New research from Accenture finds that companies with highly interoperable enterprise applications gain greater agility to thrive amid uncertainty and achieve stronger financial performance. Last year, companies with high interoperability – which consist of one in three companies surveyed (34%) – grew revenue six times faster than their peers with low interoperability, and they are poised to unlock an additional five percentage points in annual revenue growth.
For the report, Value Untangled: Accelerating radical growth through interoperability, Accenture surveyed more than 4,000 C-suite executives across 19 industries in 23 countries. It found that in the last two years alone, one in two companies (49%) adopted new technology and transformed their business faster than ever, with 40% transforming multiple parts of their business at the same time. High interoperability helps these companies achieve the agility they need to undergo compressed transformation. By using applications that easily interact with each other to enable data sharing, greater transparency and quality human connections, organizations can pivot more quickly and take advantage of new opportunities.
“While the concept of interoperability isn’t new, the technology to make it possible in a timely and cost-effective way is finally putting it within reach for most enterprises,” said Emma McGuigan, senior managing director and Enterprise & Industry Technologies lead at Accenture. “To compress transformation from years to months, or even days, everything must be integrated and interoperable. One in three companies have prioritized this level of agility and are untangling value to race past their competitors in revenue growth, efficiency and resiliency by using interoperability to spark total enterprise reinvention.”
Companies with high interoperability benefit not only from stronger financial performance but they are also 12 percentage points better at improving their supply chain and operations; 16 percentage points better at reinventing customer experience; 12 percentage points more successful at improving employee productivity; 4 percentage points more successful at embracing sustainable business practices; and 11 percentage points more likely to sustain compressed transformations.
Leading companies with high interoperability achieve profitable growth by allocating just 2-4% more of their IT and functional budgets to applications, while handling as many, if not more, diverse applications within their IT stack. Most enterprises now have more than 500 applications, with eight out of ten (82%) saying they will continue to expand their application footprint, making an interoperable approach even more important. At the same time, 66% say that the number of applications and their associated technical complexities are a barrier to reaching interoperability. Those that are successful make high interoperability central to their overall business and technology strategy.
The report recommends three actions for companies aspiring to improve interoperability:
Leverage the cloud – A fundamental interoperability enabler, cloud is now ubiquitous. Companies that successfully improve their interoperability start by moving existing applications to the cloud and investing in new, cloud-based enterprise applications. But more importantly, they use the cloud to connect data and experiences across applications, creating one version of truth for the enterprise. Our research found that nearly 72% of companies with high/medium interoperability adopted public cloud and have already migrated 30% of their data and workloads. Only 60% of low/no interoperability companies have adopted public cloud, a 12% lag.
Utilize composable tech – Using proven, repeatable solutions that can be configured and reconfigured at speed to address changing business needs, known as composable technology, builds flexibility into the heart of organizations. This allows enterprises to cope with the effects of disruption through faster, better and cheaper transformation. It requires shifting from a technology architecture of static, standalone parts to one of the composable pieces. By using prebuilt, interoperable solutions to swap and plug-and-play smaller application components, new solutions can be created without wider disruption.
Focus on meaningful collaboration – Interoperable applications are only one part of the equation. Interoperability can enable meaningful collaboration by allowing functions and people to work together seamlessly toward a common goal. They can use real-time data, analytics and AI, together with new ways of working, to unlock the value of technology, empower people and achieve better outcomes. This collaborative culture comes from the top: more than one fourth (27%) of executives consider lack of collaboration across business functions as a top challenge caused by low/no interoperability. Leadership can amplify collaboration by drawing up broad use cases for new interoperable applications and challenging employees across functions to solve them as a team.