SlideShare a Scribd company logo
1 of 102
Download to read offline
The journal of high-performance business   accenture.com/outlook | 2013, Number 1




Cross-industry ecosystems

Growth outside
the box
PLUS
Radically rethinking public services
Why gamification is serious business
How end-to-end sustainable
systems drive value
Outlook


Outlook
Vol. XXV
2013, No. 1
Outlook is published by Accenture.
© 2013 Accenture.
All rights reserved.


Editor-in-Chief                      Chairman & CEO
David Cudaback                       Pierre Nanterme

Managing Editor                      Chief Marketing &
Letitia B. Burton                    Communications Officer
                                     Roxanne Taylor
Senior Editor
Jacqueline H. Kessler                For more information about
                                     Accenture, please visit
Senior Contributing Editor           www.accenture.com.
Paul F. Nunes

Contributing Editors
David Light                          The views and opinions expressed in these
Craig Mindrum                        articles are meant to stimulate thought
                                     and discussion. As each business has
Industry Editor                      unique requirements and objectives, these
Wendy Cooper                         ideas should not be viewed as professional
                                     advice with respect to your business.
Contributing Writers
                                     Accenture, its logo and High Per­ ormance
                                                                     f
Lance Ealey
                                     Delivered are trademarks of Accenture.
John Kerr
                                     This document makes reference to trade-
Assistant Editor                     marks that may be owned by others. The
Carolyn Shea                         use of such trademarks herein is not an
                                     assertion of ownership of such trademarks
Design & Production                  by Accenture and is not intended to repre-
IridiumGroup Inc.                    sent or imply the existence of an association
                                     between Accenture and the lawful owners
www.accenture.com/Outlook            of such trademarks.

This publication is printed on
10 percent post-consumer fiber.
The Long View



 Bold ideas for a digital economy
                                          likely to be created through collabo-     not limited to the private sector.
                                          ration, within “ecosystems” made up       Caught between rising citizens’
                                          of mutually supportive companies          expectations and a looming fiscal
                                          from multiple industries. (The article    crisis, many innovative local,
                                          begins on page 22.)                       state and national governments
                                                                                    are experimenting with new,
                                          Another disruptive idea discussed         more efficient and more effective
                                          in this issue is intended to enhance      service-delivery models that can
                                          current business models rather            also help close major funding gaps.
                                          than replace them—“gamification,”         (This article on the public sector
                                          the application of the mechanics of       begins on page 12.)
                                          digital gaming to a wide spectrum
                                          of business challenges. In fact,          “Ecosystems,” “gamification,”
                                          companies across several industries       “inclusive business initiatives,”
	 Pierre Nanterme                         are already using the concept to          “public entrepreneurship”—going
	 Chairman & CEO                          encourage innovation, build more          forward, we will be hearing more
	Accenture                                effective marketing campaigns             about these additions to the new
                                          and retain talent (page 30).              business lexicon. And I hope you
 As the locus of global growth                                                      find our discussion of the ideas
 shifts and competition intensifies,      The high-growth markets of Asia,          behind them useful.
 identifying new markets and              Latin America and Africa will
 opportunities is not the biggest         continue to be at the center of
 challenge facing business. The           strategic thinking for most com-
 harder part may well turn out to         panies, with particular attention
 be coming up with bold, new, often       paid to an emerging middle class
 disruptive approaches and models         of consumers. Here, too, innovative
 that are required to achieve high        new models and approaches are
 performance in a digital economy.        essential for success.

 In this issue of Outlook, we look        One of our articles looks at “inclusive
 at a number of these models, some        business initiatives,” enterprises
 of which are already proving to          that partner with governments,
 be highly successful.                    NGOs and local entrepreneurs to
                                          scale innovation and boost profit-
 The idea explored in one article calls   ability in low-income communities
 into question a bedrock assumption       (page 38). Another looks at the
 about the world’s economy—that it        other end of the income scale, at
 is structured as a relatively small      China’s affluent, sophisticated
 number of discrete industries,           urban consumers. Their behavior
 compartmentalized collections            has changed so dramatically in
 of businesses that pursue value          recent years that companies must be
 essentially on their own, in their       willing to embrace unconventional
 own markets. The article challenges      and often counterintuitive marketing
 this Industrial Age concept. It argues   strategies to reach them (page 48).
 that in today’s connectivity-enabled
 global marketplace, value and            When it comes to delivering value,
 differentiated offerings are more        however, bold new thinking is
 	1
Contents
     Perspective                            Features
     The Long View                          Public Service                      Strategy

1	 Bold ideas for                        12	Coup d’état:                     22	Cross-industry
   a digital economy                        Radically rethinking                 ecosystems: Growth
     By Pierre Nanterme                     public services                      outside the box
                                            By Bernard Le Masson, Brian J.      By Cedric Vatier
                                            Moran and Steve Rohleder
                                                                                To reap future growth
                                            As they attempt to square           benefits, companies
                                            public service demand               must smash through the
     Industry Report                        against supply, governments         traditional confines of
                                            worldwide must do more,             industry walls to seek
     Media  Entertainment
                                            better, with less. To be            collaborative opportunities
4	 eyes have it:
  The                                       successful, they need to            that stretch across multiple
  Guess who controls                        overthrow old ideas and             business sectors.
                                            embrace the next generation of
  the future of TV
                                            tools and ways of working.
     By Robin Murdoch, Youssef D. Tuma                                          Strategy II
     and Marco Vernocchi
                                                                             30	Why gamification is
     Television is about to                                                     serious business
     undergo the same kind of                                                   By Marco Ryan, Andy Sleigh,
     disruption that occurred                                                   Kai Wee Soh and Zed Li
     with the introduction of
     the smartphone. What will                                                  By using the mechanics of
     change when the largest                                                    digital gaming, companies
     screen in the home has a                                                   in a wide range of industries
     big say in how we consume                                                  are boosting innovation,
     content, information and                                                   building more effective
     services over the Internet?                                                marketing campaigns and
                                                                                driving value.



                                                                             A few leading companies are making
                                                                             the changes demanded by sustainability
                                                                             science and creating competitive
                                                                             advantage for their businesses.
                                                                             “ ow end-to-end sustainable systems drive
                                                                              H
                                                                              business value” (page 58)




2	       Outlook 2013, Number 1
F
                                        or additional thought leadership from Accenture, including the Accenture Institute for
                                       High Performance and Accenture Technology Labs, please visit www.accenture.com/ideas.
                                       For a personalized electronic newsletter tailored to highlight specific industries and
                                       issues, subscribe to My Outlook at www.accenture.com/myoutlook.




   High-Growth Markets                     Sustainability                                  Information Technology

38	Scaling innovation                 58	How end-to-end                             78	IT governance:
    for an emerging                        sustainable systems                            Spinning into control
    middle class                           drive business value                            By Saideep Raj, Jack Sepple and
                                                                                           Leslie Willcocks
   By Raghav Narsalay and                  By Peter Lacy
   Ryan T. Coffey
                                           Plenty of companies have                        For today’s IT executive,
   Efforts to create innovations           taken significant steps                         the job has never been more
   that can meet both social and           toward becoming more                            difficult. The solution?
   business goals in low-income            sustainable, but none has                       Mastering a new set of
   markets are fraught with                turned incremental progress                     capabilities focused on areas
   unanticipated dangers.                  into truly transformational                     that are generally not part
   A study of 18 initiatives               change. That requires                           of traditional IT governance.
   from around the world reveals           innovation and collaborative
   how ventures can succeed                initiatives right across the                    Business Process Outsourcing |
   where others have failed.               enterprise—from strategy to                     Talent  Organization
                                           operations to the supply chain.
                                                                                      88	 asters of the mix
                                                                                         M
   China                                                                                   By Michael J. Salvino, Walter G.
48	Meet the new                            Supply Chain Management                         Gossage and Mary Lacity

   Chinese consumer                    68	When product                                    The benefits of effective
   By Jeffrey I. Beg, Tzeh Chyi Chan       complexity hurts true                           change management in BPO
   and Xuyu Chen                           profitability                                   are measured at both an
                                                                                           individual and organizational
   Successful consumer                     By Johan Sjöström Bayer,
                                           Mikael Hilding, Antal Kamps,                    level. Companies that are
   marketing in China is, in
                                           Gustaf Sahlén and Robin Sparrefors              attentive to transition
   many ways, as much art
                                                                                           issues and to supporting
   as science. It combines a               To meet the challenges                          the retained workforce can
   sophisticated understanding             inherent in today’s volatile                    drive topline benefits from
   of local perceptions and                global marketplace, companies                   a more effective functional
   preferences with a willingness          need the right analytical lens                  organization.
   to embrace unconventional               to clarify the incremental
   strategies and the best                 profit generated by offering
   new technology.                         more innovative and
                                           differentiated products.




	3
Accenture outlook-journal-february-2013
Industry Report | Media  Entertainment




The eyes have it

Guess who controls
the future of TV
By Robin Murdoch, Youssef D. Tuma and Marco Vernocchi


Television is about to undergo the same kind of disruption that occurred with the
introduction of the smartphone. What will change when the largest screen in the home
has a big say in how we consume content, information and services over the Internet?



Picture a typical nine-year-old           her classmates and loaded into          screen-viewing time. The fact is,
watching TV today. She probably has       her home’s cloud-based content          the TV is here to stay. Its role in
a tablet in her lap, ready to check out   librar y. After her friends leave,      delivering compelling viewing
videos related to the Animal Planet       she might pick up the easy-to-use       experiences—collective and
special she’s watching. Or perhaps        TV remote to take a high-resolution     individual—will continue. However,
she’s borrowed her big sister’s phone     tour around the Beijing neighborhood    the big screen in the living room is
so she can vote on this week’s episode    where her big sister lives. Or maybe    indeed undergoing a metamorphosis,
of Dancing with the Stars.                she’ll search for a favorite scene in   because what goes on behind the
                                          one of the Twilight movies.             screen is changing dramatically.
By the time she’s old enough to
head off to university, however,          Good-bye to the familiar old TV set?    For most of us, the TV will develop
her TV viewing experience will            Au contraire. For years now, the        as an even more valuable vehicle
be markedly richer. By then, she          demise of the popular appliance         for entertainment and, increasingly,
may be inviting her friends over          has been predicted as the Web has       for education and information. But
to watch the “sitcom” filmed by           claimed more and more of our            for business leaders up and down the
	5
Industry Report | Media  Entertainment




                                          media value chain—from filmmakers        continue to be so. There is still no
                                          and broadcast channels to Internet       substitute for the collective viewing
                                          service providers to “last mile”         experience of watching the big game
                                          communications operators—the             or the season finale of a popular
                                          reinvented TV is a huge disruption.      drama. Plus, the new Accenture
                                                                                   study reveals that young people are
                                          There will be winners—businesses         much more engaged with TV than
                                          that quickly grasp the nuances of        might be supposed.
                                          the resulting changes in the creation,
                                          financing, production and delivery of    Even 25-to-34-year-olds view, on
                                          content. But others may find them-       average, almost 140 hours a month of
                                          selves facing fierce new competition.    “traditional” TV programming—more
                                          Take, for instance, the pressure         than 20 times as many hours as they
                                          the cable companies are facing           spend watching video on the Internet
                                          from so-called over-the-top (OTT)        or on their phones (see chart, page 9).
                                          providers, such as Netf lix and          And nearly half of all users still sit
                                          Hulu, which send their content           down in front of the TV—not their
                                          through the Internet. In short,          smartphones or tablets—to watch
                                          we’re now seeing the collapse of         some type of OTT video content.
                                          the walls that previously excluded       Another relevant measure: YouTube
                                          new entrants to the TV business.         users average five or so hours of
                                                                                   video viewing per month—a figure
                                          So how can the TV still be relevant      that is dwarfed by the time they
                                          in a tablet and smartphone age?          spend in front of the TV.

                                          To be sure, TV viewing time has          Bottom line: Television still has
                                          become fragmented—the result of          great power to pull audiences. And
                                          busy lives that see consumers record-    big changes are coming that will
                                          ing, for example, the Boardwalk          continue to engage viewers.
                                          Empire episode that the school board
                                          meeting forced them to miss. And of      Not too many years from now,
                                          course, “screen time” today is shared    we will be able to use the TV unit
                                          with laptops, phones and tablets.        to access an entire ecosystem of
                                                                                   content—richly immersive, far more
                                          Accenture’s latest research on           of it fully interactive and all of
                                          consumer viewing habits finds that       it on-demand via the Internet. It
                                          fully 62 percent of TV viewers are       will be easily sourced from content
                                          concurrently using a computer or         catalogs and accessed with a
                                          a laptop and 41 percent are using        handheld device—a next-generation
                                          a mobile phone—messaging friends         smartphone, perhaps, or a dedicated
                                          about a sitcom joke or fact-checking     device that is as simple and intuitive
                                          politicians’ claims, perhaps. Coupled    to use as today’s remote.
                                          with the widespread availability
                                          of high-speed wireless Internet,         Just as significantly, individual
                                          today’s viewing experience is more       consumers, armed with high-
                                          interactive, more consumable and         performance hardware and software,
                                          far more sharable in real time.          will become content creators, able
                                                                                   to provide more of what the news
                                          Dominant medium                          channels deliver. (Think of higher-
                                          But the truth is that the living         quality versions of the public’s
                                          room screen remains a dominant           mobile-phone news bulletins of
                                          communications medium, and will          Hurricane Sandy’s devastation.)
6	      Outlook 2013, Number 1
www.accenture.com/Outlook




At the same time, the major movie           The easy answer, of course, is           them prefer using genres—that is,
studios are meeting the growing             “technology”—from the TV hardware        content types such as “spaghetti
demand for premium video content.           to the social media with which to        Westerns,” “cartoons” and others—
Look at the money pouring into              share content to the cloud services      as search criteria for finding new
blockbusters—$150 million to produce        that make it effective to store vast     video content. And 43 percent prefer
Skyfall, the latest James Bond film,        amounts of data. The fact is, however,   finding new video content by using
for example, and the estimated              that the consumer is the undisputed      personalized recommendation
$250 million spent on the newest            king of content.                         engines that track what they’ve
Batman movie, The Dark Knight                                                        watched and suggest similar content.
Rises. These movies are being               Over the past decade, control of
engineered during original production       the viewing experience has shifted       In a similar vein, 28 percent of users
to maximize the downstream                  rapidly to the one who holds the         have already created video playlists
opportunity in extras, web videos,          remote. TiVo and many other digital      on their current video services,
apps and so on. And, increasingly,          recording systems have made it           such as Netflix and YouTube. These
content is as likely to be distributed      easy for people to choose when they      companies make it ever easier to do
by an Amazon or a Google as it is           watch their favorite programs. But       this, particularly by using historical
to show up courtesy of Bravo.               consumers also want to be able to        behavior to recommend relevant
                                            personalize the services they con-       viewing experiences. The story is
King of content                             sume, with search, recommendations       much the same with music services
Network executives and cable                and social features becoming             such as Pandora and Spotify as
operators don’t need to look far            increasingly integrated across media.    well as Amazon.com with a whole
to see what is rocking their world.         Accenture found that 64 percent of       range of merchandise.




  Reinventing TV: Nine key questions
  for established media players
  There are dramatic changes in the television industry going on behind the
  screen (see story). Traditional media players must respond by reinventing them-
  selves, a process that begins with self-examination. Crucial questions for the
  C-suite management team include:

  1.	
     Should traditional media and entertainment companies reinvent themselves
     as consumer businesses? If so, how?
  2.	
     Can new digital economic models be made to work for all parts of the media
     value chain?
  3.	
     How might new OTT offerings threaten the subscription pay-TV giants?
  4.	
     What new types of partnerships and collaborations should media businesses
     consider in order to better match consumers’ new digital experience
     requirements?
  5.	
     Will new industry business models sustain investments in high-quality
     content—or will profits be channeled elsewhere?
  6.	
     How can the ad industry’s traditional players collaborate to move toward
     a new world of multiplatform advertising?
  7.	
     How can data and analytics be used to galvanize new business models?
  8.	
     Should traditional vertically integrated media companies resist or embrace
     open platforms?
  9.	
     How do content companies maximize revenue across linear and on-demand
     as the balance shifts toward the latter?


