Growing the Digital Business. Accenture Mobility Research 2015: Spotlight on Canada

Transcription

1 Growing the Digital Business Accenture Mobility Research 2015: Spotlight on Canada

2 Introduction The emergence and adoption of digital technologies has rapidly transformed businesses and industries around the globe. Mobile technologies have been especially impactful, as they have enabled companies to not only streamline their operations, but also engage more effectively with customers and develop new revenue streams. A key source of information on the impact digital technologies are having on business is Accenture s 2015 Global Mobility Study, which provides insights into digital technology trends among large companies around the world. This year s study encompasses three areas of focus: How companies are adopting and deploying mobile and other digital technologies to enhance their business. How companies view and use the emerging Internet of Things (IoT) and the ways in which the IoT will benefit them. Where companies are deploying mobile applications and the challenges they face in designing and maintaining them. The study is based on a combination of online and telephone interviews, conducted in December 2014 and January 2015, with 1,925 senior decision-makers for digital strategy and technologies of whom, 150 were based in Canada. Participating Canadian companies have more than US$1 billion in revenue. 1

3 In this report, we explore the progress Canadian companies have made to date in adopting mobile, social media, analytics, and cloud technologies with a particular focus on the Internet of Things and mobile apps and how Canadian companies are benefiting from their use. We also highlight how Canadian companies experience compares with that of companies in other countries, and illustrate some ways Canadian companies are capitalizing on digital technologies to improve business performance. Among the key findings of this year s research are the following: Canadian executives have an optimistic view of the value of digital technologies and what they can do for a business, but Canadian companies overall typically lag others in adopting specific technologies. One of the biggest factors that has limited digital adoption by Canadian companies has been the largely ad hoc, uncoordinated approach to strategy and implementation. Canadian executives are as likely as executives in other countries to believe mobile apps can help drive their company s digital transformation. Canadian companies use of mobile apps is as varied as their adoption of broader digital technologies in part, because many Canadian companies have been slow to put in place measures that facilitate app adoption. Canadian executives roundly believe the IoT will have a major impact on their industry as well as their company, and many believe their companies are well on their way toward capitalizing on the IoT. Canadian companies may encounter trouble putting the IoT into use because they lack many of the capabilities required for successful deployment. Security is the overriding concern for Canadian executives when deploying and using any digital technologies. 2

4 Has Canada Truly Joined the Digital Revolution? The digital revolution is sweeping economies around the world, and Canada is no exception. Canadian consumers have embraced digital technologies as a central part of their lives, and the country s businesses have steadily applied them to improve many facets of their operations. However, new research from Accenture reveals that while Canada s embrace of digital has been steady, it still has more work to do to realize the full potential of digitalization. Accenture and Oxford Economics measured the digital density of an economy via a comprehensive digital density scorecard that captures not just the integration of digital technologies and processes into business practices, but also the degree to which digital is enabled in the surrounding institutional and economic environment. This study found empirical evidence that higher degrees of digital density are related to better economic performance. 1 On the other hand, internet connections are not very mobile, or very fast a likely factor in businesses slower pace in shifting transactions online than those in other countries. Furthermore, Canada s information and communications technology (ICT) labor pool is small and the country lags others in innovation. In short, Canada s high digital density score reflects the fact that the country performs consistently above-average in all aspects covered by the scorecard. While Canada is not a pioneer when it comes to digital, it also doesn t lag significantly, either. That said, there s certainly plenty of room for improvement. Overall, Canada earned a high digital density score a result due as much to the country s institutions, behaviors and attitudes toward digital change as much as to the infrastructure it has put in place. 2 For instance, Canada has a well-connected population, and the country s companies have been aggressively applying digital technologies to their business processes. 1 Digital Density Index: Guiding digital transformation, Accenture, 2015, 2 Canada Digital Density Index: Guiding Digital Transformation, Accenture, 2015, 3

