The tech-powered

operating model
Accelerating performance by design
 About the authors

Paul Jeruchimowitz Kent McMillan Tom Falkowski Jenica McHugh

Senior Managing Director – Managing Director – Operating Managing Director – Operating Managing Director –
Operating Model & Organization Model & Organization Design, Model & Organization Design, Technology Strategy, Global
Design, Accenture Strategy Accenture Strategy Accenture Strategy [email protected]
[email protected] [email protected] [email protected]

Paul helps organizations design, Kent works with CEOs and Tom works with CEOs and their Jenica advises senior executives
implement and optimize large- their teams to design and teams on global operating on how to drive value through
scale integrated operating implement operating models model and organization the optimal management, use
model and business services that deliver on their ambitious design and activation. and operation of technology.
transformation programs. growth, agility, productivity,
and sustainability objectives.

The tech-powered operating model 2

 Seizing the full power of technology goes
beyond cutting costs and driving efficiency.
It’s about using data and technology as
strategic assets to develop speed, agility and
resilience to keep up with customer demands,
beat the competition and grow the business.

The tech-powered operating model 3

 Unlock the full power
of data and technology

Despite significant investments in data and technology, The payoff for companies that get this right is significant:
many organizations struggle to realize their full value. Why? Recent Accenture research found that companies that unlock
They’re using new data and technology in old ways, with the growth combination of data and technology, combined
outmoded enterprise operating models and siloed ways with people, stand to gain a premium of up to 11% on top-line
of working. Eighty percent of executives agree that their productivity—the ultimate driver of profitability and revenue
company isn’t fully leveraging data and technology in critical growth. While the benefits are crystal clear, this research reveals
areas of the business, according to Accenture’s Operating that only 5% of companies are activating the full power of
Model survey of 1,800 executives in 15 countries.1 data, tech and people to boost profitability and revenue.3

But a handful of companies are doing things differently. They’re

embracing Total Enterprise Reinvention—a deliberate strategy An enterprise operating model is how a company is
that sets a new performance frontier for companies and in most organized to execute its purpose, strategy and business
cases, the industries in which they operate. Centered around model. It describes the relationship between business units,
a strong digital core, Total Enterprise Reinvention helps drive geographies and functions and provides guardrails on the
growth and optimize operations.2 These companies recognize degrees of consistency and autonomy across them. The
they need an enterprise operating model designed with data operating model defines how the company will operate
and technology at its core; along with people who are skilled and includes decisions related to structure, governance,
and empowered; and an organization that connects people, processes, metrics and rewards, and ways that people work.
processes and data across the enterprise and a culture
of innovation, creating a boundaryless organization.

The tech-powered operating model 4

 This report explores how an operating model powered by data
and tech can help drive better results across your business—from
operations to customer service and product innovation.

69%
Throughout this report, we refer to data and technology
collectively because it is the symbiosis of the two that creates
value. Technology is required to collect, curate and consume
of executives believe their
data; and data is critical to uncover insights and inform decisions. operating model is unable
to continously adapt.

Designing an operating model with data and technology at its

core offers companies new possibilities to continuously evolve,
stay ahead of the competition and drive better performance.

The tech-powered operating model 5

 C-suite: Current
operating model
Percent of respondents that think their company is able to leverage
the full potential of data and technology across key dimensions

holding them back

Business model innovation: Reinvent beyond
your core business e.g., direct-to-consumer, new 27% 100%
platform solutions

Most executives know their existing operating

model is inhibiting performance and in need of Manufacturing/production, supply chain
an upgrade. According to Accenture research, operations: Transform/optimize and lower cost 23% 100%
e.g., automation, robotics, integrated planning
74% say they need to completely rethink it, and
nearly as many (73%) see at least some risk
Products and services: Create new adjacent
to growth and performance if they don’t.4
products/services e.g., digital products, 22% 100%
monetization of data
What’s more, only about 20% of executives see
their companies fully leveraging the potential of
data and technology in key areas of the business. Enterprise support operations (e.g.,Finance, HR):
Transform/optimize and lower cost e.g., automation, 20% 100%
Many companies are struggling to scale and
shared services/outsourcing platforms
utilize the most important and transformative
technologies across their organizations.
Go to market/customer experience: Grow core
business, scale new e.g., personalization, digital 20% 100%
marketing, e-commerce