	7
Industry Report | Media  Entertainment




                                                 At the same time, consumers are           This is not just about controlling
                                                 becoming distributors. Social             content; it’s about content creation as
                                                 media users have an average of            well. The term “prosumer” is entering
                                                 3.2 friends who post videos at least      the language to describe talented
                                                 once a day; almost four out of            amateurs who use sophisticated but
                                                 10 consumers post video online via        affordable consumer technology
                                                 social media. More than half of the       to produce quality news reports or
                                                 respondents polled by Accenture           instructional videos, for instance.
                                                 would be interested in recommending       Today, aspiring adventurers can buy
                                                 video to others as part of belonging      a GoPro camera for less than $300,
                                                 to a video service.                       attach it to their mountain bike or




     UK viewers now get “all channels” digital TV
     In the summer of 2012, the British public got another         broadcast TV). It includes a unique content discovery
     way to watch “telly.” The new Internet TV service, called     platform: a central catalog that allows global search,
     YouView, has been hailed by some industry insiders            browsing by genre/popularity across content providers,
     as the natural successor to Britain’s current model of        and a “backward-looking” electronic program guide
     free-to-air TV. Some researchers expect that 3 million        (EPG). “Unlike a lot of smart TVs, it doesn’t zone off
     UK homes will have YouView by 2015.                           on-demand content in a separate section that you
                                                                   access from another menu—the whole lot is integrated,”
     YouView combines the United Kingdom’s free-to-air             notes one reviewer. Its open application platform can
     digital channels with on-demand content, all delivered        be used by any participating content provider, offering
     without subscription. An easy-to-use set-top box brings       consumers a tremendous range of content. It also
     together IP and broadcast TV technologies, making them        upgrades easily, accepting new features over time such
     accessible to viewers through a single consistent and         as behavioral targeting and predictive recommendations
     intuitive user interface. The service is backed by a          generated by analysis of social media data—such as
     consortium of seven partners, including the country’s         iTunes Genius music recommendations.
     main terrestrial broadcasters (BBC, ITV, Channel 4 and
     Channel 5), two ISPs (BT and TalkTalk) and a network          YouView provides a strong springboard for innovation.
     services provider, Arqiva.                                    Its unified and open ecosystem is expected to disrupt
                                                                   the existing TV business model, affecting content
     The service’s big innovation happens behind the screen.       providers, broadcasters, ISPs, advertisers, set-top-box
     Its application platform gives consumers access to a          manufacturers and many other technology enablers.
     vast array of content options. For example, if the box is     And it offers abundant opportunities to create new
     connected to a broadband line from a partner ISP, then        products and features, becoming increasingly attractive
     an application providing that ISP’s IPTV service will         to consumers and providers of content, devices and
     appear automatically. As the number of content sources        TV services.
     in its ecosystem grows, YouView’s attractiveness to
     both consumers and to potential new content, devices          To date, consumer feedback on the user interface
     and service providers will continue to increase. At           has been very positive. UK telecom company TalkTalk—
     launch, more than 140 content providers had signed up         just one of multiple sales channels for YouView—signed
     to add their content to the YouView platform; today,          up 29,000 YouView customers in the first month
     more than 300 providers are interested.                       after launch. A thousand new customers are signing
                                                                   up each day for the service, according to a TalkTalk
     YouView is not simply another version of a web-enabled        spokesperson.
     TV service. It features a single, consistent, intuitive
     user interface (integrating on-demand, catch-up and


8	         Outlook 2013, Number 1
www.accenture.com/Outlook




scuba mask, and capture aston-                         If those technology-enabled factors     not a stretch to say that companies
ishingly high-quality video that is                    are pushing the media industry from     such as Amazon and Google will
easily edited on any laptop and just                   one side, its key sources of revenue—   make big gains, as will others
as easily shared via social media.                     notably advertisers—are pulling it      that grasp the significance of the
Indeed, the growth in so-called                        on the other side. Increasingly,        disaggregation of traditional media
user-generated content has exploded.                   businesses expect to be able to         value chains and the development
YouTube now has more than 800                          measure what they get for their         of new forms of media value creation
million unique users every month,                      investments. Traditional media has      and consumption.
and while the vast majority of them                    always had a hard time delivering
are watching, growing numbers of                       precise measurement, and while          We’ve already seen the arrival and
them are posting content that they                     the explosion of Internet media is      growth of businesses that offer new
or others they know have generated.                    exacerbating the situation by further   ways for consumers to access digital
                                                       fragmenting viewing attention, it       content. New entrants like YouTube
The capabilities are developing                        is also creating opportunities for      and Netflix are also now creating
so quickly, and spreading so widely,                   better measurement.                     their own content to differentiate
that it’s safe to say that prosumer                                                            their brand and sidestep the battle
content will soon provide serious                      Following the money                     for content rights.
competition for some genres of                         So who wins in a new media world?
professionally produced content—                       The consumer does, of course.           Amazon, Google and Apple already
news footage, for instance, and some                   But the other winners are likely to     offer consumers access to significant
reality TV shows. Consumers are                        come from outside the boundaries        amounts of content, even though
even changing the funding of content                   that have defined the industry          it is not at the core of any of their
creation (see sidebar, page 10).                       over the past half-century. It is       businesses. For instance, Google’s




Screen of choice
TV is still the primary device for watching full-length shows and live content in both the United States and the United Kingdom.

Portion of US and UK viewers who watch video content over the Internet, on each device


                                                                                    70%
                                                        32%
Full-length movies and TV
                                  4%
                                    7%


                                                                               65
                                                       30
Live content
                                    6
                                   5


                                            12
                                                                                         74
Short videos/clips
                                                  24
                                            12

                                        9                                                                              TV
                                                                   49                                                  PC/laptop
User-generated content
                                             15                                                                        Mobile/smartphone
                                        9                                                                              Tablet



Source: Accenture analysis

	9
Industry Report | Media  Entertainment




For further reading                         core business is search, yet it streams       House of Cards, the US version of
                                            more than 4 billion hours of video            the UK political series of the same
Accenture Video-Over-Internet               per month via YouTube.                        name directed by David Fincher
Consumer Survey 2012: Winning the                                                         and starring Kevin Spacey.
Battle for Consumer Trust, Accenture        Apple generates the vast majority
2012: http://www.accenture.com/us-          of its income from sales of its               The tectonic shifts underneath the
en/Pages/insight-video-over-internet-       devices, yet it made $2 billion in            media industry will permanently
consumer-survey-2012.aspx                   revenue in the third quarter of               reshape the landscape, altering
                                            2012 alone from its iTunes Store,             everything from the flow of
“Taking The Pulse” study, Accenture 2012:   App Store, the iBookstore, sales of           advertising dollars to the makeup
www.accenuture.com/pulseofmedia             iPod services, and Apple-branded              of the industry itself.
                                            and third-party iPod accessories.
“Changing Faces: The TV Company                                                           To that last point: Some of the
of the Future,” Accenture 2012:             The newcomers are following the               writing may already be on the
http://www.accenture.com/us-en/             money. They understand that success           wall. In recent months, some pure
Pages/insight-changing-faces-tv-            in the media sector has revolved              OTT content providers have gone
company-future-summary.aspx                 around premium content, and                   from strength to strength. Netflix
                                            that it will continue to do so in the         now has more subscribers than
For more related content,                   future. Which explains YouTube’s              many pay-TV operators in the
please visit www.accenture.com.             announcement, in October 2011, of a           United States. That is an astonishing
                                            $100 million investment in premium            statistic, given that Netflix was
                                            channels and the announcement by              founded only in 1997.
                                            Netflix in May 2012 of its plan for
                                            a $185 million, five-year investment          At the same time, the most
                                            in original content. Just two                 forward-thinking of the traditional
                                            examples of Netflix’s investments:            operators are making significant
                                            The new season of Arrested                    moves to properly position them-
                                            Development, releasing shortly, and           selves in the new media world.




                                              Not waiting for deep pockets
                                              By 2010, a movie director named Steve Taylor secured funding to create
                                              a film adaptation of Donald Miller’s book, Blue Like Jazz. The following year,
                                              the film lost the support of a major investor, forcing Taylor to stop production.

                                              That’s when two fans of the book stepped in. To raise the $125,000 required
                                              to resume production, they created a Kickstarter webpage called “SAVE
                                              Blue Like Jazz! (the movie).” The campaign reached its funding target of
                                              $125,000 in 10 days—and blew past it, becoming the most successful Kickstarter
                                              fundraiser of 2010. In total, $345,992 was raised by 4,495 backers—an average
                                              of just $76.97 each.

                                              In April 2012, Blue Like Jazz opened nationwide across 136 screens. In just
                                              eight weeks—before distribution internationally and through rental and
                                              cable channels—it had netted half of the movie’s total budget. It is just one
                                              of several examples of crowdfunding. The trend is borne out by Accenture’s
                                              recent consumer research: 36 percent of digital consumers would be willing
                                              to donate small sums to fund their favorite movie or TV program.


10	      Outlook 2013, Number 1
www.accenture.com/Outlook




To take just two examples: British         from traditional advertising             The decisions that new entrants
Sky Broadcasting is making its             models—digital data is more              are making today up and down
existing content offerings available       accurate and more granular than          the media value chain are already
on as many devices as possible,            its analog predecessor.                  forcing some serious rethinking
and YouView—a new open-platform                                                     within the established media
system that makes IP and broadcast         But there is still much to do before     industry. The traditional broadcast
TV technologies easily accessible          the typical marketing department is      networks—those most at risk of
to viewers through one intuitive           able to effectively use sophisticated    disruption—must act more promptly
user interface—is backed by such           analytics to deliver premium,            and assertively than they are
industry giants as BT and the BBC          personalized, interactive advertising,   accustomed to if they are to survive
(see sidebar, page 8).                     and create a richer, more detailed       in the new world.
                                           understanding of specific consumer
Removing the guesswork                     groups—or fan bases—that will            But the decisions being made by
Traditional subscription models            respond to new offers.                   the Amazons and Googles have
are not the only ones at risk from                                                  ramifications far beyond the media
the new media model. Advertising           So what does the new face of TV          business itself. They will color the
will also have to accommodate the          mean for today’s established media       choices that advertisers—business-
steady shift to digital content and        businesses? The ascent of the            to-business as well as business-to-
the inexorable move to OTT content,        consumer requires business models        consumer—will have to make. They
together with the fact that more           that are built around consumer           will have an impact on the world of
and more content is being viewed           needs rather than those of a             education. They may well change
holistically, with digital entertainment   particular channel, platform or          the directions of development of
experiences encompassing TV, film,         advertiser. A single shared view         a host of new content-delivery
web video, gaming and apps.                of the customer—often across             products. And they could even
                                           different channels—is a prerequisite     reshape the role of media as it
Thus far, the managed migration            for a successful, consumer-focused       reflects and affects public policy.
of rights to new platforms has             multiplatform strategy.
preserved traditional TV advertising                                                To paraphrase the old political
and pay-TV subscriptions as the            The businesses that adapt success-       maxim: Where TV goes, so goes
greatest drivers of revenue. But the       fully will need to try different         the nation.
industry may be about to change            approaches concurrently. They’ll
too fast for that to remain true.          need to create and run with hybrid
Possible signs of things to come:          business models and constantly           About the authors
Subscriptions could well shift away        reevaluate their place in the media
from bloated bundles to à la carte         value “ecosystem”—perhaps taking         Robin Murdoch leads the strategy group
options that allow consumers to            on new roles—so they can spot and        within Accenture Communications,
pick and pay for exactly the content       capture new revenue opportunities.       Media  Technology. He is based
they want and no more, from a              In short, players all across the media   in Seattle.
range of different providers—new           value chain now have to plan for a       robin.murdoch@accenture.com
Internet-based players among them.         new and fundamentally different
                                           media delivery architecture.             Youssef D. Tuma leads Accenture Digital
Already, chief marketing officers                                                   Services for the United Kingdom. He is
everywhere are scrambling to                                                        based in London.
reallocate and optimize marketing          Ten years from now, the TV will          youssef.d.tuma@accenture.com
budgets across platforms. They are         still be one of the largest pieces of
getting some help from increasingly        furniture in the living room, and        Marco Vernocchi leads the Media 
sophisticated customer data                it will still have a central place in    Entertainment group within Accenture
collection and analytics tools,            family life. But the TV business         Communications, Media  Technology.
which are beginning to enable new          overall may be unrecognizable—           He is based in Milan.
forms of cross-screen targeting            certainly when compared to the           marco.vernocchi@accenture.com
and measurement. To a large extent,        operating models and industry
digital removes the guesswork              makeup that prevail today.
	11
Public Service




Coup d’état

Radically rethinking
public services
By Bernard Le Masson, Brian J. Moran and Steve Rohleder


As they attempt to square public service demand against supply, governments worldwide
must do more, better, with less. To be successful, they need to overthrow old ideas and
embrace the next generation of tools and ways of working.


12	    Outlook 2013, Number 1
13
Public Service




                                 Consider this: If 10 key countries        business-as-usual level of public-
                                 increased their aggregate public-         service delivery.
                                 sector efficiency a mere 1 percent
                                 a year, they would collectively save      Our findings are sobering. Through
                                 nearly $2 trillion annually by 2025.      2025, the gap between expected
                                                                           demand for public services and
                                 But to do this, these same countries      government’s ability to meet it
                                 must identify and achieve substantial     in these countries ranges from
                                 cost savings. According to Accenture      $10 billion in Singapore to nearly
                                 research, by 2025, the gap between        a trillion dollars in the United States
                                 expected demand for services in           (see chart, page 16). Expressed in
                                 these 10 countries and the ability        terms of GDP, the shortfalls range
                                 to pay for them is projected to total     from 1.3 percent in Italy to 5.4
                                 $1.6 trillion.                            percent in the United Kingdom.

                                 Today’s political and economic reali-     It is clear, in the words of the OECD,
                                 ties are putting enormous demands         that the “fiscal positions in many
                                 on public services throughout the         countries [are] unsustainable.”
                                 world. Aging populations, growing
                                 fiscal uncertainties and rising citizen   Given current budget situations in
                                 expectations have put governments         many countries, these expenditure
                                 worldwide in unsustainable positions.     gaps are simply not viable. Worse,
                                 For example, already high govern-         most citizens already consider
                                 ment debt in countries in the OECD        public-service levels inadequate.
                                 ballooned by some 30 percent of GDP       A 2012 Ipsos MORI/Accenture
                                 between 2007 and 2011.                    survey shows that only 36 percent of
                                                                           citizens across all 10 countries are
                                 Citizens’ expectations—in many cases,     either very or even fairly satisfied
                                 conditioned by their experiences as       with public services. In other words,
                                 customers of best-in-class private-       the delivery gap is actually larger
                                 sector players—have shifted               than these funding shortfalls suggest
                                 significantly in recent years, and        because most governments already
                                 the public sector has often been slow     fail to meet citizen expectations.
                                 to accommodate these changing
                                 attitudes. At the same time,              Shifting gears
                                 governments must contend with             But governments can do better.
                                 dwindling resources as tax revenues       In the course of extensive work in
                                 remain stagnant in countries still        the public sector, Accenture has
                                 hampered by underperforming               identified four paradigm-breaking
                                 economies, rising expenses and, for       shifts governments can make to
                                 many, an inability to provide the         close major funding gaps while
                                 comprehensive service solutions           delivering higher levels of service.
                                 their citizens want.
                                                                           •  hift from offering standardized
                                                                             S
                                 To better understand the fundamental       to personalized services.
                                 disconnect between what govern-
                                 ments are being asked to achieve          •  eplace reactive approaches with
                                                                             R
                                 through public services and what’s         insight-driven ones.
                                 actually possible, Accenture launched
                                 a research program across 10 major        •  ove from standard public
                                                                             M
                                 countries focused on the economic          management techniques to
                                 impact of maintaining the current          a public entrepreneurship style.
14	     Outlook 2013, Number 1
www.accenture.com/Outlook




•  eplace piecemeal efficiency
  R                                     countries we surveyed could reduce
 improvements with a holistic           public spending by approximately
 “mission productivity” mindset.        7 percent by 2025. A full 1 percent
                                        annual efficiency gain would cut
The rewards for making these shifts     public spending requirements by
are potentially huge. Using 2010 data   13.5 percent over the same period.
as a baseline, Oxford Economics         The United States alone could save
projected that an overall public-       as much as $995 billion by 2025 by
service efficiency gain of half         increasing public-sector efficiency
a percent per year across the 10        by just 1 percent a year.




