstacles and outpace competitors in growth, efficiency and resiliency.
For more information, also see: Cloud and AI Combined: Revolutionizing Tech
About the Author:
Brian McKillips is Senior Managing Director and Growth and Strategy Lead for Enterprise & Industry Technologies, Accenture