NEW YORK/BOSTON—The ways in which enterprises buy and receive services to augment their operations are undergoing unprecedented change, according to a new research study sponsored by Accenture and published by industry analyst firm HfS Research.
The report finds that while cost-effective business services will always be important, achieving the next threshold of value creation is dependent upon transitioning to the emerging “As-a-Service Economy.” In this model, value is delivered via on-demand, highly scalable plug-and-play services that impact business outcomes. Simplification is king – eliminating complexity, poor processes and manual intervention in favor of working smarter through simplified, but intelligent operations, the companies said.
According to the report, “Beware of the Smoke, Your Platform is Burning,” which is based on a survey of 716 enterprise service buyers, advisors and service provider executives, 53% of senior executives view As-a-Service as critical for their organization, yet 68% of enterprises report that their core enterprise processes will not be delivered As-a-Service for five or more years.
“Enterprises are facing enormous challenges from the digital business evolution and other competitive forces to increase revenue and decrease costs while improving the client experience, but our research shows that there’s still not enough of a burning platform – or capability – to drive change in the near term,” said Michael Corcoran, senior managing director, Global Growth and Strategy, Accenture Operations. “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. By applying technology, data and analytics, and talent smartly – what we call Intelligent Operations – buyers are in a better position to innovate faster, create new services and exploit new business opportunities to drive material business:
Among the key research findings based on the As-a-Service ideals:
- Analytics, automation and proactive intelligence are critical. Half of enterprise buyers (51%) believe having these capabilities today would have “massive impact.” These are necessary precursors to streamlined, high-quality data sets for analysis. Approximately seven out of ten buyers expect to make “some” or “significant” progress over the next two years around analytics and automation (69%) and proactive intelligence aimed at enabling employees to do more with data (66%).
- Senior leaders want change, delivery staff do not. More than half of service buyer senior leaders view As-a-Service as critical and 61% are ready to replace legacy providers in order to align with more visionary providers to achieve their desired end state. But these leaders need to motivate and enable their middle manager and delivery staff, as just 29% see the value of As-a-Service in the same way.
- Service providers recognize the importance of As-a-Service. Eighty-three percent of service providers view As-a-Service as critical. However, investments in robotic process automation (32%) and cognitive computing (24%) are surprisingly low considering the impact these technologies can have on efficiencies and results over time.