One size does not fit all: Personalizing services
Traditional public services often       Governments can provide
follow a one-size-fits-all model:       personalized services using fewer
Governments pour resources into         resources by taking advantage
a standard mold to produce the          of new technology and organiza-
same public services for everyone.      tional design to make it easier for
Unfortunately, simply funneling         service providers to collaborate. The
more resources into the mold            Istituto Nazionale della Previdenza
to improve service levels does          Sociale, the main Italian welfare
not typically produce the desired       agency, has organized its services
results. Data from OECD member          around the citizen. Users submit
states shows that even massive          a single request and regardless
spending increases for standardized     of how many subsidiary agencies
education services, for example,        are involved, the INPS and local
do not necessarily lead to better       authorities collaborate to address
outcomes in areas such as               the user’s needs. Personalization
reading scores.                         can also reduce the cost to deliver
                                        services via better-targeted, more
This standardized services model        preventative approaches.
stands in sharp contrast to the “mar-
ket-of-one” evolution in the private    Effective public-service personal-
sector, which has allowed commercial    ization depends on three actions.
organizations to serve customers
better at reduced costs. The personal
computer industry has embraced          Develop deep citizen insights
the market-of-one concept of mass
customization for years, enabling       These should form the core of
customers to “spec” their machine       personalization initiatives. While
with a wide variety of performance      the public sector has cautiously
options and accessories. To drive       embraced advanced analytics to
productivity, governments must          improve service, several examples
shift to this same model of personal-   already illustrate how “rich data”
ized services. This implies design-     can provide insights and guide
ing services in partnership with        actions in public services.
citizens—and delivering them in
integrated ways to provide exactly      New York City’s Health and Human
what’s needed, when and in the most     Services developed a program that
appropriate manner.                     employs advanced data management
	15
Public Service




                                                          methods to create a comprehensive,          Services. This measure decreased
                                                          cost-effective view of a citizen’s          administrative overhead and will
                                                          interactions with city services.            deliver efficiencies of $140 million
                                                          Caseworkers across agencies can             over four years.
                                                          use the information collaboratively
                                                          to create tailored services for             The government of Maharashtra,
                                                          families or individuals.                    India’s second most populous state,
                                                                                                      is at the forefront of implementing
                                                                                                      the Aadhaar (UID) project that
                                                          Design citizen-centered services            will ensure the delivery of benefits
                                                                                                      more efficiently. To date, 40 million
                                                          Greater personalization requires            residents have been enrolled. By
                                                          governments to put citizens at              reducing database duplication,
                                                          the center of service design. As            the state is projected to achieve
                                                          outlined in the Driving Efficiency          savings of up to 25 percent.
                                                          report in the Australian govern-
                                                          ment’s 2011–2012 budget, Canberra           Designing citizen-centered services
                                                          supported the development of                implies a much greater level of
                                                          ICT systems that make it easier             integration, but so far, many initia-
                                                          for customers to access Centrelink,         tives have simply been “bolted on”
                                                          Medicare and Child Support                  as a way of bypassing entrenched




Deeper in the red
The expenditure gaps—the difference between the demand for public services and the ability to pay for them—by 2025
across 10 countries are expected to range from $10 billion in Singapore to as much as $940 billion in the United States.



                                          Total public-                                                              Annual percentage
                                          service expenditure,      Expenditure gap by      Expenditure gap as a     increase in efficiency to
 Country                                  in US $ billion           2025, in US $ billion   percent of GDP in 2025   close the expenditure gap

 Australia                                      $419                        $50                      3.0                       0.91

 Brazil                                         $915                        $70                      1.9                       0.57

 Canada                                         $724                        $90                     4.1                        0.92

 France                                        $1,281                      $100                      3.3                       0.58

 Germany                                      $1,402                        $80                      2.0                       0.42

 India                                          $501                        $70                      1.5                       1.11

 Italy                                          $873                        $30                      1.3                       0.25

 Singapore                                       $53                        $10                      2.3                       1.40

 United Kingdom                                $1,016                      $170                     5.4                        1.25

 United States                                 $7,328                      $940                     4.4                        1.00


Note: Economic modeling used 2010 data.
Source: Oxford Economics, 2012

16	          Outlook 2013, Number 1
www.accenture.com/Outlook




departmental and jurisdictional        Delivery of Services Bill in
structures. In the future, govern-     2011, which, if enacted, would
ments need to integrate these          direct every government agency
fragmented structures so that          to deliver all public services
public services are centered on the    electronically.
holistic needs of citizens.
                                       In the future, citizens will
                                       become more involved in the
Engage citizens as service             design of their own public services,
design partners                        and governments will begin to treat
                                       them as genuine partners. Fredericia
Personalization gives citizens         Kommune, a local authority in
more power to determine how            Denmark, has developed preventative
they are served. Enabling citizen      solutions that enable older citizens
participation in cost-effective        to live independently at home, thus
ways requires a strong set of          reducing the need for institutional
online digital services, and for-      care. By emphasizing health
tunately, many governments are         education, enablement and smart
already on this path. One survey       home-based technologies, the
indicates that more than 60            initiative is generating significant
countries currently have online        savings. Approximately 43 percent
“e-participation” policies, which      of participating patients now become
focus on the use of information        self-sufficient compared with only
and communications technologies        5 percent three years ago, generating
in national government and             annual savings of approximately
governance processes. India, for       $2.7 million, or 14 percent of the
example, introduced the Electronic     authority’s total budget.




Tomorrow’s services today:
Adopting insight-driven approaches
Governments will soon shift out        Collaborate and cooperate
of their reactive postures and
embrace insights that enable them      Effective cross-agency collaboration
to anticipate the public-service       often requires strategic information-
needs of citizens. Why? The global     sharing programs. In one example
pace of change has accelerated         from the public safety field, Europol,
and become more volatile and dis-      the European Union law enforcement
ruptive, making reactive approaches    agency, has established centralized
obsolete. Adopting an insight-driven   capabilities for data matching that
public-service strategy will allow     can identify the nature of criminal
governments to predict tomorrow’s      activity affecting multiple countries.
service needs and cost-effectively     What’s more, Europol’s Secure
provide the resources required to      Information Exchange Network
meet them.                             Application (SIENA) is one of a small
                                       number of secure international
To make the shift to insight-driven    police systems, connecting all major
management, governments should         police forces in Europe on the same
focus on the following priorities.     platform. What’s unique about
	17
Public Service




                                 SIENA is that it complies with all legal   ities from the bottom up without
                                 data protection and confidentiality        major input from above.
                                 requirements and as a result ensures
                                 that member countries can exchange
                                 sensitive information securely.            Adopt “emergent identity”
                                                                            services

                                 Share insights effectively                 With identity theft and fraud
                                                                            rampant worldwide, governments
                                 Getting the right information to           need more reliable ways to ensure
                                 decision makers—whether police,            that citizens are who they say they
                                 caseworkers, border agents or              are. In 2012, Amsterdam Airport
                                 citizens—when and where they               Schiphol piloted an automated
                                 need it while safeguarding privacy         border control system featuring
                                 rights is an essential element             facial recognition technology that
                                 of any insight-driven strategy.            compares passenger identities
                                 For police and defense forces in           against the digital photographs in
                                 particular, mobile devices coupled         their passports. The system can
                                 with efficient information-sharing         also identify forged passports and
                                 solutions enable those on the              recognize people who may be on
                                 ground to organize complex activ-          an authority’s “wanted” list.




                                 Public entrepreneurship:
                                 Focusing on value creation
                                 Governments today are underutilizing       Beyond needed policy and legislation
                                 existing public-sector talent that         changes that should, for example,
                                 could help them make the transition        emphasize such areas as education
                                 to “public entrepreneurs.” Making          and workforce development, the shift
                                 this shift can help governments            to public entrepreneurship requires
                                 drive much-needed sustainable              governments to do three things.
                                 job creation and long-term growth
                                 in the current tough economic
                                 environment. Public entrepreneurs          Collaborate to boost impact
                                 focus on creating value, forging
                                 new relationships, collaborating           Public entrepreneurs have a
                                 across traditional boundaries and          number of options for building
                                 breaking through organizational            collaborative partnerships that can
                                 silos to get things done. They             multiply the impact of initiatives.
                                 partner to deliver value and take          Using new delivery and organiza-
                                 calculated risks, understanding            tional models can drive innovation
                                 that while some efforts may fail,          and stimulate better economic
                                 others will not.                           outcomes; these efforts often
                                                                            involve spinning entities out of
                                 The shift to public entrepreneurship       the public sector.
                                 repurposes the machinery of govern-
                                 ment to stimulate economic outcomes,       For example, in the United Kingdom,
                                 collaborate and multiply the impact        one healthcare center that converted
                                 of government investments.                 to an employee-owned mutual
18	     Outlook 2013, Number 1
www.accenture.com/Outlook




organization in 2008 reported                                  involvement, Mexican central, state                         to compete globally, the efforts
productivity gains of 20 percent                               and local governments are recasting                         are unlikely to succeed. Given the
in 2009; the quality of clinical                               the city center as a hub for the                            complexity inherent in the skills
outcomes improved or was                                       digital media industry with a goal                          development challenge, coordination
sustained as well. The greater                                 of providing employment for 30,000                          among the public, private and social
autonomy enjoyed by employees                                  people while building an environ-                           sectors1 is critical.
under the mutual model drove                                   mentally sustainable creative culture
these productivity improvements.                               that can provide a better quality of                        However, a recent Accenture survey
                                                               life for the local population.                              of European decision makers found
Some countries are creating public/                                                                                        that although organizations from
private collaborations that harness                                                                                        all three sectors believe that such
technologies to drive both economic                            Develop labor pool skills                                   collaboration is essential, less than
and social outcome improvements.                                                                                           20 percent are working together on
One example is a major redevelop-                              Public entrepreneurs can attempt                            skills issues with players in the other
ment effort in Guadalajara, Mexico.                            to help businesses flourish, but if                         sectors. Public entrepreneurs can
With significant private-sector                                a nation’s workforce lacks the skills                       address this shortcoming by building

1
    S
     ituated between the public and private sectors, the social sector includes cooperative organizations, nonprofits and charities.




Big savings
If the 10 countries listed below were able to improve efficiency in the delivery
of public services by just 1 percent per year, they would save a combined total of
almost $2 trillion by 2025 annually.

Savings in US$ billions


                                             Estimated 0.5%                        Estimated 1%
     Country                                 efficiency improvement                efficiency improvement

     Australia                                        $30                                   $58

     Brazil                                           $63                                  $122

     Canada                                           $51                                   $99

     France                                           $91                                  $177

     Germany                                          $99                                  $192

     India                                            $34                                   $66

     Italy                                            $62                                  $121

     Singapore                                         $4                                    $7

     United Kingdom                                   $72                                  $139

     United States                                   $514                                 $995


     Total                                          $1.02 trillion                        $1.98 trillion


Source: Oxford Economics, 2012

	19
Public Service




For further reading                 coalitions and partnerships between       of streetlight that reduced running
                                    businesses, public agencies and           costs and associated carbon footprint
“Singapore Ministry of Finance:     not-for-profit players to provide the     levels by 33 percent.
Shared Services,” Accenture 2012    labor skills needed for the future.
http://www.accenture.com/sg-en/                                               Governments can also make better
Pages/success-singapore-ministry-   Accenture’s own Skills to Succeed         use of the data they collect. For
finance-shared-services.aspx        initiative provides an example of this    example, “data mashing” enables
                                    approach. By the end of fiscal 2011,      agencies to merge public informa-
For more related content,           the initiative had equipped more than     tion with different types of data
please visit www.accenture.com.     160,000 people worldwide—two-thirds       to produce new products and
                                    of the way to the goal of training a      services that they then can sell.
                                    quarter of a million people—with the      In Denmark, Geomatic, a private
                                    workplace and entrepreneurial skills      company, uses government data to
                                    they need to get a job or build a busi-   develop market insights that they
                                    ness. Partners in the Skills to Succeed   sell to clients for marketing and
                                    initiative include the International      strategy development purposes.
                                    Federation of Red Cross and Red
                                    Crescent Societies, Junior Achieve-       Another opportunity: using tech-
                                    ment, Plan, Save the Children and         nology to simplify interactions
                                    Youth Business International.             between business and government.
                                                                              One leading example is Norway’s
                                                                              Altinn portal, which provides a
                                    Introduce intelligent stewardship         single connecting platform to cover a
                                                                              whole range of government agencies.
                                    Governments have many ways                Through Altinn, small and medium-
                                    to capitalize more fully on the           size enterprises can obtain informa-
                                    resources they manage. They can,          tion and submit applications without
                                    for example, use their sizable            having to contend with multiple
                                    procurement budgets to catalyze           authorities at different administrative
                                    innovation. Near Dublin, the Dún          levels. Between 2008 and 2026, the
                                    Laoghaire-Rathdown County                 government expects Altinn to save
                                    Council invited teams of academics        Norwegian businesses approximately
                                    and businesses to bid for a low-          $1.6 billion through data handling
                                    energy street-lighting contract. The      cost savings and the more efficient
                                    winning bid involved a new kind           use of time.




                                    Optimal efficiency:
                                    Encouraging a ”mission productivity” mindset
                                    Instead of pursuing piecemeal             public sector’s considerable scale
                                    attempts to improve efficiency,           and assets.
                                    governments need to shift to
                                    a holistic “mission productivity”         Savings from these actions could
                                    mindset that embraces broad,              be substantial. Oxford Economics
                                    integrated thinking to prioritize         estimates that if the United States
                                    and manage initiatives better.            achieved annual 0.5 percent
                                    They must also take steps                 efficiency gains, it would realize
                                    to eliminate service delivery             more than $500 billion annually in
                                    duplications and make use of the          savings by 2025 (see chart, page 19).
20	     Outlook 2013, Number 1
www.accenture.com/Outlook




To capture such gains, governments       By restructuring core functions         massive opportunities to make
should pursue three courses of action.   through consolidation and               public services more effective and
                                         collaboration, governments can          efficient. Leaders must realize,
                                         drive considerably higher levels of     however, that the four shifts
Focus on outcomes                        public-service productivity through     described here will require a
                                         economies of scale and scope,           reformist’s zeal and a true commit-
This will require governments to         which can dramatically reduce           ment to significant change.
introduce performance management         overhead costs and duplication.
approaches that prioritize services      In a notable example, Service           While undoubtedly difficult,
based on desired outcomes. While         Canada merged more than 70              these shifts can help governments
full-scale prioritization efforts        services from multiple agencies—        worldwide resolve today’s seemingly
can be difficult, their impact can       from the Canada Pension Plan and        intractable public-service problems
be profound: In Sweden, a priority       Old Age Security to Employment          while effectively positioning them
review during the 1990s reduced          Insurance—into a single customer        to meet the needs of tomorrow’s
average departmental spending            service organization. The program       citizens.
by 11 percent, helping to move           saved more than $265 million in
from a budget deficit of 10 percent      its first year alone.
into a 1.9 percent surplus within                                                About the authors
four years.
                                         Introduce operationally                 Bernard Le Masson is the management
Some public-service organizations        excellent administration                consulting managing director for
have increasingly adopted                practices                               Accenture Health  Public Service.
performance management to drive                                                  He is based in Paris.
improved outcomes. While this is a       These will support and enable more      bernard.le.masson@accenture.com
good start, we believe they should       productive core functions in two
also use performance systems to          ways. First, public entrepreneurs       Brian J. Moran is the managing
drive continuous improvements            should fully exploit government scale   director of Accenture’s Public Service
in the value of investments. This        to drive efficiencies. New Zealand’s    Operations  Management group.
approach requires a budgeting            government agencies, by jointly         He is based in Cleveland.
process that rewards outcome             purchasing supplies and services        brian.j.moran@accenture.com
delivery and shifts away from            such as vehicles, office supplies,
inflation-based budget adjustments.      air travel and legal services, are      Steve Rohleder is the group chief
South Korea has developed a unique       expected to save almost $300 mil-       executive of Accenture Health  Public
performance management mechanism         lion over the next few years.           Service. He is based in Austin, TX.
whereby all public agencies must                                                 stephen.j.rohleder@accenture.com
regularly review their programs          Second, they should make better
through self-assessments focused         use of existing assets. For instance,
on total cost. Programs that are         government agencies in Singapore
rated ineffective face 10 percent        developed a shared human resources,
budget cuts.                             finance and procurement system
                                         to provide support to 15 agencies
                                         and 17,000 users. Over its lifespan,
Restructure core functions               the system is expected to help
                                         cut the cost of IT infrastructure
The second main thrust for               by 30 percent.
optimizing efficiency involves
the core functions of government
agencies. Worldwide, public services     Governments worldwide face
are delivered in highly fragmented       daunting public-service challenges.
ways. For example, New York              But with the right approach, we
State alone has nearly 5,000 local       believe they can overcome these
government entities.                     obstacles by tapping into the
	21
Accenture outlook-journal-february-2013
Strategy




Cross-industry ecosystems

Growth outside
the box
By Cedric Vatier


To reap future growth benefits, companies must smash through the traditional
confines of industry walls to seek collaborative opportunities that stretch across
multiple business sectors.




