Cross Industry Collaboration: Creating the enablers for disruptive models


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Information technologies, mature markets, relentless demand for innovation, environmental concerns and the uncertain economy are combining to drive the emergence of new growth scenarios, which are spurring companies to fundamentally rethink their growth strategies.
The vision of an economy as a set of independent industries –each serving its own customers, with its own suppliers and its own innovation chain—is in many ways outmoded. New collaborations are emerging that stretch well beyond historical industrial boundaries, nurtured by mobility, payment systems, open information, energy management and infrastructure development. This new breed of cooperation is all about unlocking synergies and exploring fresh opportunities.
Although in recent years numerous factors have combined to encourage cross-collaboration among different industries, this trend has yet to gain any real traction. The main question is which enablers are missing to spur the development of new cross-industry ecosystems?

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Cross Industry Collaboration: Creating the enablers for disruptive models

  1. 1. Cross-industrycollaboration:Creating the enablersfor disruptive models
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  3. 3. Information technologies, mature markets, relentless demand forinnovation, environmental concerns and the uncertain economyare combining to drive the emergence of new growth scenarios,which are spurring companies to fundamentally rethink theirgrowth strategies.The vision of an economy as a set of independent industries –each serving its own customers, with its own suppliers and itsown innovation chain—is in many ways outmoded. Newcollaborations are emerging that stretch well beyond historicalindustrial boundaries, nurtured by mobility, payment systems,open information, energy management and infrastructuredevelopment. This new breed of cooperation is all aboutunlocking synergies and exploring fresh opportunities.Although in recent years numerous factors have combined toencourage cross-collaboration among different industries, thistrend has yet to gain any real traction. The main question iswhich enablers are missing to spur the development of newcross-industry ecosystems? 3
  4. 4. Growth is increasingly capturedoutside a company’s immediate,natural environmentAccording to a series of convergent What’s more, the intimate knowledge a 3 | Environmental concerns are noAccenture studies, the growth of tomorrow company has of its own customers’ needs – longer viewed as a hindrance towill increasingly come from beyond a through analytics management, for example – business growth, but rathercompany’s immediate, natural environment. might prove very useful to another company, development opportunities thatIn particular, our research has identified five providing an asset that can be developed in can be pursued with partnergrowth territories, each requiring disruptive addition to the company’s core business. enterprises.approaches and collaborative models: The new sources of growth being created Information systems based on open by environmental issues very often need1 | Information technologies and platforms facilitate collaboration between a collaborative strategy across differentincreasingly vast pools of data discrete ecosystems or environments. industries, such as energy, technologyoffer gateways to link previously or construction. For example, energydistinct ecosystems and bring 2 | Emerging markets are pivotal performance contracts might be basedthem closer together. to future growth, but present on cooperation between an insuranceThe surge of information technologies has serious obstacles that can be company, a bank, a construction firmmade them indispensable to designing and overcome with forward-thinking and an energy equipment new products or services. Rapidly disruptive approaches.changing technologies are opening up If they expect to see a satisfactory returnmyriad paths to innovation, while stimulating on their investment, companies have tothe development of capabilities that cannot operate differently in emerging marketsalways be sourced internally. than in mature ones. Developing an offer targeted to emerging markets also means reinventing the right business models, which very often requires cross-industry cooperation.Common or shared information systems figure among the most powerful levers to drive interaction between two ecosystems Extended Ecosystem Rare Interactions Rare Interactions Potential Interactions Potential Interactions Financial Markets Regular Interactions Regular Interactions Regulators Clients Key Industry Common Technology Industry Regulators suppliers A Clients or information Key B Financial Markets suppliers Prospects NGO NGO Prospects Industry A Ecosystem Industry B Ecosystem4
  5. 5. 4 | Projects are now subject to the therefore become a necessity for both and expectations emerge once basic oravailability of financial resources, private and public sector companies, which “natural” needs have largely been met, thenspurring the emergence of new in turn calls for creative business models, companies have to identity new needs andmodels. increasingly based on cooperation. new solutions capable of capturing growthBurgeoning public debt is forcing elsewhere. Also, globalization has vastlygovernments to reposition themselves as 5 | The maturity of Western expanded both the competitive arena andinitiators and no longer as sole specifiers markets is encouraging companies the corporate ecosystem. Consolidation isfor public sector procurement. Indeed, the to define new sources of no longer enough to allow companies togrowth of public-private partnerships is due competitive differentiation retain a hold on a position or a market.mainly to the dearth of state and municipal Although innovative and disruptive Alliances between companies from differentfunding for infrastructure projects. At positionings are often risky and difficult industries can