TECHNOLOGY VISION 2017 EXECUTIVE SUMMARY AN AUSTRALIAN PERSPECTIVE

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1 TECHNOLOGY VISION 2017 EXECUTIVE SUMMARY AN AUSTRALIAN PERSPECTIVE

2 Four out of five Australian executives agree that technology development is no longer a linear process, but happening exponentially. One manifestation of this is that while individual technology advances are moving rapidly, it s the multiplier effect of all technologies together that creates the greatest source of business disruption and business opportunity. In the Accenture Technology Vision 2017, the overriding message is that, as technology becomes more sophisticated, it s not the technology itself that s driving change. It s us. We are embedding humanity into technology. It s a shift with massive implications for every business. And to keep a competitive edge requires constant and rapid innovation. Australian organisations clearly agree with this new fact of life. Eight out of ten told us that they need to accelerate their ability to innovate just to keep up. However, for the moment those efforts are largely restricted to targeted investments in specific areas of the business, rather than holistic commitments to embed digital at the heart of the organisation. While 42 per cent of global executives are embracing technology enterprise-wide, that s only the case for 31.9 per cent of Australian businesses. This discrepancy points to some ongoing hesitation about how to address the transformational waves of disruption breaking across every industry. 42% 31.9% of global executives are embracing technology enterprise-wide of Australian businesses are embracing technology enterprise-wide

3 While there may well be hesitation, the Accenture Technology Vision 2017 points to a wide range of digital opportunities from which Australian organisations can profit. This year, our central theme, Technology for People, explores how we can use technology to amplify and extend the power of people across all dimensions: consumers, workers and citizens. With technology designed by people, for people, we can transform how we work and live, and can achieve far more than we have in the past. The Technology Vision 2017 contains five key trends: AI is the New UI, Ecosystem Power Plays, Workforce Marketplace, Design for Humans and the Uncharted. These underpin the overarching theme of a People First approach to business and technology. This is all about using technology to augment and enhance what people can do, to listen to customers and employees more effectively, and connect and partner with them to achieve new goals. Those new goals are increasingly mutual, between employees and employers, businesses and their customers, and even what were once competitors. It s a new era of collaboration which is generating new and often unexpected partnerships. To make the most of them, leaders will need to empower people with technologies that work with them, rather than just for them. That brings together business and personal goals in a way we ve not seen before. The results, as we show this year, are transformational.

4 TREND 1 AI IS THE NEW UI Artificial intelligence (AI) is moving beyond a back end tool for the enterprise and taking on much more sophisticated roles within technology interfaces. From autonomous driving vehicles that use computer vision, to live translations made possible by artificial neural networks, AI is making every interface simpler and smarter and setting a high bar for how future interactions will work. AI will act as the face of a company s digital brand and a key differentiator and become a core competency demanding C-level investment and strategy.

5 When it comes to AI and people, it s not a question of humans versus machines as some have characterised the relationship. Instead AI is supporting and shaping a new, productive relationship between humans and technology. Take Flamingo, for instance. This is an Australian business that s developed an Intelligent Guided Customer Experience solution for organisations that offer complex online financial products. Flamingo fuses web-chat, web-forms and machine learning to guide customers through complex decision-making processes from quotation to payment. From the very first page they view whether that s on mobile or desktop Flamingo eliminates complexity and makes it much easier for customers to buy. In doing so it increases conversion rates. And the more Flamingo does, the better it gets, as it learns about how customers and employees interact.1 AI is also on the way to becoming one of the key ways an organisation differentiates itself. Amazon s intelligent personal assistant named Alexa, for example, could well eclipse the parent brand as more and more people use it across an already wide and constantly growing range of tasks, from getting their news fix to planning a vacation. In fact, Accenture predicts that in five years time, half of a business s customers will select its services based on the AI offered rather than the brand itself. This is transformational stuff. And Australian business need to invest accordingly. That s just one example of how AI is transforming the way businesses and even whole industries work. It s a view shared by Australian executives, 71.5 per cent of whom expect AI to significantly or completely transform their industry over the next three years. So how is that likely to play out? AI will take on increasingly complex tasks. For example, the University of Queensland has developed an intelligent robot that searches for and kills the crownof-thorns starfish that attack the Great Barrier Reef. Its ability to learn has proved so effective that it correctly identifies its target with greater than 99 per cent accuracy, and completely ignores decoys.2

6 TREND 2 ECOSYSTEM POWER PLAYS More and more organisations are integrating their core business functions with third parties and their platforms. But these are much more than traditional partnerships. Leading businesses are using these tie-ups to stake claims in the new digital ecosystems that are starting to redefine industries worldwide. It s a trend that no business can afford to ignore. Our research shows that an overwhelming 93.2 per cent of Australian businesses consider platform based business models to be a strategic imperative. Without one, it will be increasingly challenging to meet customer and employee needs in a digital world. What s more this is not just a development for the future. Seventy-two per cent of Australian businesses say that digital ecosystems are already having a noticeable impact on their industry.