	23
Strategy




                                    Are industries obsolete?               Consider, for instance, how Apple
                                                                           leads an ecosystem that spans
                                    Until recently, the concept of         at least four industries—personal
                                    standalone industries made sense.      computers, consumer electronics,
                                    From the Industrial Revolution on,     information and communications—
                                    the world’s economy has consisted      and now encompasses even
                                    of dozens of compartmentalized         more, such as music and TV
                                    collections of companies, each         (see chart, page 27).
                                    serving its own markets, teaming
                                    up with its own suppliers and          Breaking out
                                    pursuing its own ways of capturing     Because of today’s advanced
                                    value. In more settled times, this     connectivity solutions and value-
                                    paradigm worked well; staying          laden emerging markets, many
                                    within an industry’s established       companies have never been better
                                    lines of business and ways of doing    positioned to engage in multi-industry
                                    things made competition compara-       collaborations. But few have broken
                                    tively straightforward and was         out of the static industry box.
                                    the normal path to profitability.
                                    In fact, lacking today’s digital       They had better figure out a way
                                    means to change the game or global     to do so soon. Several Accenture
                                    opportunities to form new business     studies suggest that future growth
                                    models, breaking out of the industry   opportunities will increasingly
                                    box was all but impossible.            emerge outside a company’s
                                                                           traditional business. And each of
                                    Today, however, disruptions in         these opportunities will require
                                    everything from the flow of raw        disruptive new approaches and
                                    materials to the nature of end         collaborative models.
                                    markets have conspired to knock
                                    even well-rooted industries off-       Meanwhile, the new competitive
                                    kilter. Fortunately, companies have    dynamics will be shaped by
                                    a variety of technology-enabled        two important factors. The first
                                    ways to smash through the confines     is collectively known as Big
                                    of industry walls and unlock           Data—increasingly vast pools
                                    new value-laden synergies in           of information that empower
                                    pursuit of collaborative opportu-      companies to link previously
                                    nities that stretch across multiple    distinct industries.
                                    business sectors.
                                                                           But even though Big Data is blazing
                                    Welcome to the bold new world of       countless fresh paths to growth, in
                                    business ecosystems, a term first      many cases, companies need new
                                    coined two decades ago by James F.     ecosystem partners to pursue them.
                                    Moore, an expert on leadership and     These cohorts can help make up for
                                    change in large-scale systems, in      a lack of internal competence or
                                    a Harvard Business Review article.     provide access to information. What’s
                                    Instead of being rigidly grouped       more, the intimate knowledge housed
                                    around a specific business or branch   in an organization’s customer
                                    of manufacturing, ecosystems           databases can open potential new
                                    draw together mutually supportive      revenue streams beyond a company’s
                                    companies from multiple industries     core business.
                                    that collectively seek to create
                                    differentiated offerings and capture   The pursuit of new business oppor-
                                    value they could not reach alone.      tunities depends on the availability
24	        Outlook 2013, Number 1
www.accenture.com/Outlook




of increasingly scarce financing,            Emerging markets are expected
which is the second factor shaping           to drive up to 70 percent of
the new competitive dynamics. This           future growth for multinational
scarcity, along with the instability         corporations. But penetrating
in financial markets, is spurring            these markets can present serious
the emergence of innovative ways             obstacles for most companies.
for companies to obtain the capital          In many cases, organizations
they need.                                   will need to develop innovative
                                             business models to meet specific
At the same time, burgeoning                 local market needs.
public debt is forcing governments
to reposition themselves as project          Leading companies no longer view
initiators that depend on outside            environmental concerns as a barrier
sources of funding when it comes             to growth, seeing them instead
to public-sector procurement (see            as opportunities to be pursued
sidebar, below). Sharing costs               with partner enterprises. The new
and risks has therefore become               sources of growth being created by
a necessity for both private- and            environmental issues often require
public-sector companies.                     a collaborative strategy that crosses
                                             industries. For example, offerings
For these new multi-industry                 focused on energy efficiency are
collaborations, opportunities will be        already being created by ecosystems
found in three broad areas: emerging         of energy providers, technology
markets, the environment and                 providers, construction companies
maturing Western markets.                    and more.




  Collaborating for cash
  Although originally, multiparty, cross-industry collaboration mainly consisted
  of public-private partnerships, it actually encompassed a wide variety of
  different models. More than half of these partnerships in emerging countries
  between 1990 and 2001 involved cooperation between the government and
  the private sector that was limited to the founding contract. These agreements
  also included technical and quality objectives, although they were secondary
  to the initial issue of financing.

  Today, traditional public-private partnership contracts are considered
  too complex; they are also considered inflexible because they lock partici-
  pants in for extended periods (often 20 to 60 years), making it extremely
  difficult to adapt to unexpected shifts in technology or environmental
  concerns. In the area of municipal services, however, an entirely different
  approach is emerging.

  A number of “smart city” initiatives reflect renewed interest in both public-
  private and private-private partnerships based on simple and innovative
  collaborative business models. These partnerships provide innovative ways
  for cities and their stakeholders to work together to access the resources
  needed to effect change (see story).


	25
Strategy




                                    Maturing Western markets still            Better Place wants to introduce
                                    contain significant numbers of            a totally new transportation
                                    sophisticated, affluent consumers.        business model by positioning
                                    Instead of writing off these markets,     itself as the provider of an end-to-
                                    companies need to capture value by        end network and service solution
                                    pursuing new sources of competitive       for electric vehicles. The company
                                    differentiation. Positioning an           has established an ecosystem
                                    organization as an innovative market      that links public authorities,
                                    disruptor can be both risky and           which support development
                                    difficult, but it remains one of the      through tax credits; automakers,
                                    best ways to generate significant         which develop EV technology;
                                    profitable growth.                        battery suppliers; energy suppliers;
                                                                              and investors.
Positioning an                      Disruptive business models
                                    These growth opportunities have           At the same time, disruptive
organization as an                  been spotted by a number of               initiatives involving multiple
innovative market                   organizations that have already           industries are transforming the
                                    seen the benefits of collaboration        way we travel. Some ecosystems
disruptor is one                    and have created cross-industry           have already successfully deployed
of the best ways to                 ecosystems.                               tools like location-based smartphone
                                                                              apps in airports. The “My Way
generate significant                Consider so-called smart cities.          Aéroports de Paris” smartphone
                                    In the Netherlands, the city of           app enables Paris-Charles de
profitable growth.                  Amsterdam teamed with energy              Gaulle Airport terminals and
                                    network company Alliander,                Android smartphone providers
                                    telecom operator KPN and city-            to collaborate to help travelers
                                    affiliated agency Amsterdam               navigate their way to airport shops,
                                    Innovation Motor (AIM) to create          restaurants, parking terminals
                                    an experimental cross-industry            and, ultimately, their flights.
                                    public-private ecosystem to reduce
                                    the city’s carbon footprint. Looking      Other companies could develop
                                    beyond a basic commitment to              ecosystems using location-based
                                    funding clean infrastructure, the         technology as well. Clothing retailer
                                    project partners built a platform where   Gap, for instance, in partnership
                                    a diverse array of different-size         with a credit-card company, has
                                    companies can share expertise and         introduced the Gap Mobile4U
                                    jointly lead projects to improve urban    location-based service for text-
                                    living, working and mobility, and, at     enabled mobile phones, which
                                    the same time, reduce the impact these    sends Gap customers text messages
                                    projects have on the environment.         with personal offers for deals at
                                                                              the nearest store.
                                    Electric vehicles also offer a
                                    compelling illustration of how            More generally, highly diverse
                                    cross-industry ecosystems can             segments of the population have
                                    usher in major paradigm shifts.           come to expect uninterrupted
                                    Better Place, a venture capital-backed    connectivity and virtual interaction.
                                    company, is structuring a new             As a result, consumers no longer
                                    collaboration that ranges from the        perceive travel as a solitary
                                    development of EVs with removable         experience; regardless of age or
                                    batteries by automakers to the            whether their trip is for business
                                    installation of networks of battery       or pleasure, today’s travelers want
                                    charging and swapping stations.           to be connected throughout their
26	        Outlook 2013, Number 1
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013
Accenture outlook-journal-february-2013

More Related Content

What's hot

The green telco business gsma bali 12 12-2012
The green telco business gsma bali 12 12-2012The green telco business gsma bali 12 12-2012
The green telco business gsma bali 12 12-2012Dr. Riant Nugroho
 
2012 toolkit
2012 toolkit2012 toolkit
2012 toolkitsweetyicy
 
Rethinking Relationships in a Global Economy
Rethinking Relationships in a Global EconomyRethinking Relationships in a Global Economy
Rethinking Relationships in a Global EconomyFindWhitePapers
 
The Great Indian Brand Summit
The Great Indian Brand SummitThe Great Indian Brand Summit
The Great Indian Brand Summittalees
 
People's Insights Quarterly Magazine Volume 2 Issue 1
People's Insights Quarterly Magazine Volume 2 Issue 1People's Insights Quarterly Magazine Volume 2 Issue 1
People's Insights Quarterly Magazine Volume 2 Issue 1MSL
 
Branding in Banking & Finance | P Collings 2011
Branding in Banking & Finance | P Collings 2011Branding in Banking & Finance | P Collings 2011
Branding in Banking & Finance | P Collings 2011Patrick Collings
 
More with Less: Scaling Sustainable Consumption and Resource Efficiency
More with Less: Scaling Sustainable Consumption and Resource EfficiencyMore with Less: Scaling Sustainable Consumption and Resource Efficiency
More with Less: Scaling Sustainable Consumption and Resource EfficiencySustainable Brands
 
Social utilities- Going beyond likes and followers
Social utilities- Going beyond likes and followersSocial utilities- Going beyond likes and followers
Social utilities- Going beyond likes and followersDominika Tomek
 
AFCI Brochure Q4 11
AFCI Brochure Q4 11AFCI Brochure Q4 11
AFCI Brochure Q4 11trking11
 
Indian Premier League: Still a Smash Hit for Advertisers?
Indian Premier League: Still a Smash Hit for Advertisers?Indian Premier League: Still a Smash Hit for Advertisers?
Indian Premier League: Still a Smash Hit for Advertisers?MSL
 
Maximizing Return On Innovation
Maximizing Return On InnovationMaximizing Return On Innovation
Maximizing Return On InnovationInfosys
 
Demand Driven Marketing. By Greg Banks. Available On Linked In. February 2011.
Demand  Driven Marketing. By Greg Banks. Available On Linked In. February 2011.Demand  Driven Marketing. By Greg Banks. Available On Linked In. February 2011.
Demand Driven Marketing. By Greg Banks. Available On Linked In. February 2011.banksgreg
 
Etude PwC sur les entreprises japonaises (2012)
Etude PwC sur les entreprises japonaises (2012)Etude PwC sur les entreprises japonaises (2012)
Etude PwC sur les entreprises japonaises (2012)PwC France
 
February credentials tamarindo
February credentials   tamarindoFebruary credentials   tamarindo
February credentials tamarindoAdam Barber
 
Earning the SME dialogue
Earning the SME dialogueEarning the SME dialogue
Earning the SME dialogueOmobono
 
Clusters and development agencies in crisis times. ppp, the answer.
Clusters and development agencies in crisis times. ppp, the answer.Clusters and development agencies in crisis times. ppp, the answer.
Clusters and development agencies in crisis times. ppp, the answer.TasoCluster.net
 
Innovation Entrepreneur
Innovation EntrepreneurInnovation Entrepreneur
Innovation Entrepreneurtbrajeev30
 
The digital advantage How digital leaders outperform their peers in every ind...
The digital advantage How digital leaders outperform their peers in every ind...The digital advantage How digital leaders outperform their peers in every ind...
The digital advantage How digital leaders outperform their peers in every ind...Nicola Barozzi 🚘✔
 

What's hot (20)

The green telco business gsma bali 12 12-2012
The green telco business gsma bali 12 12-2012The green telco business gsma bali 12 12-2012
The green telco business gsma bali 12 12-2012
 
2012 toolkit
2012 toolkit2012 toolkit
2012 toolkit
 
Rethinking Relationships in a Global Economy
Rethinking Relationships in a Global EconomyRethinking Relationships in a Global Economy
Rethinking Relationships in a Global Economy
 
The Great Indian Brand Summit
The Great Indian Brand SummitThe Great Indian Brand Summit
The Great Indian Brand Summit
 
People's Insights Quarterly Magazine Volume 2 Issue 1
People's Insights Quarterly Magazine Volume 2 Issue 1People's Insights Quarterly Magazine Volume 2 Issue 1
People's Insights Quarterly Magazine Volume 2 Issue 1
 
Branding in Banking & Finance | P Collings 2011
Branding in Banking & Finance | P Collings 2011Branding in Banking & Finance | P Collings 2011
Branding in Banking & Finance | P Collings 2011
 
More with Less: Scaling Sustainable Consumption and Resource Efficiency
More with Less: Scaling Sustainable Consumption and Resource EfficiencyMore with Less: Scaling Sustainable Consumption and Resource Efficiency
More with Less: Scaling Sustainable Consumption and Resource Efficiency
 
Social utilities- Going beyond likes and followers
Social utilities- Going beyond likes and followersSocial utilities- Going beyond likes and followers
Social utilities- Going beyond likes and followers
 
AFCI Brochure Q4 11
AFCI Brochure Q4 11AFCI Brochure Q4 11
AFCI Brochure Q4 11
 
Indian Premier League: Still a Smash Hit for Advertisers?
Indian Premier League: Still a Smash Hit for Advertisers?Indian Premier League: Still a Smash Hit for Advertisers?
Indian Premier League: Still a Smash Hit for Advertisers?
 
Maximizing Return On Innovation
Maximizing Return On InnovationMaximizing Return On Innovation
Maximizing Return On Innovation
 
The Co-creation Connection
The Co-creation ConnectionThe Co-creation Connection
The Co-creation Connection
 
Demand Driven Marketing. By Greg Banks. Available On Linked In. February 2011.
Demand  Driven Marketing. By Greg Banks. Available On Linked In. February 2011.Demand  Driven Marketing. By Greg Banks. Available On Linked In. February 2011.
Demand Driven Marketing. By Greg Banks. Available On Linked In. February 2011.
 
Etude PwC sur les entreprises japonaises (2012)
Etude PwC sur les entreprises japonaises (2012)Etude PwC sur les entreprises japonaises (2012)
Etude PwC sur les entreprises japonaises (2012)
 
February credentials tamarindo
February credentials   tamarindoFebruary credentials   tamarindo
February credentials tamarindo
 
Earning the SME dialogue
Earning the SME dialogueEarning the SME dialogue
Earning the SME dialogue
 
Clusters and development agencies in crisis times. ppp, the answer.
Clusters and development agencies in crisis times. ppp, the answer.Clusters and development agencies in crisis times. ppp, the answer.
Clusters and development agencies in crisis times. ppp, the answer.
 