guarantee differentiation andthe same time, the current instability in to achieve, they remain the ones that create novel, distinctive markets has made access to fresh generate the most growth. When thecapital more complicated for many private market becomes more competitive andsector firms. Sharing costs and risks has when new business and consumer needsExamples of cross-industry collaboration Mobile Intelligence Commodity Digital Consumer Retailisation New Energy Commerce Infrastucture training Travel & Banking Retail Retail Agri-business Cap Markets Transport Retail Consumer Utilities Consumer Energy Energy Comms EHT Energy Banking Automotive Utilities EHT Comms Automotive Postal x-Industry Networks • Health and Life Sciences Banking Sustainability Comms • Aerospace and Defence • Digital Citizen and Consumer • Manufacturing Public Energy Service EHTThese cross-industry collaborations are • Enable technological and economic banks and insurance companies. Somestructured to meet multiple objectives: leapfrogging: the Better Place initiative 30% of financial transactions in Kenya• Introduce new financing models based proposes an innovative electric vehicle are now managed via mobile phones.on flexibility and partnership, including solution by federating a large ecosystem • Create greater value and differentiationpublic-private vehicles. For example, to that includes financial partners, utilities in mature and extremely competitivepromote initiatives to reduce its carbon and automakers. markets: energy performance contractingfootprint, the city of Amsterdam has • Develop new markets and opportunities is an area that combines the skills of ancreated a federated ecosystem comprising in emerging economies: in Africa, insurance company, a bank, a constructionenergy grid manager Alliander, the telco m-payment solutions have created a whole firm and an energy equipment installer.KPN and Accenture. new financial services industry thanks to partnerships among telecom operators, 5
  6. 6. Cross-industry initiatives areleading markets forwardToday, there are two main types of cross- as somewhat of a positive byproduct of the capture new growth in demand for transport,industry collaboration, both clearly focused original contract. Moreover, today PPP accelerating the transition to an economicallyon the long-term, but with different contracts are considered to be too complex 1 responsible personal mobility model. Theobjectives: and inflexible. They lock participants in for Better Place battery leasing initiative is• Collaborations formed to secure financing. extended periods (often 20 to 60 years) structuring a new ecosystem, from the• Collaborations designed to invent new and are unable to integrate major shifts in development of EVs with removable batteries business models. technology or environmental concerns. by automakers to the installation of a network of charge and swap stations. TheCollaborations formed to secure PPPs in search of a second wind. innovative system is further differentiatedfinancing are becoming more In the area of municipal services, however, by a flat-rate billing system, with inclusiveflexible and focused on partnering. an entirely different approach is emerging. mileage for a given period. This allowsOriginally, this type of cooperation mainly In the Netherlands, the city of Amsterdam customers to lease an EV equipped withconcerned public-private partnerships, has teamed up with energy grid manager high-performance batteries that can bealthough this broad category in fact Alliander, telecom operator KPN and conveniently charged or replaced. In thisencompassed a wide variety of different Accenture to create an experimental way, Better Place wants to introduce amodels. Over half the PPPs set up in emerging ecosystem propitious to initiatives that will totally new transportation business model bycountries between 1990 and 2001 were reduce the city’s carbon footprint. Looking positioning itself as the provider of an end-concessions or privatizations where beyond the basic commitment to funding to-end network and services solution forcooperation between the government deployment or redeployment of clean electric vehicles. This includes developingand the private sector was limited to the infrastructures, Alliander and the municipality and maintaining a smart grid infrastructurefounding contract . These agreements have created a platform where a diverse and deploying the underlying hardware andobviously included technical and quality array of different sized companies can share software solutions. However, the companyobjectives, but they appear to have been expertise and jointly lead a certain number of behind the project does not itself have all thesecondary to the initial issue of financing, projects to improve mobility and the expertise needed for the different components. environment, thereby benefiting the entire Instead, it has structured the ecosystem community. Amsterdam is but one example interlinking public authorities (who support among the “smart city” initiatives that reflect development through tax credits), renewed interest in both public-private and automakers Renault, Nissan and Toyota (who private-private cooperation based on simple develop and maintain the EV technology), and innovative collaborative business battery suppliers, energy suppliers and models. investors (VantagePoint Venture Partners, HSBC, Israel Corporation). This is a largely The motivation behind today’s cross-industry unprecedented approach that is very much collaborative models goes much deeper than aligned with new sources of growth. just arranging financing and is shifting to the co-construction of disruptive business At the same time, Accenture’s work on the models. future of rail transport has confirmed the emergence of disruptive initiatives involving Cross-industry ecosystems drive multiple industries that are transforming the major technological leaps and way we travel, notably with intermodal business transformations. integration and geo-location services like Electric vehicles offer a compelling journey planners. For example, geo-location illustration of how cross-industry ecosystems could play a new role in managing passenger can usher in major paradigm shifts. As seen traffic in train stations. Tools like these have in Israel, Australia and Denmark, EVs hope to already been successfully deployed in 1 Marty, Frédéric; Trosa, Sylvie; and Voisin, Arnaud, Les partenariats publics privés, Paris: Editions La Découverte, 2006.6
