Infosys has published the results of its global research which suggests only 7% of companies have the correct combination of culture and operating structure to boost growth from digital technologies. The comprehensive report Digital Radar: The next Digital Frontier was undertaken by the Infosys Knowledge Institute, the thought leadership arm of Infosys, a global provider in next-generation digital services and consulting.
The report found that only 5% of firms are currently implementing a live data approach. Furthermore, nine out of ten companies have the wrong organisational structure and culture to unlock the next frontier of digital growth. In fact, only about half of organizations in this research are organised around products. Just 14% of firms are prioritizing the right cultural practices.
The report surveyed 2,700 business executives across the US, UK, France, Germany, Australia, New Zealand, China, and India. It found that companies that make decisions based on high quality, transparent data and build a culture of responsible risk-taking are more likely to deliver profitable growth in today’s tough macro-economic conditions. In addition, organising around products, not process, gets new products to market faster, increasing early-mover advantage.
According to Mohit Joshi, President, Infosys, “We are facing a time when businesses and consumers are facing winds of change. This includes tough macro-economic headwinds, and a challenging competitive environment. Leaders must see this period as an opportunity to think differently. Unlock new structures and ways of working to drive much needed innovation and growth. Yet, in practice, very few businesses are accomplishing this. The opportunity lies in the hands of the C-suite to develop a 21st century enterprise that builds resilience, agility, and growth into their operating models.”
Key differentiators for business success
The report outlines three differentiators for business success. Use data internally, design organisation culture to take responsible risks and organise the business around products. Infosys suggests that companies that excel in these capabilities enjoy increased profit, brand perception, and employee and customer engagement. However, the report found that less than 10% of firms have mastered these three differentiators. As a result, it highlights the significant opportunities for those that do.
- Live Data: The report finds that only 5% of firms currently implement what it defines as a universal ‘live data’ approach. This is defined as data that is high-quality, timely, and readily available across the organisation. These data practices drive profit through better innovation and new product speed to market. For instance, companies that follow robust data practices for decision-making improved their new product introduction capability by as much as 85%.
- Product-centricity: The research also found that companies who organise their teams around their product offerings instead of business functions, are 50% more likely to be top performers in new product introduction. Furthermore, they improve both employee and customer engagement significantly. Yet only half of respondent companies are currently organised in this way, highlighting a tremendous market opportunity.
- Responsible risk-taking culture: A company that takes responsible, considered risks, backed by live data, is more likely to create products faster. In addition, its retains employees and increases profit over those that do not. The research identified five culture levers that can improve innovation fivefold. This included flexible leadership style, leadership and employee diversity, data-driven leadership, rapid test-and-learn, and encouraging risk-taking.
Utilising technology
While digital technologies will never stop evolving, the research demonstrates the importance of how companies use tech. It also highlights how businesses structure their organizations to be more agile and responsive. Together these findings further highlight that digital success is contingent on the way a company organises itself around technology. As opposed to being something that can be delivered by technology alone.
Jeff Kavanaugh, VP and Global Head at Infosys Knowledge Institute, said; “The 2023 Digital Radar reveals a new frontier for business. It outlines three areas to spark innovation and bottom-line growth, showing that highly successful firms recognize the relationship between live data, product-centricity and a responsible-risk taking culture. These companies are a step ahead on their digital journey while caring for people and planet.”
Enterprise Times: What this means for business
This is an incredibly interesting report which reflects the challenge that businesses, irrespective of size or sector, must meet. Today’s marketplace remains tough and competitive for enterprises across all the business landscape. The world economy is tougher than ever — and investments in digital technology alone will not guarantee enterprise success.
Previously, companies used to create scale through people and value through technology, but today the equation has reversed. Now they achieve scale through technology and value through people. These foundational tenets of the modern operating model will stop the pendulum swing from business units to function-centric and back again.
The report suggests businesses will settle for a hybrid model where start-up like growth, consistency, and efficiency are not mutually exclusive. With live data and autonomous, responsible risk-taking, firms can have their cake and eat it too. Agile, offering-centric growth strategies, lives alongside integrated global standards that deliver cross-enterprise functional efficiencies.
After years of embracing one digital fad after another, enterprises must change the way they structure their business around technology. Companies must get the most out of these investments. Successful companies don’t just adopt new technology, they continuously adapt their business around it. This is vital to consistently outperform their competitors.
These companies grow despite inflation, a growing worldwide recession, complicated supply chain issues, and other challenges. Infosys’s Digital Radar research examines specific practices and technologies that make companies successful today and in the future. Infosys research suggests a persuasive blueprint for the 21st-century enterprise focused on live data, responsible risk-taking and product-centricity.