Innovation Entrepreneur
Innovation EntrepreneurInnovation Entrepreneur
Innovation Entrepreneur
 
Earth Enterprise Tool Kit
Earth Enterprise Tool KitEarth Enterprise Tool Kit
Earth Enterprise Tool Kit
 
The digital advantage How digital leaders outperform their peers in every ind...
The digital advantage How digital leaders outperform their peers in every ind...The digital advantage How digital leaders outperform their peers in every ind...
The digital advantage How digital leaders outperform their peers in every ind...
 

Similar to Accenture outlook-journal-february-2013

How structural collaboration leads to value propositions in the financial sector
How structural collaboration leads to value propositions in the financial sectorHow structural collaboration leads to value propositions in the financial sector
How structural collaboration leads to value propositions in the financial sectorTom De Ruyck
 
How structural collaboration leads to value propositions in the financial sector
How structural collaboration leads to value propositions in the financial sectorHow structural collaboration leads to value propositions in the financial sector
How structural collaboration leads to value propositions in the financial sectorInSites Consulting
 
Cross Industry Collaboration: Creating the enablers for disruptive models
Cross Industry Collaboration: Creating the enablers for disruptive modelsCross Industry Collaboration: Creating the enablers for disruptive models
Cross Industry Collaboration: Creating the enablers for disruptive modelswimdecraene
 
Wmu Article 7 10 09
Wmu Article 7 10 09Wmu Article 7 10 09
Wmu Article 7 10 09lancerichard
 
Directions Supplement - June eyes on_the_prize_singles
Directions Supplement - June eyes on_the_prize_singlesDirections Supplement - June eyes on_the_prize_singles
Directions Supplement - June eyes on_the_prize_singlessalterbaxter
 
Supply Chain Innovation
Supply Chain InnovationSupply Chain Innovation
Supply Chain InnovationInfosys
 
#RIS3 Know in target: Marian García
#RIS3 Know in target: Marian García#RIS3 Know in target: Marian García
#RIS3 Know in target: Marian GarcíaAgencia IDEA
 
Introducing The Open Business Program
Introducing The Open Business ProgramIntroducing The Open Business Program
Introducing The Open Business Programninety10group
 
Introducing the Open Business Program
Introducing the Open Business ProgramIntroducing the Open Business Program
Introducing the Open Business Programdavid cushman
 
Nurturing Successful Business Innovation 1
Nurturing Successful Business Innovation 1Nurturing Successful Business Innovation 1
Nurturing Successful Business Innovation 1kaimethod
 
Enterprise 2.0 & Social CRM: Together At Last
Enterprise 2.0 & Social CRM: Together At LastEnterprise 2.0 & Social CRM: Together At Last
Enterprise 2.0 & Social CRM: Together At LastPaul Greenberg
 
Reinventing the rules of engagement
Reinventing the rules of engagementReinventing the rules of engagement
Reinventing the rules of engagementIBM Software India
 
Ebes presentación definitiva.pptx
Ebes presentación definitiva.pptxEbes presentación definitiva.pptx
Ebes presentación definitiva.pptxBusinessfokus
 
The Invention Of An Invention
The Invention Of An InventionThe Invention Of An Invention
The Invention Of An InventionErin Moore
 
Strategic Thought Leadership In The New Millennium
Strategic Thought Leadership In The New MillenniumStrategic Thought Leadership In The New Millennium
Strategic Thought Leadership In The New MillenniumMoonSoup, Inc.
 
Creating a sustainable competitive advantage in the age of convergence
Creating a sustainable competitive advantage in the age of convergenceCreating a sustainable competitive advantage in the age of convergence
Creating a sustainable competitive advantage in the age of convergenceMatt Mayberry
 

Similar to Accenture outlook-journal-february-2013 (20)

How structural collaboration leads to value propositions in the financial sector
How structural collaboration leads to value propositions in the financial sectorHow structural collaboration leads to value propositions in the financial sector
How structural collaboration leads to value propositions in the financial sector
 
How structural collaboration leads to value propositions in the financial sector
How structural collaboration leads to value propositions in the financial sectorHow structural collaboration leads to value propositions in the financial sector
How structural collaboration leads to value propositions in the financial sector
 
Cross Industry Collaboration: Creating the enablers for disruptive models
Cross Industry Collaboration: Creating the enablers for disruptive modelsCross Industry Collaboration: Creating the enablers for disruptive models
Cross Industry Collaboration: Creating the enablers for disruptive models
 
Wmu Article 7 10 09
Wmu Article 7 10 09Wmu Article 7 10 09
Wmu Article 7 10 09
 
Directions Supplement - June eyes on_the_prize_singles
Directions Supplement - June eyes on_the_prize_singlesDirections Supplement - June eyes on_the_prize_singles
Directions Supplement - June eyes on_the_prize_singles
 
Supply Chain Innovation
Supply Chain InnovationSupply Chain Innovation
Supply Chain Innovation
 
#RIS3 Know in target: Marian García
#RIS3 Know in target: Marian García#RIS3 Know in target: Marian García
#RIS3 Know in target: Marian García
 
Introducing The Open Business Program
Introducing The Open Business ProgramIntroducing The Open Business Program
Introducing The Open Business Program
 
Introducing the Open Business Program
Introducing the Open Business ProgramIntroducing the Open Business Program
Introducing the Open Business Program
 
Nurturing Successful Business Innovation 1
Nurturing Successful Business Innovation 1Nurturing Successful Business Innovation 1
Nurturing Successful Business Innovation 1
 
7 Learning and outreach event on scaling-up
7 Learning and outreach event on scaling-up7 Learning and outreach event on scaling-up
7 Learning and outreach event on scaling-up
 
Enterprise 2.0 & Social CRM: Together At Last
Enterprise 2.0 & Social CRM: Together At LastEnterprise 2.0 & Social CRM: Together At Last
Enterprise 2.0 & Social CRM: Together At Last
 
Reinventing the rules of engagement
Reinventing the rules of engagementReinventing the rules of engagement
Reinventing the rules of engagement
 
Csac12[1].p
Csac12[1].pCsac12[1].p
Csac12[1].p
 
Rethinking M&A
Rethinking M&ARethinking M&A
Rethinking M&A
 
8 ifad seas of change presentation woodhill
8 ifad seas of change presentation woodhill8 ifad seas of change presentation woodhill
8 ifad seas of change presentation woodhill
 
Ebes presentación definitiva.pptx
Ebes presentación definitiva.pptxEbes presentación definitiva.pptx
Ebes presentación definitiva.pptx
 
The Invention Of An Invention
The Invention Of An InventionThe Invention Of An Invention
The Invention Of An Invention
 
Strategic Thought Leadership In The New Millennium
Strategic Thought Leadership In The New MillenniumStrategic Thought Leadership In The New Millennium
Strategic Thought Leadership In The New Millennium
 
Creating a sustainable competitive advantage in the age of convergence
Creating a sustainable competitive advantage in the age of convergenceCreating a sustainable competitive advantage in the age of convergence
Creating a sustainable competitive advantage in the age of convergence
 

More from ruttens.com

FROM STORIES to ROI… 10 STEPS FOR TRANSFORMING YOUR CUSTOMER INSIGHTS & STOR...
FROM STORIES to ROI…  10 STEPS FOR TRANSFORMING YOUR CUSTOMER INSIGHTS & STOR...FROM STORIES to ROI…  10 STEPS FOR TRANSFORMING YOUR CUSTOMER INSIGHTS & STOR...
FROM STORIES to ROI… 10 STEPS FOR TRANSFORMING YOUR CUSTOMER INSIGHTS & STOR...ruttens.com
 
INSIGHTS -> STORIES -> TRUST -> REVENUE -> ROI Your 5-phase, 25-step guide...
INSIGHTS -> STORIES ->  TRUST -> REVENUE -> ROI   Your 5-phase, 25-step guide...INSIGHTS -> STORIES ->  TRUST -> REVENUE -> ROI   Your 5-phase, 25-step guide...
INSIGHTS -> STORIES -> TRUST -> REVENUE -> ROI Your 5-phase, 25-step guide...ruttens.com
 
2020: THE RISE OF STOROI MARKETING -> From Insights to ROI: How to make data-...
2020: THE RISE OF STOROI MARKETING -> From Insights to ROI: How to make data-...2020: THE RISE OF STOROI MARKETING -> From Insights to ROI: How to make data-...
2020: THE RISE OF STOROI MARKETING -> From Insights to ROI: How to make data-...ruttens.com
 
From Insights to ROI: The rise of STOROI marketing
From Insights to ROI: The rise of STOROI marketingFrom Insights to ROI: The rise of STOROI marketing
From Insights to ROI: The rise of STOROI marketingruttens.com
 
Cv ruttens july2018
Cv ruttens july2018Cv ruttens july2018
Cv ruttens july2018ruttens.com
 
Accenture interactive: Cutting across the CMO - CIO divide - infographic
Accenture interactive: Cutting across the CMO - CIO divide - infographicAccenture interactive: Cutting across the CMO - CIO divide - infographic
Accenture interactive: Cutting across the CMO - CIO divide - infographicruttens.com
 
CMOs: Time for digital transformation or risk being left on the sidelines
CMOs: Time for digital transformation or risk being left on the sidelinesCMOs: Time for digital transformation or risk being left on the sidelines
CMOs: Time for digital transformation or risk being left on the sidelinesruttens.com
 
Accenture report-accelerating-europes-comeback-digital-opportunities-competit...
Accenture report-accelerating-europes-comeback-digital-opportunities-competit...Accenture report-accelerating-europes-comeback-digital-opportunities-competit...
Accenture report-accelerating-europes-comeback-digital-opportunities-competit...ruttens.com
 
Accenture technology vision 2014 report trends IT
Accenture technology vision 2014 report trends ITAccenture technology vision 2014 report trends IT
Accenture technology vision 2014 report trends ITruttens.com
 
Accenture global-consumer-pulse-research-study-2013-key-findings-131217014256...
Accenture global-consumer-pulse-research-study-2013-key-findings-131217014256...Accenture global-consumer-pulse-research-study-2013-key-findings-131217014256...
Accenture global-consumer-pulse-research-study-2013-key-findings-131217014256...ruttens.com
 
Mobility Survey Belgium
Mobility Survey BelgiumMobility Survey Belgium
Mobility Survey Belgiumruttens.com
 
Accenture technology-vision-2013
Accenture technology-vision-2013Accenture technology-vision-2013
Accenture technology-vision-2013ruttens.com
 
Accenture technology-vision-2013
Accenture technology-vision-2013Accenture technology-vision-2013
Accenture technology-vision-2013ruttens.com
 
Accenture monetizing-personal-touch
Accenture monetizing-personal-touchAccenture monetizing-personal-touch
Accenture monetizing-personal-touchruttens.com
 
Energizing global-growth-final
Energizing global-growth-finalEnergizing global-growth-final
Energizing global-growth-finalruttens.com
 
Accenture mobile-web-watch-internet-usage-survey-2012
Accenture mobile-web-watch-internet-usage-survey-2012Accenture mobile-web-watch-internet-usage-survey-2012
Accenture mobile-web-watch-internet-usage-survey-2012ruttens.com
 
Accenture BPO brochure 2012
Accenture BPO brochure 2012Accenture BPO brochure 2012
Accenture BPO brochure 2012ruttens.com
 
Accenture Financial Services Innovation Awards BeLux
Accenture Financial Services Innovation Awards BeLuxAccenture Financial Services Innovation Awards BeLux
Accenture Financial Services Innovation Awards BeLuxruttens.com
 
Accenture banking 2016
Accenture banking 2016Accenture banking 2016
Accenture banking 2016ruttens.com
 
Data to Insight to Action: How Analytics can drive High Performance
Data to Insight to Action: How Analytics can drive High Performance Data to Insight to Action: How Analytics can drive High Performance
Data to Insight to Action: How Analytics can drive High Performance ruttens.com
 

More from ruttens.com (20)

FROM STORIES to ROI… 10 STEPS FOR TRANSFORMING YOUR CUSTOMER INSIGHTS & STOR...
FROM STORIES to ROI…  10 STEPS FOR TRANSFORMING YOUR CUSTOMER INSIGHTS & STOR...FROM STORIES to ROI…  10 STEPS FOR TRANSFORMING YOUR CUSTOMER INSIGHTS & STOR...
FROM STORIES to ROI… 10 STEPS FOR TRANSFORMING YOUR CUSTOMER INSIGHTS & STOR...
 
INSIGHTS -> STORIES -> TRUST -> REVENUE -> ROI Your 5-phase, 25-step guide...
INSIGHTS -> STORIES ->  TRUST -> REVENUE -> ROI   Your 5-phase, 25-step guide...INSIGHTS -> STORIES ->  TRUST -> REVENUE -> ROI   Your 5-phase, 25-step guide...
INSIGHTS -> STORIES -> TRUST -> REVENUE -> ROI Your 5-phase, 25-step guide...
 
2020: THE RISE OF STOROI MARKETING -> From Insights to ROI: How to make data-...
2020: THE RISE OF STOROI MARKETING -> From Insights to ROI: How to make data-...2020: THE RISE OF STOROI MARKETING -> From Insights to ROI: How to make data-...
2020: THE RISE OF STOROI MARKETING -> From Insights to ROI: How to make data-...
 
From Insights to ROI: The rise of STOROI marketing
From Insights to ROI: The rise of STOROI marketingFrom Insights to ROI: The rise of STOROI marketing
From Insights to ROI: The rise of STOROI marketing
 
Cv ruttens july2018
Cv ruttens july2018Cv ruttens july2018
Cv ruttens july2018
 
Accenture interactive: Cutting across the CMO - CIO divide - infographic
Accenture interactive: Cutting across the CMO - CIO divide - infographicAccenture interactive: Cutting across the CMO - CIO divide - infographic
Accenture interactive: Cutting across the CMO - CIO divide - infographic
 
CMOs: Time for digital transformation or risk being left on the sidelines
CMOs: Time for digital transformation or risk being left on the sidelinesCMOs: Time for digital transformation or risk being left on the sidelines
CMOs: Time for digital transformation or risk being left on the sidelines
 
Accenture report-accelerating-europes-comeback-digital-opportunities-competit...
Accenture report-accelerating-europes-comeback-digital-opportunities-competit...Accenture report-accelerating-europes-comeback-digital-opportunities-competit...
Accenture report-accelerating-europes-comeback-digital-opportunities-competit...
 
Accenture technology vision 2014 report trends IT
Accenture technology vision 2014 report trends ITAccenture technology vision 2014 report trends IT
Accenture technology vision 2014 report trends IT
 
Accenture global-consumer-pulse-research-study-2013-key-findings-131217014256...
Accenture global-consumer-pulse-research-study-2013-key-findings-131217014256...Accenture global-consumer-pulse-research-study-2013-key-findings-131217014256...
Accenture global-consumer-pulse-research-study-2013-key-findings-131217014256...
 
