With the offshoot of the fourth industrial revolution, businesses have been forced to embrace growing trends in technology and invest in innovative solutions in a bid to stay competitive. This decision, according to Accenture, a professional services firm, has however been mostly unprofitable as businesses return on innovation investment has been found to have declined by 27 percent over the past five years.
The reason for this development, according to Accenture, is as a result of businesses not yet mastering new technologies that can deliver personalized realities and experiences for customers, employees and business partners.
Niyi Tayo Accenture’s technology managing director said, Accenture Technology Vision 2019: “The Post-Digital Era is Upon Us – Are You Ready for What’s Next?” highlights the ways in which organizations must use powerful new technologies to innovate in their business models and personalize experiences for their customers.
At the same time, leaders must recognize that human values, such as trust and responsibility, are not just buzzwords but critical enablers of their success.”
The firm’s new research showed that more than half (57 percent) of businesses making significant investments in innovation have underperformed against industry peers when it comes to growth or market value.
At the same time, the professional services firm disclosed that almost one-third (29 percent) of businesses surveyed expect to increase their investments in innovation by more than 50 percent over the next five years.
“The fact that return on investment overall is dropping is a worrying trend. Business are spending more than ever, but their inability to see proper returns is shocking,” said Toluleke Adenmosun, MD financial services at Accenture.
“One of the reasons for this could be that many organisations still see innovation as a peripheral activity separate to the core business; an “ad-hoc creative process” rather than a set of practices that will fundamentally change their way of doing business. It’s like going jogging once a month and then expecting to be able to run a marathon.
“Over the last five years, roughly $3.2tn was spent on innovation worldwide. Yet, the study shows it is not how much you spend that matters, it is how you spend it. The companies bucking the trend and seeing the biggest returns are investing in bold, watershed moves rather than incremental shifts.”
“The companies reaping the biggest rewards show a “go big or go home” mentality by investing in truly disruptive innovation projects,” added Toluleke “They don’t just tinker around the edges.”
Toluleke also argued that some companies just chase the latest tech trends without thinking about how to connect what they’re spending to the biggest problems or opportunities in their business.
The research revealed that there are seven key characteristics that are adopted by companies deliberately driving innovation.
It said “high growth companies apply innovation practices to change their way of doing business more fundamentally so that they can become; hyper relevant, network powered, technology propelled, talent rich, data driven , inclusive and asset smart.