5 Steady Progress in Adopting Digital Technologies, but Still Lagging Many Countries Accenture s 2015 Mobility Study is consistent with our research on digital density illustrating a consistently positive view of digital among Canadian executives and steady progress in adopting them. At the same time, it underscored the fact that Canadian companies trail some in other countries in the adoption and use of specific digital technologies and, consequently, in experiencing the positive benefits such technologies have been proven to generate. At a high level, no one can question Canadian executives optimistic view of the value of digital technologies and what they can do for a business. Eighty-eight percent of them said their organization has clear expectations for how digital technologies can enhance their business. For the largest percentage of executives, anticipated outcomes of combining multiple technologies include increasing customer engagement (named by 43 percent) and creating new revenue opportunities and streamlining operations (each cited by 41 percent). 4

6 However, as illustrated in Figure 1, Canadian executives generally are less likely than their global counterparts to anticipate the outcomes we asked about. That s particularly true of several key outcomes: increasing the speed of product/service development; enabling rapid response to customer demands; transforming the way the company operates; and enabling the penetration of new markets. Figure 1: Expected outcomes of using digital technologies Increase customer engagement Streamline operations 43% 46% 41% 41% Create new revenue opportunities 41% 48% Enable penetration of new markets 39% 45% Increase the speed of product/service development and time to market Enable rapid responses to customer demands 36% 36% 46% 45% Transform the way the company operates Enable a shift from being product-oriented to also becoming service-oriented 34% 40% 31% 35% Threaten the future of our business 17% 17% Canada Global Analytics and cloud were the most likely of the four digital technologies to be cited by Canadian executives as vital to achieving these outcomes. In fact, Canadians were more likely than executives globally to say analytics is the most critical, and less likely to say the same about mobile. Canadian responses regarding social media and cloud mirrored the global average. 5

7 Current View Pyramid Properties by Region Canadian executives also have a largely positive view of the progress their organizations have made toward becoming a digital business. Just under nine in 10 (89 percent) said their company has made significant inroads in leveraging digital technologies overall in the past year. That s two points higher than the global average. But again, their responses suggest Canadian companies lag companies in other areas of the world in this case, in adopting specific digital technologies. As illustrated in Figure 2, Canadian executives are less likely than their global counterparts to say their company has a clear strategy for mobile technologies and has already successfully implemented either some or many mobile initiatives; has a strong presence on all relevant social media channels that has been somewhat or very successful in enhancing customer engagement; is either successfully using predictive analytics to increase revenue or improve profitability, or using analytics to gain insights from strategic data within their business to improve some of their operations; and has been successfully using the cloud for either some or most of its IT infrastructure needs. Figure 2: Progress companies have made in deploying digital technologies Hilton We have been successfully using the cloud for either some or most of our IT infrastructure needs Marriott DoubleTree Marriott Other, Sheraton The Lodge & Spa at Cordillera Westin Hilton We are either successfully using predictive analytics to increase revenue or improve profitability, or Hotel Indigo Independent, are using analytics to gain insights Hilton from strategic Wigwam data within our business to improve some of our operations We have a strong presence on all relevant social media Wave channels Waikiki that has been somewhat or very successful in enhancing customer engagement We have a strong presence on all relevant social media channels that has been somewhat or very successful in enhancing customer engagement Marriott Crowne Plaza Other, Chase Park Plaza Marriott Candlewood Hyatt Hilton Marriott 40% Westin Marriott Sheraton 50% Marriott 49% 48% DoubleTree Marriott Hawks Cay Westin, Grand Cayman Hanover Inn Hilton 59% Hilton Hilton Fairfax Sheraton 58% 57% Hilton Westin, JetBlue, DoubleTree 65% Point Lookout Hilton Marriott Wylie Inn Marriott, Wyndham, Hotel Viking Regions Arizona Atrium Marriott 7 Mid-Atlantic Northeast Southeast Western New Marriott Properties Canada Global Canadian companies also trail others somewhat in taking steps to formalize governance and decision making regarding digital technologies (Figure 3). Seventy percent of Canadian executives said their company has one, holistic strategy for moving toward becoming a digital business considerably lower than the global average (80 percent). And 76 percent (compared with 80 percent globally) said their company has a chief digital officer or comparable role to oversee the use of digital technologies in the enterprise. 6