Mobility Survey Belgium
Mobility Survey BelgiumMobility Survey Belgium
Mobility Survey Belgium
 
Accenture technology-vision-2013
Accenture technology-vision-2013Accenture technology-vision-2013
Accenture technology-vision-2013
 
Accenture technology-vision-2013
Accenture technology-vision-2013Accenture technology-vision-2013
Accenture technology-vision-2013
 
Accenture monetizing-personal-touch
Accenture monetizing-personal-touchAccenture monetizing-personal-touch
Accenture monetizing-personal-touch
 
Energizing global-growth-final
Energizing global-growth-finalEnergizing global-growth-final
Energizing global-growth-final
 
Accenture mobile-web-watch-internet-usage-survey-2012
Accenture mobile-web-watch-internet-usage-survey-2012Accenture mobile-web-watch-internet-usage-survey-2012
Accenture mobile-web-watch-internet-usage-survey-2012
 
Accenture BPO brochure 2012
Accenture BPO brochure 2012Accenture BPO brochure 2012
Accenture BPO brochure 2012
 
Accenture Financial Services Innovation Awards BeLux
Accenture Financial Services Innovation Awards BeLuxAccenture Financial Services Innovation Awards BeLux
Accenture Financial Services Innovation Awards BeLux
 
Accenture banking 2016
Accenture banking 2016Accenture banking 2016
Accenture banking 2016
 
Data to Insight to Action: How Analytics can drive High Performance
Data to Insight to Action: How Analytics can drive High Performance Data to Insight to Action: How Analytics can drive High Performance
Data to Insight to Action: How Analytics can drive High Performance
 

