By John Watling, Managing Director for Accenture Operations
The days of believing core enterprise processes and functions can only be delivered in-house are well and truly over. Most senior business leaders today want to adopt “as-a-Service” features such as intelligent operations within two years.
The concept of bringing applications, infrastructure and business processes together and delivering them “as-a-Service” is advancing much more rapidly than expected.
The standard thinking in 2015 was that as-a-Service was not yet mature as a delivery model for business processes and IT. But by late 2016, a second survey by HfS Research found that 56 percent of business leaders were looking to adopt as-a-Service features within just two years.
So why this sudden change of heart? We’ve identified five drivers that are behind this acceleration of as-a-Service as the go-to delivery model:
- Competition: Businesses that have embraced as-a-Service are flourishing. Those that haven’t are increasingly wondering why they’re putting themselves at a competitive disadvantage.
- Agility: The global economy is arguably more uncertain than at any time since the Second World War. Businesses need to be able to react fast to rapidly changing conditions, and what better way to do that than through as-a-Service delivery?
- Speed: The innovation cycle has accelerated. The old days of first-mover advantage are gone; businesses need to continually innovate and reduce time-to-value for new products and services. As-a-Service enables them to do just that.
- Advanced analytics: Business understand the need to use advanced analytics to improve delivery and customer service through better insights. As-a-Service reduces the time it takes to act on insights, helping secure competitive advantage.
- Business outcomes: Organizations are attracted to as-a-Service because they’ve seen how it ties directly to business outcomes. Businesses go to a service provider with a set of outcomes they want to achieve, and the service provider tailors a solution that delivers on them. What could be simpler or more effective?
Ultimately, companies are recognizing the promise of as-a-Service and its ability to help them meet their business goals in ways that are both tangible and measurable. However, this promise can only be realized if organizations overcome several barriers to success.
Inhibitors of as-a-Service Adoption
First, organizations need to review how they buy these new services. Traditional commercial models that are fixed-price or full time employee-based don’t work in the as-a-Service world. Instead, value needs to be defined and measured in new ways, tied to unique business outcomes.
Second, using point solutions may cause integration and vendor management challenges. Work with service providers that offer an end-to-end solution across a function or process instead.
Third, the technologies that underpin the as-a-Service model have matured at different rates. Only in the past few years has there been sufficient take-up of public and hybrid cloud, for example.
Fourth, multiple stakeholders within a company can make approvals more complex, given buying as-a Service is different than purchasing standard services. Stakeholders must agree on a clear set of business-led objectives that can then be enabled by IT.
Finally, the as-a-Service delivery environment is much more fluid than organizations may be used to. Providers will need to continually demonstrate their value to maintain their relationships and build strategic partnerships with clients.
Five Entry Points
If organizations are willing to accept the changed nature of business process and IT delivery that comes with as-a-Service, then they are set to start their transformations. But where to begin? We have identified five entry points; consider which of these would work best for your business:
- Start with technology – By migrating IT functions to the cloud you can take an incremental approach to as-a-Service – one application or process at a time.
- Automate processes – Businesses with an established infrastructure and processes may want to look at how they can drive flexibility and accuracy through automation.
- Adopt platforms – Many leading organizations are leveraging external resources to create new ecosystems and synergies to drive sustainable growth. By leading in the new and plugging into one of these ecosystems, a business can use its services and capabilities as-a-Service.
- Analytics – For many businesses, the need to gain a completive edge through analytical insights makes a good entry point. For example, analytics can help spawn insights about how to reduce time to market or shorten phases of R&D processes. As-a-Service can then enable such companies to respond quickly and effectively to those insights.
- Renewal – A contract renewal or the natural end of a program’s lifecycle presents the perfect opportunity to review as-a-Service alternatives.
Companies now using an as-a-Service model for one or more functions are reaping the benefits of partnering with an as-a-Service provider for more sophisticated and more intelligent services. It’s propelled by business outcomes like becoming more agile and responsive to market demands, adopting a variable cost base and supporting new strategic directions.
It’s clear that for some organizations, as-a-Service is here and producing value already. For others, it will be here soon so it is crucial organisations get started now or they will lose ground to more agile competitors.