Source: Accenture Strategy Operating Model Survey 2022

The tech-powered operating model 6

 Roadblocks
to growth,
performance
While business leaders recognize the necessity About one third (31%) of
of transforming the operating model, they aren’t
business leaders consider
always willing (or able) to take on the challenge.
It’s often complicated by turf wars, internal
resistance to change within
bureaucracy, legacy ways of working, technology their organization to be a key
debt and corporate politics. barrier to redesigning the
operating model.

This has reduced the ability of many firms to

efficiently transform at scale and forced them to
be less ambitious about outcomes. Taking a total
enterprise approach to change management can
help. This can include leadership that creates a
culture comfortable with experimentation; and
aligning incentives that reward business and tech
partnership in adopting the change. Adopting
a consistent strategy and measurement tools
across the enterprise can help break down silos,
overcome resistance and remove barriers.

The tech-powered operating model 7

 Accelerating performance by design
Technology-driven operating models support transformations that are broader and faster than ever Executives in this group are nearly twice as likely as their peers
before and enable continuous, dynamic reinvention. They can also inspire and inform the business to state that data and technology— over other operating model
strategy, delivering new business models and revenue streams. elements—play a much more important role in helping them to
reach their revenue and profitability goals. And they are also more
We identified a small group of companies (15%) that have effectively infused data and technology into likely to report achieving their performance targets across critical
their operating model design. business dimensions:

Our analysis of financial performance over the last three years5, found that these companies delivered
stronger performance than companies that don’t infuse data and technology into their operating Agility to respond to and anticipate changes | 3.3x
model design.
Scale to do more with less | 2.5x

The tech-driven advantage On the other hand

Speed to market, launch and execute fast | 2.4x

Companies with Companies without a

tech-powered Customer intimacy to focus on needs | 2.8x
tech-powered
operating models are operating model are
1.6x more likely to 2.2x more likely to be Innovation to increase differentiation | 2.4x
achieve profitable lagging behind on
growth compared to profitability and Sustainability for more environmental focus | 3.1x
companies without growth
The table shows how much more likely – compared to their peers – executives in
companies with tech-powered operating model are to report that they have fully
achieved their performance targets on a given business dimensions.

The tech-powered operating model 8

 Beyond
A defining trait of these exceptional companies? Their ability to move To follow their lead, companies can reconsider the
beyond the traditional organizational tradeoffs companies have big operating model choices and tradeoffs they’ve

tradeoffs
always had to make, such as choosing between scale and agility. had to make in the past. They’re no longer a given,
Advances in data and technology are enabling companies to do both. thanks to radical progress in data and technology as
Although the need for tradeoffs isn’t eliminated—yet—it is greatly illustrated below.
The art of the possible reduced, giving these companies a clear competitive advantage.

01 02 03 04 05
Core and new Scale and agility Global and local Fixed and flexible Inside and outside
Grow the existing business Respond quickly to customer Make big bets while empowering Maintain a strong core organization Deliver integrated solutions, while
while driving innovation. needs, while delivering local decision-making. that can flex with market changes. leveraging best-in-class capabilities.
efficiently at scale.