Accenture outlook-journal-february-2013

  • 1. The journal of high-performance business accenture.com/outlook | 2013, Number 1 Cross-industry ecosystems Growth outside the box PLUS Radically rethinking public services Why gamification is serious business How end-to-end sustainable systems drive value
  • 2. Outlook Outlook Vol. XXV 2013, No. 1 Outlook is published by Accenture. © 2013 Accenture. All rights reserved. Editor-in-Chief Chairman & CEO David Cudaback Pierre Nanterme Managing Editor Chief Marketing & Letitia B. Burton Communications Officer Roxanne Taylor Senior Editor Jacqueline H. Kessler For more information about Accenture, please visit Senior Contributing Editor www.accenture.com. Paul F. Nunes Contributing Editors David Light The views and opinions expressed in these Craig Mindrum articles are meant to stimulate thought and discussion. As each business has Industry Editor unique requirements and objectives, these Wendy Cooper ideas should not be viewed as professional advice with respect to your business. Contributing Writers Accenture, its logo and High Per­ ormance f Lance Ealey Delivered are trademarks of Accenture. John Kerr This document makes reference to trade- Assistant Editor marks that may be owned by others. The Carolyn Shea use of such trademarks herein is not an assertion of ownership of such trademarks Design & Production by Accenture and is not intended to repre- IridiumGroup Inc. sent or imply the existence of an association between Accenture and the lawful owners www.accenture.com/Outlook of such trademarks. This publication is printed on 10 percent post-consumer fiber.
  • 3. The Long View Bold ideas for a digital economy likely to be created through collabo- not limited to the private sector. ration, within “ecosystems” made up Caught between rising citizens’ of mutually supportive companies expectations and a looming fiscal from multiple industries. (The article crisis, many innovative local, begins on page 22.) state and national governments are experimenting with new, Another disruptive idea discussed more efficient and more effective in this issue is intended to enhance service-delivery models that can current business models rather also help close major funding gaps. than replace them—“gamification,” (This article on the public sector the application of the mechanics of begins on page 12.) digital gaming to a wide spectrum of business challenges. In fact, “Ecosystems,” “gamification,” companies across several industries “inclusive business initiatives,” Pierre Nanterme are already using the concept to “public entrepreneurship”—going Chairman & CEO encourage innovation, build more forward, we will be hearing more Accenture effective marketing campaigns about these additions to the new and retain talent (page 30). business lexicon. And I hope you As the locus of global growth find our discussion of the ideas shifts and competition intensifies, The high-growth markets of Asia, behind them useful. identifying new markets and Latin America and Africa will opportunities is not the biggest continue to be at the center of challenge facing business. The strategic thinking for most com- harder part may well turn out to panies, with particular attention be coming up with bold, new, often paid to an emerging middle class disruptive approaches and models of consumers. Here, too, innovative that are required to achieve high new models and approaches are performance in a digital economy. essential for success. In this issue of Outlook, we look One of our articles looks at “inclusive at a number of these models, some business initiatives,” enterprises of which are already proving to that partner with governments, be highly successful. NGOs and local entrepreneurs to scale innovation and boost profit- The idea explored in one article calls ability in low-income communities into question a bedrock assumption (page 38). Another looks at the about the world’s economy—that it other end of the income scale, at is structured as a relatively small China’s affluent, sophisticated number of discrete industries, urban consumers. Their behavior compartmentalized collections has changed so dramatically in of businesses that pursue value recent years that companies must be essentially on their own, in their willing to embrace unconventional own markets. The article challenges and often counterintuitive marketing this Industrial Age concept. It argues strategies to reach them (page 48). that in today’s connectivity-enabled global marketplace, value and When it comes to delivering value, differentiated offerings are more however, bold new thinking is 1
  • 4. Contents Perspective Features The Long View Public Service Strategy 1 Bold ideas for 12 Coup d’état: 22 Cross-industry a digital economy Radically rethinking ecosystems: Growth By Pierre Nanterme public services outside the box By Bernard Le Masson, Brian J. By Cedric Vatier Moran and Steve Rohleder To reap future growth As they attempt to square benefits, companies public service demand must smash through the Industry Report against supply, governments traditional confines of worldwide must do more, industry walls to seek Media Entertainment better, with less. To be collaborative opportunities 4 eyes have it: The successful, they need to that stretch across multiple Guess who controls overthrow old ideas and business sectors. embrace the next generation of the future of TV tools and ways of working. By Robin Murdoch, Youssef D. Tuma Strategy II and Marco Vernocchi 30 Why gamification is Television is about to serious business undergo the same kind of By Marco Ryan, Andy Sleigh, disruption that occurred Kai Wee Soh and Zed Li with the introduction of the smartphone. What will By using the mechanics of change when the largest digital gaming, companies screen in the home has a in a wide range of industries big say in how we consume are boosting innovation, content, information and building more effective services over the Internet? marketing campaigns and driving value. A few leading companies are making the changes demanded by sustainability science and creating competitive advantage for their businesses. “ ow end-to-end sustainable systems drive H business value” (page 58) 2 Outlook 2013, Number 1
  • 5. F or additional thought leadership from Accenture, including the Accenture Institute for High Performance and Accenture Technology Labs, please visit www.accenture.com/ideas. For a personalized electronic newsletter tailored to highlight specific industries and issues, subscribe to My Outlook at www.accenture.com/myoutlook. High-Growth Markets Sustainability Information Technology 38 Scaling innovation 58 How end-to-end 78 IT governance: for an emerging sustainable systems Spinning into control middle class drive business value By Saideep Raj, Jack Sepple and Leslie Willcocks By Raghav Narsalay and By Peter Lacy Ryan T. Coffey Plenty of companies have For today’s IT executive, Efforts to create innovations taken significant steps the job has never been more that can meet both social and toward becoming more difficult. The solution? business goals in low-income sustainable, but none has Mastering a new set of markets are fraught with turned incremental progress capabilities focused on areas unanticipated dangers. into truly transformational that are generally not part A study of 18 initiatives change. That requires of traditional IT governance. from around the world reveals innovation and collaborative how ventures can succeed initiatives right across the Business Process Outsourcing | where others have failed. enterprise—from strategy to Talent Organization operations to the supply chain. 88 asters of the mix M China By Michael J. Salvino, Walter G. 48 Meet the new Supply Chain Management Gossage and Mary Lacity Chinese consumer 68 When product The benefits of effective By Jeffrey I. Beg, Tzeh Chyi Chan complexity hurts true change management in BPO and Xuyu Chen profitability are measured at both an individual and organizational Successful consumer By Johan Sjöström Bayer, Mikael Hilding, Antal Kamps, level. Companies that are marketing in China is, in Gustaf Sahlén and Robin Sparrefors attentive to transition many ways, as much art issues and to supporting as science. It combines a To meet the challenges the retained workforce can sophisticated understanding inherent in today’s volatile drive topline benefits from of local perceptions and global marketplace, companies a more effective functional preferences with a willingness need the right analytical lens organization. to embrace unconventional to clarify the incremental strategies and the best profit generated by offering new technology. more innovative and differentiated products. 3
  • 7. Industry Report | Media Entertainment The eyes have it Guess who controls the future of TV By Robin Murdoch, Youssef D. Tuma and Marco Vernocchi Television is about to undergo the same kind of disruption that occurred with the introduction of the smartphone. What will change when the largest screen in the home has a big say in how we consume content, information and services over the Internet? Picture a typical nine-year-old her classmates and loaded into screen-viewing time. The fact is, watching TV today. She probably has her home’s cloud-based content the TV is here to stay. Its role in a tablet in her lap, ready to check out librar y. After her friends leave, delivering compelling viewing videos related to the Animal Planet she might pick up the easy-to-use experiences—collective and special she’s watching. Or perhaps TV remote to take a high-resolution individual—will continue. However, she’s borrowed her big sister’s phone tour around the Beijing neighborhood the big screen in the living room is so she can vote on this week’s episode where her big sister lives. Or maybe indeed undergoing a metamorphosis, of Dancing with the Stars. she’ll search for a favorite scene in because what goes on behind the one of the Twilight movies. screen is changing dramatically. By the time she’s old enough to head off to university, however, Good-bye to the familiar old TV set? For most of us, the TV will develop her TV viewing experience will Au contraire. For years now, the as an even more valuable vehicle be markedly richer. By then, she demise of the popular appliance for entertainment and, increasingly, may be inviting her friends over has been predicted as the Web has for education and information. But to watch the “sitcom” filmed by claimed more and more of our for business leaders up and down the 5
  • 8. Industry Report | Media Entertainment media value chain—from filmmakers continue to be so. There is still no and broadcast channels to Internet substitute for the collective viewing service providers to “last mile” experience of watching the big game communications operators—the or the season finale of a popular reinvented TV is a huge disruption. drama. Plus, the new Accenture study reveals that young people are There will be winners—businesses much more engaged with TV than that quickly grasp the nuances of might be supposed. the resulting changes in the creation, financing, production and delivery of Even 25-to-34-year-olds view, on content. But others may find them- average, almost 140 hours a month of selves facing fierce new competition. “traditional” TV programming—more Take, for instance, the pressure than 20 times as many hours as they the cable companies are facing spend watching video on the Internet from so-called over-the-top (OTT) or on their phones (see chart, page 9). providers, such as Netf lix and And nearly half of all users still sit Hulu, which send their content down in front of the TV—not their through the Internet. In short, smartphones or tablets—to watch we’re now seeing the collapse of some type of OTT video content. the walls that previously excluded Another relevant measure: YouTube new entrants to the TV business. users average five or so hours of video viewing per month—a figure So how can the TV still be relevant that is dwarfed by the time they in a tablet and smartphone age? spend in front of the TV. To be sure, TV viewing time has Bottom line: Television still has become fragmented—the result of great power to pull audiences. And busy lives that see consumers record- big changes are coming that will ing, for example, the Boardwalk continue to engage viewers. Empire episode that the school board meeting forced them to miss. And of Not too many years from now, course, “screen time” today is shared we will be able to use the TV unit with laptops, phones and tablets. to access an entire ecosystem of content—richly immersive, far more Accenture’s latest research on of it fully interactive and all of consumer viewing habits finds that it on-demand via the Internet. It fully 62 percent of TV viewers are will be easily sourced from content concurrently using a computer or catalogs and accessed with a a laptop and 41 percent are using handheld device—a next-generation a mobile phone—messaging friends smartphone, perhaps, or a dedicated about a sitcom joke or fact-checking device that is as simple and intuitive politicians’ claims, perhaps. Coupled to use as today’s remote. with the widespread availability of high-speed wireless Internet, Just as significantly, individual today’s viewing experience is more consumers, armed with high- interactive, more consumable and performance hardware and software, far more sharable in real time. will become content creators, able to provide more of what the news Dominant medium channels deliver. (Think of higher- But the truth is that the living quality versions of the public’s room screen remains a dominant mobile-phone news bulletins of communications medium, and will Hurricane Sandy’s devastation.) 6 Outlook 2013, Number 1
  • 9. www.accenture.com/Outlook At the same time, the major movie The easy answer, of course, is them prefer using genres—that is, studios are meeting the growing “technology”—from the TV hardware content types such as “spaghetti demand for premium video content. to the social media with which to Westerns,” “cartoons” and others— Look at the money pouring into share content to the cloud services as search criteria for finding new blockbusters—$150 million to produce that make it effective to store vast video content. And 43 percent prefer Skyfall, the latest James Bond film, amounts of data. The fact is, however, finding new video content by using for example, and the estimated that the consumer is the undisputed personalized recommendation $250 million spent on the newest king of content. engines that track what they’ve Batman movie, The Dark Knight watched and suggest similar content. Rises. These movies are being Over the past decade, control of engineered during original production the viewing experience has shifted In a similar vein, 28 percent of users to maximize the downstream rapidly to the one who holds the have already created video playlists opportunity in extras, web videos, remote. TiVo and many other digital on their current video services, apps and so on. And, increasingly, recording systems have made it such as Netflix and YouTube. These content is as likely to be distributed easy for people to choose when they companies make it ever easier to do by an Amazon or a Google as it is watch their favorite programs. But this, particularly by using historical to show up courtesy of Bravo. consumers also want to be able to behavior to recommend relevant personalize the services they con- viewing experiences. The story is King of content sume, with search, recommendations much the same with music services Network executives and cable and social features becoming such as Pandora and Spotify as operators don’t need to look far increasingly integrated across media. well as Amazon.com with a whole to see what is rocking their world. Accenture found that 64 percent of range of merchandise. Reinventing TV: Nine key questions for established media players There are dramatic changes in the television industry going on behind the screen (see story). Traditional media players must respond by reinventing them- selves, a process that begins with self-examination. Crucial questions for the C-suite management team include: 1. Should traditional media and entertainment companies reinvent themselves as consumer businesses? If so, how? 2. Can new digital economic models be made to work for all parts of the media value chain? 3. How might new OTT offerings threaten the subscription pay-TV giants? 4. What new types of partnerships and collaborations should media businesses consider in order to better match consumers’ new digital experience requirements? 5. Will new industry business models sustain investments in high-quality content—or will profits be channeled elsewhere? 6. How can the ad industry’s traditional players collaborate to move toward a new world of multiplatform advertising? 7. How can data and analytics be used to galvanize new business models? 8. Should traditional vertically integrated media companies resist or embrace open platforms? 9. How do content companies maximize revenue across linear and on-demand as the balance shifts toward the latter? 7
  • 10. Industry Report | Media Entertainment At the same time, consumers are This is not just about controlling becoming distributors. Social content; it’s about content creation as media users have an average of well. The term “prosumer” is entering 3.2 friends who post videos at least the language to describe talented once a day; almost four out of amateurs who use sophisticated but 10 consumers post video online via affordable consumer technology social media. More than half of the to produce quality news reports or respondents polled by Accenture instructional videos, for instance. would be interested in recommending Today, aspiring adventurers can buy video to others as part of belonging a GoPro camera for less than $300, to a video service. attach it to their mountain bike or UK viewers now get “all channels” digital TV In the summer of 2012, the British public got another broadcast TV). It includes a unique content discovery way to watch “telly.” The new Internet TV service, called platform: a central catalog that allows global search, YouView, has been hailed by some industry insiders browsing by genre/popularity across content providers, as the natural successor to Britain’s current model of and a “backward-looking” electronic program guide free-to-air TV. Some researchers expect that 3 million (EPG). “Unlike a lot of smart TVs, it doesn’t zone off UK homes will have YouView by 2015. on-demand content in a separate section that you access from another menu—the whole lot is integrated,” YouView combines the United Kingdom’s free-to-air notes one reviewer. Its open application platform can digital channels with on-demand content, all delivered be used by any participating content provider, offering without subscription. An easy-to-use set-top box brings consumers a tremendous range of content. It also together IP and broadcast TV technologies, making them upgrades easily, accepting new features over time such accessible to viewers through a single consistent and as behavioral targeting and predictive recommendations intuitive user interface. The service is backed by a generated by analysis of social media data—such as consortium of seven partners, including the country’s iTunes Genius music recommendations. main terrestrial broadcasters (BBC, ITV, Channel 4 and Channel 5), two ISPs (BT and TalkTalk) and a network YouView provides a strong springboard for innovation. services provider, Arqiva. Its unified and open ecosystem is expected to disrupt the existing TV business model, affecting content The service’s big innovation happens behind the screen. providers, broadcasters, ISPs, advertisers, set-top-box Its application platform gives consumers access to a manufacturers and many other technology enablers. vast array of content options. For example, if the box is And it offers abundant opportunities to create new connected to a broadband line from a partner ISP, then products and features, becoming increasingly attractive an application providing that ISP’s IPTV service will to consumers and providers of content, devices and appear automatically. As the number of content sources TV services. in its ecosystem grows, YouView’s attractiveness to both consumers and to potential new content, devices To date, consumer feedback on the user interface and service providers will continue to increase. At has been very positive. UK telecom company TalkTalk— launch, more than 140 content providers had signed up just one of multiple sales channels for YouView—signed to add their content to the YouView platform; today, up 29,000 YouView customers in the first month more than 300 providers are interested. after launch. A thousand new customers are signing up each day for the service, according to a TalkTalk YouView is not simply another version of a web-enabled spokesperson. TV service. It features a single, consistent, intuitive user interface (integrating on-demand, catch-up and 8 Outlook 2013, Number 1
  • 11. www.accenture.com/Outlook scuba mask, and capture aston- If those technology-enabled factors not a stretch to say that companies ishingly high-quality video that is are pushing the media industry from such as Amazon and Google will easily edited on any laptop and just one side, its key sources of revenue— make big gains, as will others as easily shared via social media. notably advertisers—are pulling it that grasp the significance of the Indeed, the growth in so-called on the other side. Increasingly, disaggregation of traditional media user-generated content has exploded. businesses expect to be able to value chains and the development YouTube now has more than 800 measure what they get for their of new forms of media value creation million unique users every month, investments. Traditional media has and consumption. and while the vast majority of them always had a hard time delivering are watching, growing numbers of precise measurement, and while We’ve already seen the arrival and them are posting content that they the explosion of Internet media is growth of businesses that offer new or others they know have generated. exacerbating the situation by further ways for consumers to access digital fragmenting viewing attention, it content. New entrants like YouTube The capabilities are developing is also creating opportunities for and Netflix are also now creating so quickly, and spreading so widely, better measurement. their own content to differentiate that it’s safe to say that prosumer their brand and sidestep the battle content will soon provide serious Following the money for content rights. competition for some genres of So who wins in a new media world? professionally produced content— The consumer does, of course. Amazon, Google and Apple already news footage, for instance, and some But the other winners are likely to offer consumers access to significant reality TV shows. Consumers are come from outside the boundaries amounts of content, even though even changing the funding of content that have defined the industry it is not at the core of any of their creation (see sidebar, page 10). over the past half-century. It is businesses. For instance, Google’s Screen of choice TV is still the primary device for watching full-length shows and live content in both the United States and the United Kingdom. Portion of US and UK viewers who watch video content over the Internet, on each device 70% 32% Full-length movies and TV 4% 7% 65 30 Live content 6 5 12 74 Short videos/clips 24 12 9 TV 49 PC/laptop User-generated content 15 Mobile/smartphone 9 Tablet Source: Accenture analysis 9
  • 12. Industry Report | Media Entertainment For further reading core business is search, yet it streams House of Cards, the US version of more than 4 billion hours of video the UK political series of the same Accenture Video-Over-Internet per month via YouTube. name directed by David Fincher Consumer Survey 2012: Winning the and starring Kevin Spacey. Battle for Consumer Trust, Accenture Apple generates the vast majority 2012: http://www.accenture.com/us- of its income from sales of its The tectonic shifts underneath the en/Pages/insight-video-over-internet- devices, yet it made $2 billion in media industry will permanently consumer-survey-2012.aspx revenue in the third quarter of reshape the landscape, altering 2012 alone from its iTunes Store, everything from the flow of “Taking The Pulse” study, Accenture 2012: App Store, the iBookstore, sales of advertising dollars to the makeup www.accenuture.com/pulseofmedia iPod services, and Apple-branded of the industry itself. and third-party iPod accessories. “Changing Faces: The TV Company To that last point: Some of the of the Future,” Accenture 2012: The newcomers are following the writing may already be on the http://www.accenture.com/us-en/ money. They understand that success wall. In recent months, some pure Pages/insight-changing-faces-tv- in the media sector has revolved OTT content providers have gone company-future-summary.aspx around premium content, and from strength to strength. Netflix that it will continue to do so in the now has more subscribers than For more related content, future. Which explains YouTube’s many pay-TV operators in the please visit www.accenture.com. announcement, in October 2011, of a United States. That is an astonishing $100 million investment in premium statistic, given that Netflix was channels and the announcement by founded only in 1997. Netflix in May 2012 of its plan for a $185 million, five-year investment At the same time, the most in original content. Just two forward-thinking of the traditional examples of Netflix’s investments: operators are making significant The new season of Arrested moves to properly position them- Development, releasing shortly, and selves in the new media world. Not waiting for deep pockets By 2010, a movie director named Steve Taylor secured funding to create a film adaptation of Donald Miller’s book, Blue Like Jazz. The following year, the film lost the support of a major investor, forcing Taylor to stop production. That’s when two fans of the book stepped in. To raise the $125,000 required to resume production, they created a Kickstarter webpage called “SAVE Blue Like Jazz! (the movie).” The campaign reached its funding target of $125,000 in 10 days—and blew past it, becoming the most successful Kickstarter fundraiser of 2010. In total, $345,992 was raised by 4,495 backers—an average of just $76.97 each. In April 2012, Blue Like Jazz opened nationwide across 136 screens. In just eight weeks—before distribution internationally and through rental and cable channels—it had netted half of the movie’s total budget. It is just one of several examples of crowdfunding. The trend is borne out by Accenture’s recent consumer research: 36 percent of digital consumers would be willing to donate small sums to fund their favorite movie or TV program. 10 Outlook 2013, Number 1
  • 13. www.accenture.com/Outlook To take just two examples: British from traditional advertising The decisions that new entrants Sky Broadcasting is making its models—digital data is more are making today up and down existing content offerings available accurate and more granular than the media value chain are already on as many devices as possible, its analog predecessor. forcing some serious rethinking and YouView—a new open-platform within the established media system that makes IP and broadcast But there is still much to do before industry. The traditional broadcast TV technologies easily accessible the typical marketing department is networks—those most at risk of to viewers through one intuitive able to effectively use sophisticated disruption—must act more promptly user interface—is backed by such analytics to deliver premium, and assertively than they are industry giants as BT and the BBC personalized, interactive advertising, accustomed to if they are to survive (see sidebar, page 8). and create a richer, more detailed in the new world. understanding of specific consumer Removing the guesswork groups—or fan bases—that will But the decisions being made by Traditional subscription models respond to new offers. the Amazons and Googles have are not the only ones at risk from ramifications far beyond the media the new media model. Advertising So what does the new face of TV business itself. They will color the will also have to accommodate the mean for today’s established media choices that advertisers—business- steady shift to digital content and businesses? The ascent of the to-business as well as business-to- the inexorable move to OTT content, consumer requires business models consumer—will have to make. They together with the fact that more that are built around consumer will have an impact on the world of and more content is being viewed needs rather than those of a education. They may well change holistically, with digital entertainment particular channel, platform or the directions of development of experiences encompassing TV, film, advertiser. A single shared view a host of new content-delivery web video, gaming and apps. of the customer—often across products. And they could even different channels—is a prerequisite reshape the role of media as it Thus far, the managed migration for a successful, consumer-focused reflects and affects public policy. of rights to new platforms has multiplatform strategy. preserved traditional TV advertising To paraphrase the old political and pay-TV subscriptions as the The businesses that adapt success- maxim: Where TV goes, so goes greatest drivers of revenue. But the fully will need to try different the nation. industry may be about to change approaches concurrently. They’ll too fast for that to remain true. need to create and run with hybrid Possible signs of things to come: business models and constantly About the authors Subscriptions could well shift away reevaluate their place in the media from bloated bundles to à la carte value “ecosystem”—perhaps taking Robin Murdoch leads the strategy group options that allow consumers to on new roles—so they can spot and within Accenture Communications, pick and pay for exactly the content capture new revenue opportunities. Media Technology. He is based they want and no more, from a In short, players all across the media in Seattle. range of different providers—new value chain now have to plan for a robin.murdoch@accenture.com Internet-based players among them. new and fundamentally different media delivery architecture. Youssef D. Tuma leads Accenture Digital Already, chief marketing officers Services for the United Kingdom. He is everywhere are scrambling to based in London. reallocate and optimize marketing Ten years from now, the TV will youssef.d.tuma@accenture.com budgets across platforms. They are still be one of the largest pieces of getting some help from increasingly furniture in the living room, and Marco Vernocchi leads the Media sophisticated customer data it will still have a central place in Entertainment group within Accenture collection and analytics tools, family life. But the TV business Communications, Media Technology. which are beginning to enable new overall may be unrecognizable— He is based in Milan. forms of cross-screen targeting certainly when compared to the marco.vernocchi@accenture.com and measurement. To a large extent, operating models and industry digital removes the guesswork makeup that prevail today. 11
  • 14. Public Service Coup d’état Radically rethinking public services By Bernard Le Masson, Brian J. Moran and Steve Rohleder As they attempt to square public service demand against supply, governments worldwide must do more, better, with less. To be successful, they need to overthrow old ideas and embrace the next generation of tools and ways of working. 12 Outlook 2013, Number 1
  • 15. 13
