Since the COVID-19 pandemic disrupted the entire global business world in March 2020, businesses have been scrambling to reinvent their business models and restructure their supply chains to adapt and survive.

By Greg Cress, digital transformation lead at Accenture in Africa

Work that we always assumed required being present in a corporate office to be completed, has been pushed to the edge and is now completed at employees’ homes.

The pandemic sparked massive innovation and fresh thinking towards entirely new ways of doing things. In the process of making sense of the global challenges of the past two years, organisations had to transform the way they track global megatrends and make decisions. There is no better time than now to improve and develop a robust corporate foresight capability inside organisations.

Following extensive C-suite and managing director level research across 20 industries and 18 countries, Accenture’s Business Futures research identified 25 key leading indicators of change, and then narrowed these down to the six priority signals that our executive respondents indicated would be most critical to track in the coming 12 months. We call these priority indicators the six “Signals of Change”.

Because of the exponential rate of change the world is experiencing, the classic approach to strategic planning has been made redundant.

Five-year forecasts, revisited annually, are an exercise in futility. Instead, mapping a future is now a combination of doing forecasts, strategic planning, and having mechanisms or leadership radar tools available that are attuned to real-time data points, enabling rapid strategic decision making that isn’t hindered by process or heavy risk management red tape.

This is about removing the corporate immune system put in place to block innovation.

Let’s look at four of the six signals here to unpack how businesses can plan their new futures:


Learn from the future

Rapid shifts in the operating environment and people’s behaviour mean that the historical correlations some analytical models rely on have been challenged. Today, corporate forecast cycles have become so compressed that companies can do a forecast but also build in a layer of adaptability into the forecast that is informed by data. Relying completely on a five-year historical trend is no longer sufficient, in fact it is risky. The whole notion of the first signal of Learning from the future, and seeing the change before it happens, is to make this a critical planning tool for organisations. Learning from the future is the ability to anticipate change and simulate a strategic response before it happens.

Learning from the future can unlock new growth opportunities – area companies often struggle to get right. We found, for instance, that only 31% of the executives in our survey said they are entirely confident in their ability to foresee and respond to behavioural changes that affect demand. Learning from the future requires businesses to shift from assumption-driven, top-down decision-making to data-driven, bottom-up decision-making. This model allows employees to augment their judgment and intuition with algorithms’ recommendations – in Accenture we call this combining technology with human ingenuity.

The differentiator is data processing capabilities coupled with the modelling capabilities to construct a live set of plausible futures for the business – almost like a “dashboard for the future”. The secret is knowing how to mine one’s data wealth effectively. In the 2002 Steven Spielberg-directed science fiction film Minority Report, a special unit of the police called “Pre-Crime” was able to build real-time views of crimes committed in the future by merging the “dream” data streams from the minds of three psychics connected to a primitive cloud network.

In much the same way, organisations that are effective at learning from the future will build their own real-time “intelligence algorithms”, or live machine learning models, trained to analyse customer data patterns and predict opportunities for growth and investment – presenting this data in visual ways to decision-makers within the organisation.


Pushed to the Edge

Edge organisations leverage the principles of “edge” computing, a decentralised form of computation and data storage that speeds up processing by moving intelligence closer to the point of use in organisations formed by moving decision-making to the edge, allowing highly networked teams to act with speed and agility.

In a certain sense, being an edge organisation calls for a location-agnostic approach. The business activity determines the decision making, no longer just the geographic location of control. Edge teams are empowered to decide how to organise, work, meet corporate goals, and deliver on the mission while optimising local performance. When companies empower their edges to make most day-to-day operational decisions, they free up their headquarters to focus on critical strategic functions – such as setting the organisation’s strategic direction by processing data gained at the edge. Pushing to the edge gives more autonomy and resiliency to change through networked teams, as opposed to a typical pyramid hierarchy of a command-and-control organisation.

Although many organisations have long strived to become edge organisations, seeking to “think globally but act locally,” several factors have aligned to make the edge a growing reality today. Vast improvements in technologies have enabled more excellent connectivity and securely managed information flows, helping organisations overcome distance constraints. The pandemic has shown that it is indeed possible to collaborate well at a distance. Meanwhile, growing fragmentation and changing consumer preferences have made moving decision-making authority to the edges not just a possibility but a necessity.

Applying the logic of edge computing to their operating models also offers two valuable opportunities for businesses. First, edge computing reduces latency (the time it takes for data to travel between the point of creation and the point of processing) by processing data at the point of collection. When companies push decision-making to the edges of their organisations, they are better placed to respond to fast-changing business environments. Secondly, edge computing optimises bandwidth by sending only critical data for additional processing to the cloud. Microsoft Teams and Zoom have created the foundation for “hive-minded” organisations, where employees at the edge are constantly digitally connected, collaborating, and thinking together in real-time. This has accelerated an organisation’s ability to process data, make decisions – it’s hard to imagine a return to the linear models of the past that depended entirely on in-person interactions.