8 Figure 3: Progress companies have made in formalizing digital governance and decision making Our company has a clear chain of command for making digital technology decisions 87% 94% We have a chief digital officer or comparable role to oversee the use of digital technologies in the enterprise 76% 80% We have one, holistic strategy for moving toward becoming a digital business 70% 80% Canada Global % acknowledge that digital technologies have more potential to transform an organization when brought in alongside other digital technologies % believe implementation of these technologies relies on collaboration across functions % have one team that owns digital strategy % have a single budget holder for implementing digital technology 7

9 The presence of a chief digital officer doesn t necessarily mean that person is the official digital czar empowered to make critical, strategic decisions about the digital direction of the organization. In fact, our interviews suggest that the role s seniority and responsibilities differ considerably from firm to firm, similar to how the chief marketing officer role did several years ago. Canadian executives cited a wide range of other obstacles to adoption, most notably security and finding the right technology partners. However, with a few exceptions, Canadian executives were generally less likely than executives globally to cite any one challenge as especially troublesome, as shown in Figure 4. Figure 4: Challenges in digital technology adoption Security concerns 50% 51% Finding the right technology partners Keeping pace with digital advancements Having enough skills/resources to support digital deployments 42% 37% 39% 41% 31% 34% Exploiting the potential of digital 29% 36% Internal technical integration issues Developing a roadmap to adopt digital technologies Lack of digital-focused leadership 28% 33% 26% 30% 23% 21% The overlap of technologies makes it difficult to manage 22% 28% Internal organization/infrastructure and team silos 21% 27% Canada Global 8

10 One of the most interesting findings of our research is the correlation between a company s profitability (relative to competitors in its industry) and its approach to and perspectives on digital technologies. We compared the responses by executives who described their company s profitability as better than competitors with those citing profitability as worse than competitors. Both groups tended to be similar in how they described their progress in adopting digital technologies, the challenges they face, and their approach to digital strategy. But they differed in several important areas. As illustrated in Figure 5, those who described their company s profitability as better than competitors were more likely to expect a much broader range of outcomes from combining multiple digital technologies. Conversely, those believing their profitability is worse than competitors were more likely to see digital technologies as a threat instead of an opportunity, to be lagging in digital transformation, and to lack a centralized budget for implementation (Figure 6). Figure 5: Expected outcomes for digital differed by company profitability relative to competitors.* Create new revenue opportunities Increase customer engagement Enable penetration of new markets Enable rapid response to customer demands 42% 37% 43% 34% 57% 53% 52% 52% Increase speed of offering time to market 51% 44% Transform the way the company operates 38% 45% Streamline operations 36% 44% Enable a shift from being product-oriented to also becoming service-oriented 40% 33% More Profitable * Less Profitable Global figures 9

11 Figure 6: Companies with lower profitability tend to lag in digital transformation.* Do not have a budget holder for digital technology implementation 43% 64% Have not started to think about transforming into a digital business 31% 51% Believe that digital technologies threaten the future of their business 22% 16% Less Profitable More Profitable Global figures * While they are based on a global sample, these findings have several important implications for Canadian organizations. They suggest that an optimistic, open embrace of digital technologies combined with a focused approach to implementing them can have a positive effect on a company s overall profitability. By recognizing the significant opportunities that digital presents to improve myriad aspects of its business, and mobilizing to capitalize on them, a company can outperform its competitors. Our analysis also illustrates that the inverse holds true: Companies that are lagging behind in transforming into a digital business and are trying to avoid digital technologies instead of using them to their benefit are creating a major gap between themselves and their competitors. And the longer they wait to adopt digital, the harder it will be for them to catch up. 10

12 Mobile Apps Are Seen as Core to the Digital Business, but not Pervasively Used One of the core digital technologies transforming businesses is mobile, and a key to mobile s effectiveness is the app. In the past five years, companies have spent considerable time, money and attention developing mobile apps that not only enable them to engage and connect with their customers, but also to improve the efficiency and productivity of their employees. As mobility continues to evolve, it is becoming increasingly critical to a company s ability to use the full range of digital technologies to boost overall operating and financial performance. This is something a large majority of Canadian executives in our survey recognize They are as likely as executives in other countries to believe mobile apps are necessary to fully realize the benefits of digital technologies, act as the portal to becoming a digital business, are an integral part of their organization, and are key to unlocking vital data from across their business. 11

13 Figure 7: Executives views on the importance and future of mobile apps A large majority of Canadian executives also agree on the need for mobile apps to enhance customer engagement. Eighty-five percent (versus 87 percent globally) said there is high demand among their customers for effective mobile apps that can help them access the company s services. And, according to our survey participants, the importance of mobile apps likely will only grow over time: Eighty-five percent of Canadian executives (the same as executives globally) believe mobile apps will be the dominant interface of the future. Mobile apps are necessary to fully realize the benefits of digital technologies 87% 87% Mobile apps act as the portal that opens up a digital business 87% 87% There is a high demand from customers to offer effective mobile apps as a way to access services 85% 87% Mobile apps will be the dominant interface of the future 85% 85% Mobile apps are key to unlocking vital data from across a business 80% 81% Enterprise (internal) mobile apps are an integral part of our organization 79% 82% Canada Global 12

14 When it comes to specific types of apps, Canadian companies use of them is as varied as their adoption of broader digital technologies (Figure 8). Figure 8: Current use of mobile apps Operational apps 45% 43% Productivity apps 44% 46% Management apps 42% 43% Sales, customer service and information apps 39% 44% Apps linked to consumer connected products 34% 33% Apps linked to industrial connected products 34% 33% Mobile learning and collaboration apps 25% 35% Apps to drive engagement across different channels 23% 29% Commercial off-the-shelf enterprise apps 23% 32% Bespoke enterprise apps made specifically to meet our needs 19% 30% Canada Global 13

15 For example, of the 10 types of mobile apps we asked about in our survey, half were reported in use currently by virtually the same percentage of Canadian executives and executives globally. These include apps focused on operations (for instance, those that allow employees to complete time sheets or book office space); productivity (such as those that enable report updates or access to sales data); and management (such as executive dashboards); as well as apps linked to consumer-oriented connected products and industrial connected products. The other half are less likely to be in use in Canadian companies than in other companies. These are apps geared toward customers (such as those that support sales or customer service; mobile learning and collaboration apps; commercial off-the-shelf enterprise apps; apps to drive engagement across different channels; and bespoke enterprise apps. Importantly, in the case of all app types, none was reported as being currently used by a majority of Canadian companies a situation that could be due to a number of factors. One factor is a generally negative perception of mobile apps among some Canadian executives. Almost half (45 percent) said mobile apps offer little business benefit and over half (55 percent) believe mobile apps cannot be appropriately secured for business purposes. Another factor is that many Canadian companies have been slow to put in place measures that facilitate app adoption (Figure 9). For instance, Canadian executives are largely consistent with their global counterparts in what they see as the biggest keys to fostering greater adoption of mobile apps across the enterprise. For Canadians, the most significant factors are a positive user experience, reliable and consistent performance, and security of the enterprise data used or accessed. 14