7 Businesses are using platform-based strategies to create new ecosystems with themselves at the centre. Take Camplify, for example. It s a relatively new service connecting holidaymakers with recreational vehicle (RV) owners. Through its unique peer-to-peer sharing environment, Camplify provides holidaymakers with a new way to hire a caravan, campervan, motorhome or camper trailer from private owners across Australia. The platform enables RV owners to earn extra income while their RV is not in use and users to get all the benefits of an RV without having to own one.3 Camplify is just one among many new platform-based business models making connections that are tapping into previously hidden sources of value. The ability to bring unexpected partners and players together is at the heart of these new ecosystems. This is a core strength. However, for many businesses it s also a source of unease. We found that nearly 30 per cent of Australian organisations are concerned about taking their place in these new digital communities because they are uncertain about how disruption will play out in their industry. Right now, it s clearly a concern that needs to be overcome. Nearly twice as many Australian businesses, compared to their global peers, are holding back from taking the plunge into digital ecosystems. But this will surely change. Seventy two per cent of Australian businesses believe that their future competitive advantage is no longer solely in their own hands, but also rests with the partners and ecosystems they choose. With that in mind, the race for ecosystem advantage will soon be in full swing, as organisations jostle to form the collaborative relationships that will underpin their future success. In fact, many organisations, whether or not they know it, are becoming embedded into ecosystems. The technology infrastructure decisions they take today e.g. the move to cloud directly influence the ecosystems they will join, along with the network of partners with which they will collaborate. Those Australian businesses that remain unsure about how and indeed how quickly to move forward need to overcome those uncertainties. So what does that entail? First and foremost, they need to determine the platforms on which they depend the most and identify those that are most dependent on them.

8 TREND 3 WORKFORCE MARKETPLACE The future of work has already arrived. Digital leaders are fundamentally reinventing their workforces. It s a trend that is clearly evident in Australia: under 10 per cent of Australian organisations consider themselves as having traditional, hierarchical structures. What s more, well over half feel under extreme competitive pressure to extend innovation into the workforce. And more than three-quarters of them are now using on-demand labour platforms to hire and manage independent workers.

9 All this is being driven by the arrival of an increasingly digital and on-demand workforce. For example, one hundred of the Fortune 500 companies already use Upwork, the platform for freelancers. Labour platforms enable workers to become more liquid, supporting distributed teams that can be quickly assembled and dispersed on a project-by-project basis.4 In this world, static business processes are out and open talent marketplaces are in. Take a look at 90 Seconds. It s a cloud based video production platform that allows customers to order a video project from anywhere in the world. Using 90 Seconds online tools, clients can plan the entire video project. Once that s done, 90 Seconds global community of filmmakers takes over, with the project going to the team that s best placed, qualified and most competitive. Clients can collaborate on the editing process in real time, while a dedicated editor produces a complete video in line with specifications.5 Compare that to the logistical headache facing organisations looking to source the multiple resources and moving parts normally needed to commission and complete a video project. The direction is clear. One-fifth of Australian businesses believe that independent freelance workers will become a seamless extension of their workforce within the next 12 months. And in fact, Australia is in the forefront globally of this new workforce paradigm. Australian executives, on average, say that just 57 per cent of their current workforce is made up by internal employees. Getting used to new approaches to talent is the first step towards more transformational developments in which corporate marketplaces are developed. Instead of jobs for life in a single defined role, people will increasingly be dynamically teamed together on demand. This goes to the heart of the liquid workforce that will supply the agility needed to prosper in a digital marketplace. Australian businesses agree. Over three quarters of them believe that being able to build a strong liquid workforce will equip them to win the war for talent. For organisations still waiting to get started, the message is loud and clear: there s no time to lose. So how should they get going? Leadership needs to sponsor new talent marketplace strategies, with dedicated budget, governance and HR policies. With those in place, organisations will be ready to begin pinpointing pilot opportunities in collaboration with business leaders within their organisations. For organisations still waiting to get started, the message is loud and clear: there s no time to lose.

10 TREND 4 DESIGN FOR HUMANS Nowadays every business is digital. But from now on, the biggest innovations won t be seen in technology itself, but rather in how technology tools are designed with people in mind. The new frontier of digital experience is technology designed specifically for human behaviour. It s the key not just for high-quality user experiences, but also for the overall effectiveness of technology solutions.

