Chapter 2 of digital transformation – a conversation with Accenture

SUMMARY:

How can business thread a path to digital? It is much harder than appears to be the case. Accenture provides some answers.

Narry Singh accenture
Narry Singh – Accenture

Like other SIs, Accenture is working hard to get itself from under the yoke of time and materials consulting and outsourcing. Today’s emphasis is all about digital and the work companies need to do to get onto platforms and services that reflect the fast paced changes occurring in their markets. To that end, Accenture has made a lot of noise in its recent earnings announcements and has provided us with a rich seam of content from which to assess progress.

Beyond the rhetoric, I want to understand how well Accenture’s customers are navigating what for many companies is difficult terrain. To that end I recently spoke with Narry Singh, Accenture’s managing director, digital business strategy.

Let’s get real

As background, Stuart Lauchlan profiled Singh in late 2014. At the time, Lauchlan was pleasantly surprised to hear large gobs of realism such as:

Talking about innovation sounds to me like a a defensive stance. You’ve already lost and you’re now responding to something else. Whereas if you actually identify four or five customer problems that haven’t been solved, it just switches a slightly different gear. If you’re a telco, stop trying to do all these wonderful things and just fix the voicemail. That’s a problem I can get behind. I don’t think you innovate to fix anything.

In my conversation I wanted to get a different perspective, starting with an indication of what the journey to a digital future looks like:

This is a 10 to 20 year journey so let’s not get carried away with quick fixes. It is easy to get distracted by the latest shiny new thing. Am I really waiting for my pizza to get disrupted? Of course not but then even the most carefully thought through plans are difficult to execute against.  I like to say that clarity of vision does not mean proximity of distance.

And not all industries will move at the same pace. The well known shifts in digital media for example may be alarming if you’re in advertising revenue hell but the same factors do not necessarily play out elsewhere. Singh offered the example of capital intensive industries where the allure of IoT projects might sound like fantastic opportunities but where the scale and economics involved in tapping (for instance) sensor data are not necessarily there.

Critiquing the digital leaders

In that general context, I was interested to hear what Singh thinks about Tesla, which recently came off a phenomenally successful Model 3 launch but which I believe will be challenged to fulfill on its delivery promise:

Tesla is a highly iconic business but it has paid the price of being an early adopter. Scalability and all the things the old dogs know how to do for product delivery are new to them. Moving product from point A to B is a skill the digital businesses have yet to learn.

Turning to retail and warming to his reality check theme, Singh’s view about Amazon, the so-called retail disruptor par excellence is revealing:

Remember we’re talking omni-channel. That means more than a portfolio of digital properties. So now you see some disruptors are growing up. If you ask most of the digital retailers, they would give an arm and a leg for physical presence.

Singh’s point is interesting for a variety of reasons, not least because it flies in the face of the way in which such stories are often reported. In some media, you’d think that Amazon’s decision to open physical stores is a form of heresy, when in reality it is a grounded view of retail reality.

The path to Chapter 2

Putting the headline grabbers to one side, what is Singh seeing in Accenture’s customer portfolio?

Clients are finding that now is the dawn of what I term Chapter 2 of the digital journey. Chapter 1 in our mind was mostly an add-on in every way, you might have a few mobile apps, fix the website, get some e-commerce into the equation. So the issue right now, many clients are saying ‘Is this it? Has digital really moved the needle for us.’ The answer is a qualified ‘yes’ but now those same clients need to be thinking about digital as a mindset and as a core part of their business. That’s a tough one because it’s easy to think of separate business.

Singh sees this as leading to an era of experimentation. He uses the example of the incumbent banks where services are being developed off the back of existing assets.

It almost doesn’t matter to me if Kabbage [lending acceleration for SMBs] fails, survival requires you to experiment aggressively. We know that digital requires significant failure and so we see this as a platform for experimentation. Agile is what matters and that’s hard to do for many businesses. We almost have to get out of our own way so we can react quickly. Viewed from that standpoint, you don’t have to be the most innovative but you have to be the most agile.

What about the problems associated with this mindset? Singh says that business has to organize for speed which, for many, is a major challenge. The days when proposals could hang around for committees to meet, cogitate, revise and then execute are over but then how? Singh says that business needs a new type of business leader who is not weighed down with the baggage of ‘sacred assumptions.’ Put in terms the average financial controller will find disturbing:

The GL doesn’t have to be centralized if you’re in the BitCoin world but who will jump onto that idea?

I can think of a few but I can count them on the fingers of less than two hands.

My take

Singh is clearly trying to hold two equal and opposing ideas in balance. On the one hand, Accenture clients want to explore and move to the digital world but on the other hand, the challenges of introducing new ideas, which in itself is almost always disruptive, mean companies almost have to ring fence the new from the old. At the very least, they have to be agile but without creating the kind of chaos that can easily emerge when failing fast.

The idea of ring fencing is one that I have proposed on many occasions but it is extraordinarily difficult to undertake. The obvious threats to incumbency stir up corporate anti-bodies that can quickly crush initiatives. I have seen this happen many times, often with catastrophic results.

It is entirely possible that acting in the position of trusted advisor, Accenture can help the C-Suite overcome these challenges in ways that direct hires cannot, but it is not a done deal. This is especially true for public companies that are faced with the twin tyrannies of in-flight change while keeping an eye on satisfying the capital markets.

I was pleased to have the opportunity to speak with Singh because it provides the emerging narrative that companies need to hear and which is grounded in what is possible rather than hanging off trendy buzzwords. It should be no surprise that i look forward to revisiting this topic in 6-12 months’ time and assess progress.

Image credit - Both images via Accenture