16 Figure 9: Capabilities in place to facilitate mobile app adoption Offline accessibility and functionality Comprehensive testing program before launch that includes real user feedback Deep integration with enterprise s back-end systems Regular updates to functionality Ongoing feedback mechanisms 48% 48% 52% 47% 48% 46% 46% 51% 59% 58% Designing specific mobile apps for exisiting desktop business applications 42% 48% Ability to upload and download real-time data to/from the cloud Intuitive user interface 34% 37% 54% 56% Accessibility through an enterprise app store 27% 46% Mobile security solutions that are integrated with exisiting enterprise security systems 26% 54% Canada Global However, only 34 percent said their apps have an intuitive user interface that enhances the user experience (a figure that trails the global average by 22 percentage points) and 46 percent (versus 58 percent globally) reported they make regular updates to functionality. Just 26 percent 28 percentage points lower than the global average said they have mobile security solutions that are integrated with existing enterprise security systems. And only 37 percent (versus 54 percent globally) said they have the ability to upload and download real-time data to and from the cloud. Furthermore, Canadian companies appear to be missing a golden opportunity to make it easier for employees to find and download apps: Twenty-seven percent of Canadian executives, compared with 46 percent of respondents globally, said they currently have in place an enterprise app store through which employees can access relevant apps. 15

17 A third factor that could be damping adoption is the wide range of challenges Canadian companies face when building and managing apps. As shown in Figure 10, security remains the overriding concern, as is the case with digital technologies in general. Canadian executives also indicated performance issues (such as crashes and bugs), lack of internal skills, and operational issues (including difficulty building and updating apps efficiently) are potential obstacles to a broader use of mobile apps. Figure 10: Challenges companies experience when building and managing mobile apps Security issues Performance issues (crashes and bugs) 45% 49% 41% 37% Lack of internal skills Lack of usage data 22% 29% 27% 29% Operational issues (difficulty building and updating apps efficiently) Fragmented nature of mobile (multiple device types and operating systems) 26% 33% 25% 31% Integration issues with back-end systems Developer ecosystems 23% 23% 22% 30% Monetization issues (difficulty hitting ROI targets) Inability to keep pace with operating system updates 21% 26% 21% 22% API Management 21% 23% Discoverability issues (lack of traction/adoption of apps) 15% 26% Canada Global 16

18 The Internet of Things Has Enormous Potential, but Key Capabilities Are Lacking One of the fastest-growing types of digital technologies, and a key element of mobile, is the Internet of Things (IoT). Previously heralded primarily as a way to improve operational efficiency, the IoT increasingly is being recognized for its potential to help companies find growth in unexpected ways. The IoT and its associated products not only provide opportunities for organizations to improve operational efficiency, it also offers rich potential for those that make equipment and products to introduce new digital products and services thus creating entirely new sources of revenue. 17

19 Count Canadian executives as IoT believers. Nearly nine in 10 of those in our survey said the IoT will have a major impact on their industry. About eight in 10 believe it will affect their own company in several key ways, most prominently by helping them create new products, add service offerings to their existing product lines, and transform the company s entire portfolio to offer both new services and products. Three-quarters think the IoT will help their company expand its enterprise ecosystem and technology partnerships. Within the next three years, a large majority of Canadian executives also expect the IoT to produce a wide range of benefits for their company (Figure 11). The most common are an improved supply chain, new revenue streams, an enhanced portfolio with additional products and services, and empowered employees. Figure 11: Benefits executives expect from the IoT Improve our supply chain Enable us to enhance our offering portfolio with additional products and services Increase levels of engagement with our solutions Allow us to develop a new revenue stream Empower employees 87% 86% 84% 87% 83% 87% 85% 85% 84% 83% Compel us to partner with other organizations 71% 75% I don t believe that connected products will have any positive impact on my business 33% 38% Canada Global Encouragingly, many Canadian executives in our survey believe their companies are well on their way toward capitalizing on the IoT although executives responses also suggest their companies may encounter trouble putting the IoT into use because they lack many of the capabilities required for successful deployment. 18

20 Similar to executives globally, 94 percent of Canadian executives said their company is either evaluating or actively using the IoT and connected products (Figure 12). Of these, 35 percent have already deployed at least one connected product. An additional 33 percent are evaluating how they can use connected products (and in some cases, are engaging in pilot programs). And 26 percent have completed their evaluation of connected products and are moving to deployment. Figure 12: Progress companies have made in capitalizing on the IoT and connected products We are successfully deploying multiple connected products in our organization We have deployed one or more connected products in our organization We have evaluated connected products and are starting to deploy them in our organization We are evaluating connected products and engaging in pilot programs We are evaluating how we can use connected products We do not have a clear strategy nor currently use connected products 17% 19% 18% 20% 26% 19% 15% 17% 18% 18% 6% 7% Canada Global On the other hand, Canadian companies have been slow to invest in the capabilities required to successfully deploy the IoT and connected products, which could compromise their ability to get greater value from them. In most cases, Canadian companies trail the global average in having key capabilities in place, and in a few instances, they rank dead last among all the countries in our survey. As illustrated in Figure 13, half or nearly half of Canadian executives said their company has in place comprehensive identity and access management security, necessary resources and in-house skills, analytics capabilities to use the rich data connected products generate, and dedicated budget for connected products. But even in these cases, Canadians trail the global average. 19

21 Figure 13: IoT capabilities noted as already in place Resources/In-house skills 51% 57% Comprehensive identity and access management security Analytics capabilities to utilize collected data Dedicated budget for connected products More network bandwidth or lower-cost bandwidth 50% 49% 49% 48% 50% 58% 57% 63% Holistic/unified connected products strategy 47% 55% Smart devised with the appropriate sensing, communication, size, power 33% 54% Context-aware device interface (reliably automated or worker-friendly) 17% 47% Technology platform to securely exchange data with connected products 16% 54% Robust ecosystem of partners 15% 44% Canada Global Worse, Canadian companies are severely lacking in several other important capabilities. Fewer than two in 10 said their company has a robust ecosystem of partners, a technology platform to securely exchange data with connected products, and a context-aware device interface. Just one-third reported their organization has in place smart devices with the appropriate sensing, communication, size, power and cost. On the positive side, three-quarters of Canadian companies said they do have in place a managed services platform to interface with the IoT and connected products across the organization. Such a platform incorporates out-of-the-box capabilities for organizations to sell or manage mobility products and services with a flexible architecture that helps orchestrate services across mobile commerce, mobile virtual network enablement, and connected devices while also enabling analytics. A managed services platform will be key to enabling Canadian companies to launch and scale the use of the IoT by reducing complexity through modular design, as well as through pre-integration with network operators, device manufacturers and application developers. 20

22 Conclusion Becoming a digital business which we define as an organization that incorporates a combination of two or more digital technologies is critical to the success of any company. As our research shows, companies can boost profitability by openly embracing digital technologies and implementing via a focused approach. This echoes findings from the Accenture CMO Insights report, which indicated that the investments high-performing companies have made in analytics, digital and mobile are paying off. 3 In fact, there s ample evidence that digital technologies are both the present and the future of business. That s why companies no longer have the luxury of sitting on the sidelines to evaluate whether and how to use digital. Both upstart and established companies are already using digital in innovative ways to change the rules of the game, and they are building a sizable lead in critical competitive capabilities over organizations that are slow to act. These capabilities are enabling them to not only streamline their operations but, more important, to penetrate new markets and engage more effectively with customers to drive greater top-line growth. The reality is that while Canadian companies have made some progress in adopting digital technologies, they still have much work to do to address the variety of challenges and other factors that are keeping them from fully joining the digital revolution. They need to move more quickly, and do so now. *Accenture does not guarantee the accuracy or completeness of the information in this report. Accenture makes no representation or warranty, express or implied, and accepts no liability concerning the fairness, accuracy, or completeness of the information contained herein or for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this presentation or for any decision based on it. 3 Accenture Interactive CMO Insights report,

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24 About Accenture Accenture is a global management consulting, technology services and outsourcing company, with more than 336,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, Its home page is Stay Connected Follow Connect With Us Copyright 2015 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.