11 As businesses listen, observe and respond to human behaviour they are redefining their relationships with customers and employees. Capabilities like these are much more than just a nice to have. They re going to drive real business outcomes and success. It s no surprise to find that Australian businesses understand this. Seventy-one per cent of them agree that organisations which can truly tap into what motivates people, and design customer experiences around that, will be in the next wave of leaders. That sentiment is in line with global research by Accenture showing executives believe that a satisfied customer base adds on average 56 per cent more revenue than the average customer. Almost three-quarters of Australian businesses agree that understanding human context and behaviour is essential for the competitive differentiation of new services and experiences. However, only one quarter of them are planning to use those insights in the development of new relationships and experiences over the next three years. This could represent a major missed opportunity. With technology now integrated into every action that people take, process they follow and object they use, 2.5 million terabytes of data are produced each day. That s not just a source of vast amounts of information about how customers live and employees work. It s also an unprecedented opportunity to use advanced analytics to understand how people behave. This is a potential level of insight that would have been unthinkable even just a few years ago. And we re seeing leaders use it to design technology that operates at a human level. For example, Wattblock is a service that uses design-led thinking to help people living in apartment buildings reduce their energy consumption. Using analytics, Wattblock estimates energy waste by comparing a building s energy consumption to data driven benchmarks. It removes the need for expensive on-site energy audits, saving money and ultimately helping the environment. With its technology designed around humans, Wattblock has now helped hundreds of buildings across Australia to identify and quantify energy waste and raise awareness. Customers have achieved up to 78 per cent reduction in common area electricity billing.6 As businesses listen, observe and respond to human behaviour they are redefining their relationships with customers and employees. Rather than being providers, they re becoming partners with the people who use their products, services and technologies and in the process creating the opportunities to build long-term loyalty and value. While Australian businesses recognise this, many need to raise their game. Although the technologies and data driving behavioural insights are commonly available (and at a lower and lower cost), 70 per cent of Australian organisations agree that they still struggle to understand their customers needs and goals. So where to next? By using the customer behaviour insights that they currently possess, they can implement pilots for offering behaviour-personalised experiences with existing products and services. The results from those should form the basis for creating the partnerships with people that will be key to securing goals in a human centric marketplace.

12 TREND 5 THE UNCHARTED The pace and extent of digitally-driven change astounds even those working at the heart of the digital economy. Businesses are not just creating new products and services; they re shaping whole new digital industries. In this world, there s a lag between what s technologically possible and the rules, standards and ethical norms that define what s acceptable. From now on, if they are to fulfil their digital ambitions, organisations need to be willing to step up and shape the new rules and standards themselves. Those that do, will benefit by being able to secure a place at or near the heart of newly-forming digital industries.

13 Australian businesses acknowledge just how rapidly and dramatically their environment is changing. Over two-thirds agree that they are now entering new digital industries that are still in the process of being defined. And a third strongly believe that the breakthrough innovations that they are currently developing fall into regulatory grey areas, with government regulations unable to maintain pace with the speed of technology advances. Nonetheless, pioneers are pressing ahead and changing the rules for whole industries. Take FarmBot, for example, an inexpensive monitoring service for farms and remote environments that s easy to install and use. But it s very different from other monitoring systems: FarmBot uses only one sensor per farm. No additional computers or communication equipment are needed. Using satellite technology to send information about water levels to its secure data centre, it provides information to users via SMS and web access on smartphones, PCs or tablets. Built on open source technologies, FarmBot is helping to transform a global industry, introducing new levels of transparency and trust that change how farmers everywhere could one day engage with technology.7 Looking ahead, industry boundaries will dissolve further still. In anticipation organisations should begin now to develop a detailed understanding of the ecosystems in which they are involved as well as defining how their products and services influence the wider society around them. Armed with this understanding they will be ready to move ahead with a governance structure and a road map for responsible and ethical engagement. For example, this might mean taking an inventory of all data inputs to the business. Then they focus on areas where personally identifiable information is received. Having done that, they can spot potential risks and highlight where new governance (for the company and the industry) may be required. It s all part of the new responsibilities that businesses will have to assume in the digital marketplace. With the relentless pace of change across all industries, businesses everywhere must write the new rules of engagement for themselves. It s a sentiment endorsed by Australian executives, two-thirds of whom believe that they would prefer to forge new industries themselves rather than leaving it up to others to set the ground rules.

14 REFERENCES a-starfish-killing-artificially-intelligent-robot-isset-to-patrol-the-great-barrier-reef/ ABOUT ACCENTURE Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialised skills across more than 40 industries and all business functions underpinned by the world s largest delivery network Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 394,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at ABOUT ACCENTURE LABS Accenture Labs incubate and prototype new concepts through applied R&D projects that are expected to have a significant near-term impact on clients businesses. Our dedicated team of technologists and researchers work with leaders across the company to invest in, incubate and deliver breakthrough ideas and solutions that help our clients create new sources of business advantage. Accenture Labs is located in seven key research hubs around the world: Bangalore, India; Beijing, China; Dublin, Ireland; Silicon Valley, California; Sophia Antipolis, France; Washington D.C.; and Israel. ABOUT ACCENTURE RESEARCH Accenture Research shapes trends and creates data-driven insights about the most pressing issues global organisations face. Combining the power of innovative research techniques with a deep understanding of our clients industries, our team of 250 researchers and analysts spans 23 countries and publishes hundreds of reports, articles and points of view every year. Our thought-provoking research supported by proprietary data and partnerships with leading organisations such as MIT and Singularity guides our innovations and allows us to transform theories and fresh ideas into real-world solutions for our clients. Copyright 2017 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture