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Accenture: Big businesses must prepare for industry disruption

Feb 28
Tags: Accenture
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Accenture: Big businesses must prepare for industry...

Management consultants working with large businesses around the world are likely to see those organisations facing high levels of industry disruption in the near future, according to Accenture.

The firm conducted an analysis of more than 3,600 enterprises throughout 82 countries with annual revenues of at least US$100 million (£72.6 million). It looked at these companies from two angles: current level of disruption and susceptibility to disruption in the future.

Using the results, Accenture created a 'disruptability index' which challenged the commonly held assumption that disruption is a random occurrence. The report argued that industry disruption follows a pattern, meaning businesses can understand and prepare for it.

Key findings from the study suggested that nearly two-thirds (63 per cent) of large firms around the world currently face high levels of disruption, while more than two in five (44 per cent) show strong signs of susceptibility.

Organisations in 20 industry sectors were divided into four distinct periods of disruption:

  • Durability: Disruption is "evident but not life-threatening", and incumbent businesses have structural advantages and achieve consistent performance.
  • Vulnerability: Current disruption is moderate, but there is a risk of future disruption owing to productivity challenges such as high labour costs.
  • Volatility: "Violent, sudden disruption" is prominent and traits that were once seen as strengths have become weaknesses.
  • Viability: Disruption is constant, new disruptors emerge regularly and sources of competitive advantage are limited.

Nearly four out of ten surveyed companies (37 per cent) were placed in the 'viability' category and a quarter (25 per cent) were positioned under 'volatility'. The remaining 38 per cent of firms were divided equally under 'vulnerability' and 'durability'.

Omar Abbosh, Accenture's chief strategy officer, said: "Disruption is continual and inevitable - but it's also predictable. Business leaders need to determine where their company is positioned in this disruption landscape and the likely speed of change.

"The more clearly they see what's changing around them, the better they can predict and identify opportunities to create value from innovation for their business and rotate to the 'new'."

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Image: Rawpixel via iStock

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