  • 16. Public Service Consider this: If 10 key countries business-as-usual level of public- increased their aggregate public- service delivery. sector efficiency a mere 1 percent a year, they would collectively save Our findings are sobering. Through nearly $2 trillion annually by 2025. 2025, the gap between expected demand for public services and But to do this, these same countries government’s ability to meet it must identify and achieve substantial in these countries ranges from cost savings. According to Accenture $10 billion in Singapore to nearly research, by 2025, the gap between a trillion dollars in the United States expected demand for services in (see chart, page 16). Expressed in these 10 countries and the ability terms of GDP, the shortfalls range to pay for them is projected to total from 1.3 percent in Italy to 5.4 $1.6 trillion. percent in the United Kingdom. Today’s political and economic reali- It is clear, in the words of the OECD, ties are putting enormous demands that the “fiscal positions in many on public services throughout the countries [are] unsustainable.” world. Aging populations, growing fiscal uncertainties and rising citizen Given current budget situations in expectations have put governments many countries, these expenditure worldwide in unsustainable positions. gaps are simply not viable. Worse, For example, already high govern- most citizens already consider ment debt in countries in the OECD public-service levels inadequate. ballooned by some 30 percent of GDP A 2012 Ipsos MORI/Accenture between 2007 and 2011. survey shows that only 36 percent of citizens across all 10 countries are Citizens’ expectations—in many cases, either very or even fairly satisfied conditioned by their experiences as with public services. In other words, customers of best-in-class private- the delivery gap is actually larger sector players—have shifted than these funding shortfalls suggest significantly in recent years, and because most governments already the public sector has often been slow fail to meet citizen expectations. to accommodate these changing attitudes. At the same time, Shifting gears governments must contend with But governments can do better. dwindling resources as tax revenues In the course of extensive work in remain stagnant in countries still the public sector, Accenture has hampered by underperforming identified four paradigm-breaking economies, rising expenses and, for shifts governments can make to many, an inability to provide the close major funding gaps while comprehensive service solutions delivering higher levels of service. their citizens want. • hift from offering standardized S To better understand the fundamental to personalized services. disconnect between what govern- ments are being asked to achieve • eplace reactive approaches with R through public services and what’s insight-driven ones. actually possible, Accenture launched a research program across 10 major • ove from standard public M countries focused on the economic management techniques to impact of maintaining the current a public entrepreneurship style. 14 Outlook 2013, Number 1
  • 17. www.accenture.com/Outlook • eplace piecemeal efficiency R countries we surveyed could reduce improvements with a holistic public spending by approximately “mission productivity” mindset. 7 percent by 2025. A full 1 percent annual efficiency gain would cut The rewards for making these shifts public spending requirements by are potentially huge. Using 2010 data 13.5 percent over the same period. as a baseline, Oxford Economics The United States alone could save projected that an overall public- as much as $995 billion by 2025 by service efficiency gain of half increasing public-sector efficiency a percent per year across the 10 by just 1 percent a year. One size does not fit all: Personalizing services Traditional public services often Governments can provide follow a one-size-fits-all model: personalized services using fewer Governments pour resources into resources by taking advantage a standard mold to produce the of new technology and organiza- same public services for everyone. tional design to make it easier for Unfortunately, simply funneling service providers to collaborate. The more resources into the mold Istituto Nazionale della Previdenza to improve service levels does Sociale, the main Italian welfare not typically produce the desired agency, has organized its services results. Data from OECD member around the citizen. Users submit states shows that even massive a single request and regardless spending increases for standardized of how many subsidiary agencies education services, for example, are involved, the INPS and local do not necessarily lead to better authorities collaborate to address outcomes in areas such as the user’s needs. Personalization reading scores. can also reduce the cost to deliver services via better-targeted, more This standardized services model preventative approaches. stands in sharp contrast to the “mar- ket-of-one” evolution in the private Effective public-service personal- sector, which has allowed commercial ization depends on three actions. organizations to serve customers better at reduced costs. The personal computer industry has embraced Develop deep citizen insights the market-of-one concept of mass customization for years, enabling These should form the core of customers to “spec” their machine personalization initiatives. While with a wide variety of performance the public sector has cautiously options and accessories. To drive embraced advanced analytics to productivity, governments must improve service, several examples shift to this same model of personal- already illustrate how “rich data” ized services. This implies design- can provide insights and guide ing services in partnership with actions in public services. citizens—and delivering them in integrated ways to provide exactly New York City’s Health and Human what’s needed, when and in the most Services developed a program that appropriate manner. employs advanced data management 15
  • 18. Public Service methods to create a comprehensive, Services. This measure decreased cost-effective view of a citizen’s administrative overhead and will interactions with city services. deliver efficiencies of $140 million Caseworkers across agencies can over four years. use the information collaboratively to create tailored services for The government of Maharashtra, families or individuals. India’s second most populous state, is at the forefront of implementing the Aadhaar (UID) project that Design citizen-centered services will ensure the delivery of benefits more efficiently. To date, 40 million Greater personalization requires residents have been enrolled. By governments to put citizens at reducing database duplication, the center of service design. As the state is projected to achieve outlined in the Driving Efficiency savings of up to 25 percent. report in the Australian govern- ment’s 2011–2012 budget, Canberra Designing citizen-centered services supported the development of implies a much greater level of ICT systems that make it easier integration, but so far, many initia- for customers to access Centrelink, tives have simply been “bolted on” Medicare and Child Support as a way of bypassing entrenched Deeper in the red The expenditure gaps—the difference between the demand for public services and the ability to pay for them—by 2025 across 10 countries are expected to range from $10 billion in Singapore to as much as $940 billion in the United States. Total public- Annual percentage service expenditure, Expenditure gap by Expenditure gap as a increase in efficiency to Country in US $ billion 2025, in US $ billion percent of GDP in 2025 close the expenditure gap Australia $419 $50 3.0 0.91 Brazil $915 $70 1.9 0.57 Canada $724 $90 4.1 0.92 France $1,281 $100 3.3 0.58 Germany $1,402 $80 2.0 0.42 India $501 $70 1.5 1.11 Italy $873 $30 1.3 0.25 Singapore $53 $10 2.3 1.40 United Kingdom $1,016 $170 5.4 1.25 United States $7,328 $940 4.4 1.00 Note: Economic modeling used 2010 data. Source: Oxford Economics, 2012 16 Outlook 2013, Number 1
  • 19. www.accenture.com/Outlook departmental and jurisdictional Delivery of Services Bill in structures. In the future, govern- 2011, which, if enacted, would ments need to integrate these direct every government agency fragmented structures so that to deliver all public services public services are centered on the electronically. holistic needs of citizens. In the future, citizens will become more involved in the Engage citizens as service design of their own public services, design partners and governments will begin to treat them as genuine partners. Fredericia Personalization gives citizens Kommune, a local authority in more power to determine how Denmark, has developed preventative they are served. Enabling citizen solutions that enable older citizens participation in cost-effective to live independently at home, thus ways requires a strong set of reducing the need for institutional online digital services, and for- care. By emphasizing health tunately, many governments are education, enablement and smart already on this path. One survey home-based technologies, the indicates that more than 60 initiative is generating significant countries currently have online savings. Approximately 43 percent “e-participation” policies, which of participating patients now become focus on the use of information self-sufficient compared with only and communications technologies 5 percent three years ago, generating in national government and annual savings of approximately governance processes. India, for $2.7 million, or 14 percent of the example, introduced the Electronic authority’s total budget. Tomorrow’s services today: Adopting insight-driven approaches Governments will soon shift out Collaborate and cooperate of their reactive postures and embrace insights that enable them Effective cross-agency collaboration to anticipate the public-service often requires strategic information- needs of citizens. Why? The global sharing programs. In one example pace of change has accelerated from the public safety field, Europol, and become more volatile and dis- the European Union law enforcement ruptive, making reactive approaches agency, has established centralized obsolete. Adopting an insight-driven capabilities for data matching that public-service strategy will allow can identify the nature of criminal governments to predict tomorrow’s activity affecting multiple countries. service needs and cost-effectively What’s more, Europol’s Secure provide the resources required to Information Exchange Network meet them. Application (SIENA) is one of a small number of secure international To make the shift to insight-driven police systems, connecting all major management, governments should police forces in Europe on the same focus on the following priorities. platform. What’s unique about 17
  • 20. Public Service SIENA is that it complies with all legal ities from the bottom up without data protection and confidentiality major input from above. requirements and as a result ensures that member countries can exchange sensitive information securely. Adopt “emergent identity” services Share insights effectively With identity theft and fraud rampant worldwide, governments Getting the right information to need more reliable ways to ensure decision makers—whether police, that citizens are who they say they caseworkers, border agents or are. In 2012, Amsterdam Airport citizens—when and where they Schiphol piloted an automated need it while safeguarding privacy border control system featuring rights is an essential element facial recognition technology that of any insight-driven strategy. compares passenger identities For police and defense forces in against the digital photographs in particular, mobile devices coupled their passports. The system can with efficient information-sharing also identify forged passports and solutions enable those on the recognize people who may be on ground to organize complex activ- an authority’s “wanted” list. Public entrepreneurship: Focusing on value creation Governments today are underutilizing Beyond needed policy and legislation existing public-sector talent that changes that should, for example, could help them make the transition emphasize such areas as education to “public entrepreneurs.” Making and workforce development, the shift this shift can help governments to public entrepreneurship requires drive much-needed sustainable governments to do three things. job creation and long-term growth in the current tough economic environment. Public entrepreneurs Collaborate to boost impact focus on creating value, forging new relationships, collaborating Public entrepreneurs have a across traditional boundaries and number of options for building breaking through organizational collaborative partnerships that can silos to get things done. They multiply the impact of initiatives. partner to deliver value and take Using new delivery and organiza- calculated risks, understanding tional models can drive innovation that while some efforts may fail, and stimulate better economic others will not. outcomes; these efforts often involve spinning entities out of The shift to public entrepreneurship the public sector. repurposes the machinery of govern- ment to stimulate economic outcomes, For example, in the United Kingdom, collaborate and multiply the impact one healthcare center that converted of government investments. to an employee-owned mutual 18 Outlook 2013, Number 1
  • 21. www.accenture.com/Outlook organization in 2008 reported involvement, Mexican central, state to compete globally, the efforts productivity gains of 20 percent and local governments are recasting are unlikely to succeed. Given the in 2009; the quality of clinical the city center as a hub for the complexity inherent in the skills outcomes improved or was digital media industry with a goal development challenge, coordination sustained as well. The greater of providing employment for 30,000 among the public, private and social autonomy enjoyed by employees people while building an environ- sectors1 is critical. under the mutual model drove mentally sustainable creative culture these productivity improvements. that can provide a better quality of However, a recent Accenture survey life for the local population. of European decision makers found Some countries are creating public/ that although organizations from private collaborations that harness all three sectors believe that such technologies to drive both economic Develop labor pool skills collaboration is essential, less than and social outcome improvements. 20 percent are working together on One example is a major redevelop- Public entrepreneurs can attempt skills issues with players in the other ment effort in Guadalajara, Mexico. to help businesses flourish, but if sectors. Public entrepreneurs can With significant private-sector a nation’s workforce lacks the skills address this shortcoming by building 1 S ituated between the public and private sectors, the social sector includes cooperative organizations, nonprofits and charities. Big savings If the 10 countries listed below were able to improve efficiency in the delivery of public services by just 1 percent per year, they would save a combined total of almost $2 trillion by 2025 annually. Savings in US$ billions Estimated 0.5% Estimated 1% Country efficiency improvement efficiency improvement Australia $30 $58 Brazil $63 $122 Canada $51 $99 France $91 $177 Germany $99 $192 India $34 $66 Italy $62 $121 Singapore $4 $7 United Kingdom $72 $139 United States $514 $995 Total $1.02 trillion $1.98 trillion Source: Oxford Economics, 2012 19
  • 22. Public Service For further reading coalitions and partnerships between of streetlight that reduced running businesses, public agencies and costs and associated carbon footprint “Singapore Ministry of Finance: not-for-profit players to provide the levels by 33 percent. Shared Services,” Accenture 2012 labor skills needed for the future. http://www.accenture.com/sg-en/ Governments can also make better Pages/success-singapore-ministry- Accenture’s own Skills to Succeed use of the data they collect. For finance-shared-services.aspx initiative provides an example of this example, “data mashing” enables approach. By the end of fiscal 2011, agencies to merge public informa- For more related content, the initiative had equipped more than tion with different types of data please visit www.accenture.com. 160,000 people worldwide—two-thirds to produce new products and of the way to the goal of training a services that they then can sell. quarter of a million people—with the In Denmark, Geomatic, a private workplace and entrepreneurial skills company, uses government data to they need to get a job or build a busi- develop market insights that they ness. Partners in the Skills to Succeed sell to clients for marketing and initiative include the International strategy development purposes. Federation of Red Cross and Red Crescent Societies, Junior Achieve- Another opportunity: using tech- ment, Plan, Save the Children and nology to simplify interactions Youth Business International. between business and government. One leading example is Norway’s Altinn portal, which provides a Introduce intelligent stewardship single connecting platform to cover a whole range of government agencies. Governments have many ways Through Altinn, small and medium- to capitalize more fully on the size enterprises can obtain informa- resources they manage. They can, tion and submit applications without for example, use their sizable having to contend with multiple procurement budgets to catalyze authorities at different administrative innovation. Near Dublin, the Dún levels. Between 2008 and 2026, the Laoghaire-Rathdown County government expects Altinn to save Council invited teams of academics Norwegian businesses approximately and businesses to bid for a low- $1.6 billion through data handling energy street-lighting contract. The cost savings and the more efficient winning bid involved a new kind use of time. Optimal efficiency: Encouraging a ”mission productivity” mindset Instead of pursuing piecemeal public sector’s considerable scale attempts to improve efficiency, and assets. governments need to shift to a holistic “mission productivity” Savings from these actions could mindset that embraces broad, be substantial. Oxford Economics integrated thinking to prioritize estimates that if the United States and manage initiatives better. achieved annual 0.5 percent They must also take steps efficiency gains, it would realize to eliminate service delivery more than $500 billion annually in duplications and make use of the savings by 2025 (see chart, page 19). 20 Outlook 2013, Number 1
  • 23. www.accenture.com/Outlook To capture such gains, governments By restructuring core functions massive opportunities to make should pursue three courses of action. through consolidation and public services more effective and collaboration, governments can efficient. Leaders must realize, drive considerably higher levels of however, that the four shifts Focus on outcomes public-service productivity through described here will require a economies of scale and scope, reformist’s zeal and a true commit- This will require governments to which can dramatically reduce ment to significant change. introduce performance management overhead costs and duplication. approaches that prioritize services In a notable example, Service While undoubtedly difficult, based on desired outcomes. While Canada merged more than 70 these shifts can help governments full-scale prioritization efforts services from multiple agencies— worldwide resolve today’s seemingly can be difficult, their impact can from the Canada Pension Plan and intractable public-service problems be profound: In Sweden, a priority Old Age Security to Employment while effectively positioning them review during the 1990s reduced Insurance—into a single customer to meet the needs of tomorrow’s average departmental spending service organization. The program citizens. by 11 percent, helping to move saved more than $265 million in from a budget deficit of 10 percent its first year alone. into a 1.9 percent surplus within About the authors four years. Introduce operationally Bernard Le Masson is the management Some public-service organizations excellent administration consulting managing director for have increasingly adopted practices Accenture Health Public Service. performance management to drive He is based in Paris. improved outcomes. While this is a These will support and enable more bernard.le.masson@accenture.com good start, we believe they should productive core functions in two also use performance systems to ways. First, public entrepreneurs Brian J. Moran is the managing drive continuous improvements should fully exploit government scale director of Accenture’s Public Service in the value of investments. This to drive efficiencies. New Zealand’s Operations Management group. approach requires a budgeting government agencies, by jointly He is based in Cleveland. process that rewards outcome purchasing supplies and services brian.j.moran@accenture.com delivery and shifts away from such as vehicles, office supplies, inflation-based budget adjustments. air travel and legal services, are Steve Rohleder is the group chief South Korea has developed a unique expected to save almost $300 mil- executive of Accenture Health Public performance management mechanism lion over the next few years. Service. He is based in Austin, TX. whereby all public agencies must stephen.j.rohleder@accenture.com regularly review their programs Second, they should make better through self-assessments focused use of existing assets. For instance, on total cost. Programs that are government agencies in Singapore rated ineffective face 10 percent developed a shared human resources, budget cuts. finance and procurement system to provide support to 15 agencies and 17,000 users. Over its lifespan, Restructure core functions the system is expected to help cut the cost of IT infrastructure The second main thrust for by 30 percent. optimizing efficiency involves the core functions of government agencies. Worldwide, public services Governments worldwide face are delivered in highly fragmented daunting public-service challenges. ways. For example, New York But with the right approach, we State alone has nearly 5,000 local believe they can overcome these government entities. obstacles by tapping into the 21
  • 25. Strategy Cross-industry ecosystems Growth outside the box By Cedric Vatier To reap future growth benefits, companies must smash through the traditional confines of industry walls to seek collaborative opportunities that stretch across multiple business sectors. 23
  • 26. Strategy Are industries obsolete? Consider, for instance, how Apple leads an ecosystem that spans Until recently, the concept of at least four industries—personal standalone industries made sense. computers, consumer electronics, From the Industrial Revolution on, information and communications— the world’s economy has consisted and now encompasses even of dozens of compartmentalized more, such as music and TV collections of companies, each (see chart, page 27). serving its own markets, teaming up with its own suppliers and Breaking out pursuing its own ways of capturing Because of today’s advanced value. In more settled times, this connectivity solutions and value- paradigm worked well; staying laden emerging markets, many within an industry’s established companies have never been better lines of business and ways of doing positioned to engage in multi-industry things made competition compara- collaborations. But few have broken tively straightforward and was out of the static industry box. the normal path to profitability. In fact, lacking today’s digital They had better figure out a way means to change the game or global to do so soon. Several Accenture opportunities to form new business studies suggest that future growth models, breaking out of the industry opportunities will increasingly box was all but impossible. emerge outside a company’s traditional business. And each of Today, however, disruptions in these opportunities will require everything from the flow of raw disruptive new approaches and materials to the nature of end collaborative models. markets have conspired to knock even well-rooted industries off- Meanwhile, the new competitive kilter. Fortunately, companies have dynamics will be shaped by a variety of technology-enabled two important factors. The first ways to smash through the confines is collectively known as Big of industry walls and unlock Data—increasingly vast pools new value-laden synergies in of information that empower pursuit of collaborative opportu- companies to link previously nities that stretch across multiple distinct industries. business sectors. But even though Big Data is blazing Welcome to the bold new world of countless fresh paths to growth, in business ecosystems, a term first many cases, companies need new coined two decades ago by James F. ecosystem partners to pursue them. Moore, an expert on leadership and These cohorts can help make up for change in large-scale systems, in a lack of internal competence or a Harvard Business Review article. provide access to information. What’s Instead of being rigidly grouped more, the intimate knowledge housed around a specific business or branch in an organization’s customer of manufacturing, ecosystems databases can open potential new draw together mutually supportive revenue streams beyond a company’s companies from multiple industries core business. that collectively seek to create differentiated offerings and capture The pursuit of new business oppor- value they could not reach alone. tunities depends on the availability 24 Outlook 2013, Number 1
  • 27. www.accenture.com/Outlook of increasingly scarce financing, Emerging markets are expected which is the second factor shaping to drive up to 70 percent of the new competitive dynamics. This future growth for multinational scarcity, along with the instability corporations. But penetrating in financial markets, is spurring these markets can present serious the emergence of innovative ways obstacles for most companies. for companies to obtain the capital In many cases, organizations they need. will need to develop innovative business models to meet specific At the same time, burgeoning local market needs. public debt is forcing governments to reposition themselves as project Leading companies no longer view initiators that depend on outside environmental concerns as a barrier sources of funding when it comes to growth, seeing them instead to public-sector procurement (see as opportunities to be pursued sidebar, below). Sharing costs with partner enterprises. The new and risks has therefore become sources of growth being created by a necessity for both private- and environmental issues often require public-sector companies. a collaborative strategy that crosses industries. For example, offerings For these new multi-industry focused on energy efficiency are collaborations, opportunities will be already being created by ecosystems found in three broad areas: emerging of energy providers, technology markets, the environment and providers, construction companies maturing Western markets. and more. Collaborating for cash Although originally, multiparty, cross-industry collaboration mainly consisted of public-private partnerships, it actually encompassed a wide variety of different models. More than half of these partnerships in emerging countries between 1990 and 2001 involved cooperation between the government and the private sector that was limited to the founding contract. These agreements also included technical and quality objectives, although they were secondary to the initial issue of financing. Today, traditional public-private partnership contracts are considered too complex; they are also considered inflexible because they lock partici- pants in for extended periods (often 20 to 60 years), making it extremely difficult to adapt to unexpected shifts in technology or environmental concerns. In the area of municipal services, however, an entirely different approach is emerging. A number of “smart city” initiatives reflect renewed interest in both public- private and private-private partnerships based on simple and innovative collaborative business models. These partnerships provide innovative ways for cities and their stakeholders to work together to access the resources needed to effect change (see story). 25
  • 28. Strategy Maturing Western markets still Better Place wants to introduce contain significant numbers of a totally new transportation sophisticated, affluent consumers. business model by positioning Instead of writing off these markets, itself as the provider of an end-to- companies need to capture value by end network and service solution pursuing new sources of competitive for electric vehicles. The company differentiation. Positioning an has established an ecosystem organization as an innovative market that links public authorities, disruptor can be both risky and which support development difficult, but it remains one of the through tax credits; automakers, best ways to generate significant which develop EV technology; profitable growth. battery suppliers; energy suppliers; and investors. Positioning an Disruptive business models These growth opportunities have At the same time, disruptive organization as an been spotted by a number of initiatives involving multiple innovative market organizations that have already industries are transforming the seen the benefits of collaboration way we travel. Some ecosystems disruptor is one and have created cross-industry have already successfully deployed of the best ways to ecosystems. tools like location-based smartphone apps in airports. The “My Way generate significant Consider so-called smart cities. Aéroports de Paris” smartphone In the Netherlands, the city of app enables Paris-Charles de profitable growth. Amsterdam teamed with energy Gaulle Airport terminals and network company Alliander, Android smartphone providers telecom operator KPN and city- to collaborate to help travelers affiliated agency Amsterdam navigate their way to airport shops, Innovation Motor (AIM) to create restaurants, parking terminals an experimental cross-industry and, ultimately, their flights. public-private ecosystem to reduce the city’s carbon footprint. Looking Other companies could develop beyond a basic commitment to ecosystems using location-based funding clean infrastructure, the technology as well. Clothing retailer project partners built a platform where Gap, for instance, in partnership a diverse array of different-size with a credit-card company, has companies can share expertise and introduced the Gap Mobile4U jointly lead projects to improve urban location-based service for text- living, working and mobility, and, at enabled mobile phones, which the same time, reduce the impact these sends Gap customers text messages projects have on the environment. with personal offers for deals at the nearest store. Electric vehicles also offer a compelling illustration of how More generally, highly diverse cross-industry ecosystems can segments of the population have usher in major paradigm shifts. come to expect uninterrupted Better Place, a venture capital-backed connectivity and virtual interaction. company, is structuring a new As a result, consumers no longer collaboration that ranges from the perceive travel as a solitary development of EVs with removable experience; regardless of age or batteries by automakers to the whether their trip is for business installation of networks of battery or pleasure, today’s travelers want charging and swapping stations. to be connected throughout their 26 Outlook 2013, Number 1