Edge organisations can respond faster to changing local preferences. During the pandemic, consumer-loyalty dynamics have shifted, both in brands and channels, as people tried new products and ways to shop. Today, customer needs differ so much from market to market that a universal playbook will not be practical – local customisation is a critical factor to success. Organisations that push decision-making authority to the edges will be best positioned to meet ongoing changes in local needs and be a more customer-centric business, satisfying a customer needs to be based on where the customer is located, instead of where the company is located.

Pushed to the edge goes hand in glove with learning from the future because the data sources for decisions will be close to the customer activity. When the feedback loop between the source of data and the decision-making is made as short as possible, quality decision-making can be decentralised, harnessing the true power of the edge.


Supply Unbounded

To meet growing customer needs for fast, flexible, cost-effective, and sustainable order fulfilment, some companies are restructuring their supply chains and moving production to the point of demand. This can be called “supply chain compression” – the reduction of the distance between production, fulfilment and delivery to the customer.

The exciting thing about this supply unbounded signal is that it breeds new ecosystems of value with the shortest route ‘from turf to the table’. A classic example is farming: products from a farm that followed a typically very involved and lengthy distribution cycle to the consumer is evolving to “vertical farming”, where the food supply chain is started inside the store itself, inside a refrigerated unit, or a greenhouse type environment in stores. Food is being produced where it is purchased – inside the retail channel without any supply chain involved. That is a significant disruption, moving away from centralised production with a distribution channel to a more customer-directed approach where retail becomes the last step in the production line.

Organisations have taken drastic steps to keep goods moving and customer orders fulfilled throughout the pandemic. Large consumer goods companies cut the number of items they offered in their product lines in half to simplify their supply chains and focus on critical goods. With the expanded use of curbside pickup, nearly 100,000 brands worldwide began offering curbside pickup during the pandemic. This enabled many retailers to earn a margin on lossmaking order fulfilment channels before the pandemic. Eighty-four per cent of survey respondents said they scaled up their last-mile initiatives, investing in drones, autonomous vehicles and other technologies.

The organisations closest to meeting customer expectations for order fulfilment are taking a holistic approach to their experiments by making interventions across their supply chains. In the process, these organisations move from centralised, linear supply models to decentralised networks that use on-demand production. We call this new type of supply chain “supply unbounded.”

Different industries and regions face significant differences in customer behaviour and logistical challenges. Companies can take three steps to break the physical limits of their supply chains and enable more effective fulfilment, embracing the signal of unbound supply:

  • Redefine the purpose of physical infrastructure by rethinking the value added by each node in the distribution network
  • Rethink supply networks by increasing the locus of control over outsourced networks
  • Redesign products and services to be produced at the point of sale, or to be provided to customers as-a-service.


Real Virtualities

The COVID-19 pandemic has forced many everyday interactions online: working, learning, socialising, shopping, medical appointments and more. The pandemic has also encouraged experimentation in experiences that have commonly been considered physical. As virtual environments enhance our material worlds and redefine our sense of place, innovative organisations create new ways for people to work, consume, and socialise.

That does not mean that physical and virtual worlds cannot mix. The blending virtual and physical worlds we call “real virtualities.” As this integration happens, virtual worlds will become increasingly realistic, imbued with a greater sense of the physical. Real virtualities will, in short, become so ubiquitous that the current distinction between the physical and virtual worlds will gradually blur. The rise of blended physical and virtual worlds creates opportunities for organisations to offer more value for their customers and employees by enabling differentiated access to their products across a wider set of channels.

A prominent example of this signal is happening in the automotive industry, particularly in the sales cycle of the automotive retail experience. Typically, when you are in the market for a car, you do your research on a website. Then you likely walk into a dealership floor where you are usually approached by the salesperson on the floor, who’s still trying to teach you about the product. Progressive automotive manufacturers and dealerships are realising that by the time a prospect has walked onto their floor, the chances are high that the customer will have already been through an advanced “real virtuality” experience prior to that. This shift to the virtual is changing the dealership’s source of competitive advantage.

The technology around actual virtual realities, or extended realities, play an important role in educating the customer and giving their customer a whole experience of what is on offer before the actual sales call or test drive. It allows the customer to configure according to their own needs, meeting the demand for ultra-customisation, and perhaps even experience the journey of seeing their new car being assembled. The digital and virtual dealership with a full suite of services beyond the sale will also facilitate more effective and pleasurable customer experiences.

An extension of the real virtualities signal is the concept of a “Digital Twin” – the experience of a digital representation of a physical space. This is particularly attractive for sectors like retail, travel, and property development. It makes it possible to have a combination of virtual and physical, pre-buying experiences and product exploration experiences where the whole customer journey is mapped out in an interactive way. Augmented Reality experiences, experienced through a smartphone camera interface or Rayban Stories smart glasses is a natural extension of the Real Virtualities signal of change.


Looking Ahead

Business Futures and Signals of Change is Accenture’s structured approach to identify leading indicators of business change that are most critical for organisations to better shape successful futures. Here we’ve had a look at just 4 of the 6 priority signals, in addition to which there are an additional 19 signals mapped across the time horizons of Today, Tomorrow and Beyond. We expect our Signals of Change framework to constantly evolve as we continue to measure the maturity and acceleration level of the indicators through refreshed research, with new signals also constantly emerging all the time.