Key to getting it right: Key to getting it right: Key to getting it right: Key to getting it right: Key to getting it right:

• Build discrete teams for core • Provide freedom within • Create complementary P&Ls • Develop mechanisms to quickly • Strategically engage and map
and new that share data and a framework of common with shared accountabilities create, deploy and redeploy your partner and customer
insights processes, data and and common data teams ecosystems
technology
• Tap into the ecosystem to • Introduce polices and decision- • Cultivate a culture where • Evolve relationships with
rapidly infuse innovative • Organize customer facing making rights that empower requirements continuously third parties (from vendors
technology talent product teams around growth teams to make decisions closer evolve, and experimentation is to partners) and seek ways to
and shared services teams for to the customer encouraged share in risks and rewards
efficiency and scale

The tech-powered operating model 9

 01. Core and New

Grow the existing business

while driving innovation
There’s always been tension between supporting the
core business while creating new sources of innovation across the value chain. For example, leveraging data
and growth. That often leads to a political tug of and technology makes it possible to maintain the core
war for leadership, support, funding and talent. business, while simultaneously building and testing
prototypes using digital twins and the metaverse.
To avoid this, companies often set up innovation engines Companies can drive multiple innovations at different
and spin-offs with separate P&Ls, structures and cultures. phases of their growth lifecycle at the same time. Most
However, managing many standalone P&Ls is resource- importantly, they can explore the uncharted spaces across
intensive, and there is risk of divergence and duplicative costs. the business where breakthrough innovation is born.

Weaving data and technology through the operating model

design combined with a unified measurable strategy across Only 28% of executives believe
the business and IT, makes it easier to break down silos and they effectively use the potential
integrate these units around shared data and technology
of data and technology to help
platforms that allow people to build the new together quickly.
Removing operational boundaries in this way boosts
continuously transform their existing
innovation by connecting business units and functions business while scaling the new.

What’s key to making it work?

Build discrete teams for core and new that share data and
insights. While upskilling internal talent, tap into partnerships
and vendors to rapidly infuse innovative technology talent
into the core business to leapfrog the competition.
The tech-powered operating model 10
 01. Core and New

Where it’s working

A health tech company is driving innovation by breaking down
organizational silos in favor of cross-functional, agile teams. By
bringing employees with diverse backgrounds and skills together,
the company sparked innovation. As part of this ambitious effort,
it launched an internal innovation program that gives employees
the opportunity to take their ideas all the way to business launch.
The company also prioritized co-creation with customers and
partners as it expanded into new areas.

The tech-powered operating model 11

 02. Scale and agility

Respond quickly to customer needs

while delivering efficiently and at scale
Startups can move quickly to seize market opportunities 78% of executives want to better
because they are often more flexible and data-driven.
address tradeoffs between scale
Large companies may have the advantages of scale, but
the complexity that comes with it can slow them down.
and agility by realizing the full
potential of data and technology.
It’s possible to loosen this tradeoff with a data- and technology-
powered operating model. By digitizing the core value chain—
What’s key to making it work?
both the offer itself and the work needed to deliver it—companies
can achieve scalability while providing the agility they need to
Provide freedom within a framework of common
move fast. They can also manage complexity with less, breaking
processes, data and technology. Establish one set of
from a linear “more growth or scale = more resources” model.
clear standards for the company, while providing the
flexibility for individual organizations and teams to
With centralized data platforms packed with customer,
operate independently within the framework.
partner and supply chain data, companies can make their
processes more agile—everything from budgeting and Organize teams and technologies into two areas:
planning to product management. They can understand “shared service” teams and tech focused on cost
supply and demand dynamics in deeper and more efficiency, fast data extraction and scale; and
meaningful ways, which is ideal in today’s environment. It’s “product” teams and tech focused on customer
all about anticipating and responding to customer needs experience and revenue growth.
and market opportunities while still optimizing resources.

The tech-powered operating model 12

 02. Scale and agility

Where it’s working

When UK-based online grocery Ocado Group couldn’t find technology to
meet its unique needs, it built its own solution. Today its smart platform
powers operations for retailers around the world. The platform not only
provides real-time data to monitor an inventory of 40,000-plus grocery
items; it helps retailers predict whether items will be in stock at the
time of a customer’s scheduled delivery. That reduces substitutions and
enhances customer satisfaction. And its algorithm makes 20 million
demand forecasts a day, which helps reduce food waste while ensuring
customers can find the products they need when they need them.6

The tech-powered operating model 13

 03. Global and local

Make big bets while empowering

local decision-making
Companies often struggle with the power dynamics between hierarchies. It’s a perfect balance. Corporate can identify and
corporate headquarters and local leadership. Local units act on the big bets that local can’t afford, while local offices
have insights into customers, regulatory requirements and can respond to immediate customer needs faster.
markets. But corporate leadership may fear losing control if
decision-making is democratized. When companies close the gap between global and local,
they can push the boundaries for both. Global data and
Defining clear, unique accountabilities across global and insights can be adapted quickly to meet market conditions.
local—with shared ownership for results—is critical. Then And local innovations can be assessed for opportunities to
grounding operating model design in data and technology scale across the business.
can help companies reduce tensions. Data is accessible
across the enterprise while guardrails ensure alignment with
corporate policies. Local market leaders and even frontline Just 29% of executives say their
staff are empowered to make decisions. And companies can company uses data and technology
develop relevant and profitable products and services by
to balance tradeoffs between
focusing on customer needs, not on organizational
global and local interests.

What’s key to making it work?

Create complementary P&Ls with shared accountabilities

and common data. Introduce governance and policies
that empower teams to make decisions locally, without
having to go to headquarters for “permission” if they stay
The tech-powered operating model within global policies. 14
 03. Global and local

Where it’s working

Logistics and delivery leader United Parcel Service is optimizing
routing globally while giving drivers some control over how they run
their routes. Routing is done with global algorithms. But drivers can
share their input based on local conditions—and make the decision
to change the route. The global model then reoptimizes around the
driver’s choices. It’s a perfect blend of sharing data at the edges to
empower the frontline while continually optimizing the core.7

The tech-powered operating model 15

 04. Fixed and flexible

Maintain a strong digital core that

can flex with market changes
Traditional operating models are rarely built with inherent more cross-functional and product-centric ways of
agility and resilience. They are typically designed for working. Teams are more autonomous and aligned with
a more measured and predictable business reality. each other around delivering value. It’s a way to respond
As such, companies face significant inertia in trying better and quicker to customer needs and a changing
to rapidly reorient and set up new teams that often market environment, while keeping the work engaging
cut across their established P&L dimensions. and providing employees with fulfilling careers.

Data- and technology-powered operating models can unlock

business flexibility and maintain efficiency in execution. Only 24% of executives say that their
The right data and operating mechanisms allow companies company’s use of data and technology
to quickly form and deploy teams, track their success and
fully enable the organization to
attribute financial impact back to appropriate parts of
the organization. This fluid matrix is built on a modern IT
become agile.
foundation. Consider enterprise resource planning (ERP). It
must be stable with strong processes and governance. But What’s key to making it work?
it also must be configured to respond to change easily. For
example, companies should have the flexibility to measure Develop mechanisms to quickly create, deploy, and
performance by multiple and changing dimensions. It’s redeploy teams. Cultivate a culture of discovery across the
about configuring financial and non-financial information for organization where requirements continuously evolve, and
decision-making no matter how the company is organized. experimentation is accepted and encouraged.

With collaboration technology and shared data threaded

through how work gets done, companies can unlock

The tech-powered operating model 16

 04. Fixed and flexible

Where it’s working

Sportswear giant adidas expects half of its sales to come through direct to consumer
(DTC) channels by 2025. The company is redesigning its operating model to support
this shift to DTC and create flexibility to respond to changing consumer behaviors.
adidas has invested in e-commerce presence, store network and membership program
to deliver seamless, omnichannel customer experiences tailored to consumers’
preferences. In addition to digitizing stores, adidas is expanding digitization to
wholesale partners, investing in an ERP system and sustainability to bolster its supply
chain and upskilling the workforce to support the new operating model.8

The tech-powered operating model 17

 05. Inside and outside

Deliver integrated solutions while

leveraging leading capabilities
Companies rely on ecosystem relationships for ready- organizations to share data confidently and securely.
made capabilities, skills and expertise to improve In fact, data itself may even become a new business.
their responsiveness and competitiveness. Yet
selecting potential partners means navigating the When companies are ready to partner by design,
ins and outs of aligning the financial relationship, they can quickly amplify the value of partnerships.
capabilities, ways of working and brand purpose. They can expand the ecosystem and leverage
managed services to drive open innovation, access
With an operating model designed with data and capabilities and talent they don’t have, pursue new
technology built in from the outset—not bolted markets and launch new products and services.
on after—companies can decrease the barriers to
entering strategic ecosystem relationships. This is
thanks to a technology foundation that supports 52% of executives say that their
collaboration and interoperability. Companies can company still must overcome the
integrate and share data and talent with partners
barrier of having too few open
more easily, faster and with less cost. Use of intelligent
technologies such as blockchain allows multiple
innovation partners.

What’s key to making it work?

Strategically engage and map partner and customer

ecosystems. Decide the right role in the ecosystem
and evolve relationships with third parties—from
vendors to partners—seeking mutually beneficial
The tech-powered operating model ways to share in risks and rewards. 18
 How to accelerate performance
Companies have an opportunity to set a new performance frontier through Total Enterprise Reinvention and an operating model designed with data and technology at its core.
As advances in technology upend traditional organizational design tradeoffs, they present new possibilities. Whether you are just embarking on your transformation journey or
looking to accelerate, consider the art of the possible. The following five fundamentals are key to realizing the potential and extracting the full value of your data and technology.

01 02 03 04 05
Fuse strategy, operating Break down silos to Design for a digital Establish modular Continuously redefine
model and technology capture hidden value offer and value chain teams and systems work and skills

Design your operating model to Take a hard look at the activities Complexity that was once costly To unlock the full potential of As advanced technologies
use data and technology as both that cut across your organization and unrewarded now presents technology, companies need to such as AI become increasingly
a driver and enabler, a strategic and your ecosystem. Integrated new opportunities, such as AI- implement new ways of working sophisticated, organizations need to
and competitive asset. Make it business planning and new product enabled personalized customer in parallel with implementing new continually redefine how work can
a CEO-led initiative to level set development are two examples of offers. Redesign teams to focus technology. Often we see companies (and should) get done. And revisit
how the business wants to (and where value is created but often on innovation and problem addressing one or the other – using what is done by human vs. machine.
can) use technology to compete falls through the internal “seams” solving, while automating the new technology in the same old Organize work around issues to
and capture market share. Align of siloed functions. Smooth these core value chain. Decouple the ways of working; or moving to agile solve and outcomes to achieve,
funding and incentives to drive the seams with data and technology linear headcount from the typical teaming models without the tech empowering teams to define
change. And establish a culture of solutions that enable real-time business growth and outcomes needed to support collaboration. the “how.” Blur job descriptions
continuous innovation and reskilling transparency and faster data-driven equation. Go beyond using artificial Instead, create customer-centric across business and IT, focusing
at the intersect of business and decision-making. Re-architect these intelligence (AI) and robotics for the multidisciplinary teams on skills rather than jobs. Ensure
technology, working together as processes for speed and agility, low-hanging-fruit of transactional to drive speed to market; and tech talent has commercial skills
co-collaborators to drive success. from annual to increasingly event- activities and focus on driving enterprise platform teams to and vice versa to foster better
driven, enabling teams to respond top-line growth, targeting areas enable scale. And power them collaboration and solutions.
quickly as conditions change. where advanced technologies with a modern digital core and
can add the most value. supporting collaboration tools.

Accelerating
The tech-powered
Global
operating
Companies
model
toward Net Zero by 2050 19
 Transformation doesn’t always require investing
more in data and technology. For many, the key
is getting more value out of what they already
have by redesigning their operating model
with data and tech at the core. Activating it by
building a culture of innovation, collaboration,
and change. Making reskilling a priority. And
continuously reconsidering how work gets done.
With those elements in place, companies have
an opportunity to accelerate their performance
and stay ahead of the competition.

The tech-powered operating model 20

 References

1
Unless otherwise noted, all data is from Accenture 5
For details on the financial performance analysis,
Strategy Operating Model Executive Survey 2022, see “About the research”
fielded August to October 2022 across 15 countries,
covering 1,800 executive respondents.
6
Ocado website, “How we use AI”

2
Accenture, “Total Enterprise Reinvention,” 2023
7
Lisa Baertlein, Reuters, “New UPS navigation tool
aims to save time and money with each turn”,
3
Accenture, “The CHRO as Growth Executive,” December 4, 2018

4
Accenture CXO Survey, 2021 8
adidas, “adidas Presents Growth Strategy ‘Own the
Game’ Until 2025,” March 10, 2021

The tech-powered operating model 21

 About the research Research lead

Accenture Research conducted a survey of 1,800 C-suite executives from Olivier Schunck
companies with annual revenues of $1 billion and above. We conducted the survey
in October 2022 in 15 countries: Australia, Brazil, Canada, China, France, Germany, Principal Director – Thought Leadership Research,
India, Italy, Japan, Netherlands, Singapore, Spain, Switzerland, United Kingdom and Accenture Strategy
the United States. Respondents represented 19 industries: Aerospace & Defense; [email protected]
Airline, Travel & Transport; Automotive; Banking; Capital Markets/Private Equity;
Chemicals; Communications; Consumer Goods; Energy; Health; High Technology; Olivier designs and leads a variety of research
Industrial Goods & Equipment; Insurance; Media & Entertainment; Natural Resources; initiatives that open new perspectives and
Pharmaceuticals, Bio Tech & Life Sciences; Retail; Software & Platforms; and Utilities. support provocative thought leadership.

For the financial performance, Accenture Research analyzed a subset of companies

covered by the survey based on their capacity to grow profitably during and after
the pandemic. Profitable growth is defined as above industry peer set median of
both revenue growth and profit (EBIT) margins. On the opposite end, companies that
achieve below industry peer median profitable growth are lagging on both growth
and profitability. The financial data is sourced from S&P Capital IQ. We applied this
analysis to the identified groups of companies from the survey: those that have
effectively infused data and technology into their operating model design, and, on
the other side, those that have been unable to achieve this.

The tech-powered operating model 22

About Accenture About Accenture Research
Accenture is a leading global professional services company that helps the world’s leading businesses, Accenture Research creates thought leadership about
governments and other organizations build their digital core, optimize their operations, accelerate the most pressing business issues organizations face.
revenue growth and enhance citizen services—creating tangible value at speed and scale. We are a talent Combining innovative research techniques, such as
and innovation led company with 738,000 people serving clients in more than 120 countries. Technology data science led analysis, with a deep understanding of
is at the core of change today, and we are one of the world’s leaders in helping drive that change, with industry and technology, our team of 300 researchers
strong ecosystem relationships. We combine our strength in technology with unmatched industry in 20 countries publish hundreds of reports, articles
experience, functional expertise and global delivery capability. We are uniquely able to deliver tangible and points of view every year. Our thought-provoking
outcomes because of our broad range of services, solutions and assets across Strategy & Consulting, research developed with world leading organizations
Technology, Operations, Industry X and Accenture Song. These capabilities, together with our culture of helps our clients embrace change, create value, and
shared success and commitment to creating 360° value, enable us to help our clients succeed and build deliver on the power of technology and human ingenuity.
trusted, lasting relationships. We measure our success by the 360° value we create for our clients, each
other, our shareholders, partners and communities. Visit us at www.accenture.com

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