But having the best technology does not necessarily predict success. While sharing data and deploying mobile or analytics technologies are important, companies must develop new capabilities and more flexible strategies to form those more open and collaborative networks that are at the heart of digitally contestable markets.
Accenture's research indicates that there is a gap between companies' intentions and their readiness to pursue new business models. Among respondents to an Accenture survey of c-level executives who classified their companies as being above-average performers, at least eight out of 10 said their businesses were well positioned to understand trends outside their traditional industry and well positioned to collaborate with outside entities to grow in non-traditional business sectors. For respondents from companies that consider themselves lower performers, the proportion falls to just over half and little more than a third, respectively.
To stay ahead, leading companies are enhancing "analog" skills at the same time that they are increasing their digital capabilities. For instance, they are engaging their employees in new ways to capture what is going on at the edge of the firm – and what might be affecting their customers. This information can then be turned into strategic insight for decision makers on how to make the customer experience better.
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Top companies also are applying technology to augment human skills in new and interesting ways. The luxury retailer, Burberry, has experimented with technology that automatically makes customer histories available as those customers walk through the door, helping sales assistants offer a more relevant service.
Lastly, successful companies are creating true cultures of open collaboration. Thanks to crowdsourcing platforms and social networks, businesses can now tap the intelligence of a much wider "extended" workforce made up of partners, their employees and, of course, customers themselves.
In digitally contestable markets, customers care less and less about which company or sector provides services, as long as those services meet their needs. That creates commercial threats and opportunities, of course. But incumbents need to be aware that the barriers to their own sectors are coming down and that new digitally-enabled competitors are ready to enter. By embracing these newcomers and working with them, they can create entirely new markets, innovative new products and services, and higher growth rates.
Mark Spelman is Global Managing Director for Accenture