  7. 7. A rich and extensive ecosystem of companies to develop smart cities Equipment Providers • Alstom • Schneider • Bombardier Electric • Bosch • Siemens • Nissan • Thales Energy ProvidersFinance • Alliander • GDF SUEZ • CITI • EDF • Veolia • EnelAnalytics/IT integrationProviders A rich and extensive Construction Providers • Accenture • Microsoft ecosystem of companies • ACS • IBM to develop smart cities • BECHTEL • CISCO • VINCIIT Solutions Providers IT Hardware Providers • IBM • IBM • CISCO • MicrosoftClose-up on the Amsterdam SmartCity ecosystemInitiators Active partners Interested• Alliander • Alliander • Cisco • Albert• AIM • Far West • GVB • Essent • Favela Fabric • Telematica • Plugwise • Accenture • Rabobank • KPN • JC Decaux • Universiteit van • Google • Philips Amsterdam • Powermatcher • Nuon • IBM • Eneco • INGTime 7
  8. 8. airports, as seen in “My Way Aéroport de much denser network than any bank can necessary refurbishment or upgrades toParis”, which geo-locates a passenger in offer, and transfer funds with reduced fees. reduce consumption and instilling behavioralthe airport and suggests itineraries. This M-Pesa enjoyed robust growth by leveraging changes to reduce consumption evenbase could be used to develop new services the telecom operator’s customer base and a below the owner’s target. The company orin collaboration with other stakeholders, migratory population. For telecom operators, ecosystem managing the contract thensuch as GAP Mobile 4U, which sends Gap mobile payment is an additional revenue receives a performance fee based on thecustomers text messages with personal stream due to both network use and the difference between the owner’s target andoffers for deals at the nearest store. More offer of new transaction services. For the the even lower level of actual consumption.generally, very diverse segments of the banking partners, mobile payment providespopulation have now come to expect a low-cost channel to enter a market Here, value can only be created by forminguninterrupted connectivity and virtual with a low-income population and still an ecosystem focused on results rather thaninteraction. Travel is no longer perceived as generate a profit. resources, and capable of deploying expertisea solitary experience, and families, business in construction and energy installationstravelers and teens all want to be accompanied Health services is another area characterized (provided by both large and smallthroughout their trip. Transportation by an innovative development model that contractors), a financing solution (with theproviders, ISPs and, thanks to an open model, integrates information and communications investment repaid by the resulting energya vast array of different businesses can technologies and healthcare. Solutions for savings), and an insurance solution (given thecollaborate to enhance the travel experience remote reading of X-ray images at regional uncertainty of the gains). Germany has beenand address this emerging trend. hospitals have been implemented in Mali. In a pioneer in this type of contract, which is Egypt, Orange has developed teledermatology now being adopted in other countries.Emerging markets offer particularly solutions to offset the shortage of doctors byfertile ground for developing eliminating travel and enabling them to These approaches remain experimentalcross-industry ecosystems focus on diagnostics and advice. The Pesinet insofar as the viability of the models cannotThe fast growth in mobile payment solutions service in Mali, Senegal and Niger provides be fully guaranteed from start-up. But thisin Africa – notably Kenya, where 30% of all remote access to primary healthcare for type of ecosystem necessarily has a positivetransactions use mobile phones – is the children by capturing data and transmitting impact on its environment since energyresult of an alliance between telecom it over the GSM mobile network2. efficiency is the primary, if not the only,operators and banks. This eloquent example source of compensation. This makes itof cross-industry convergence addresses the Cross-industry collaborations essential for the service providers to developvery low percentage of the population with must create greater value and innovative tools, techniques and expertiseaccess to conventional banking services, differentiation in mature and that will further reduce the customer’scoupled with the local retail banks’ lack of extremely competitive markets energy consumption. A virtuous dynamicgeographic coverage. M-payment solutions Energy performance contracts, for example, emerges that reaches beyond the limits of anleapfrog the infrastructure development add value in situations where at first glance individual project to have a positive long-stage, made possible in Western nations by the market seems static; e.g. when buildings term impact on the community ecosystem.the industrial revolution, and simply create are already constructed, customers alreadya market economy. M-Pesa, the mobile have contracts with a utility, and Even though cross-industry initiatives arebanking service introduced by Safaricom in consumption levels are recurrent. With a manifestly a viable and dynamic means ofKenya in 2007, topped 13 million customers performance contract, however, an capturing future growth, they are not yetin 2011. The service lets customers deposit ecosystem of partners commits to reducing widely deployed. Below, we take a closer lookmoney in their account, withdraw cash via a an owner’s energy bill, carrying out any at some of the factors that could encourage their development. 2 TIC et systèmes de santé en Afrique, Note de l’IFRI, juin 20108
  9. 9. How to drive faster emergenceof cross-industry ecosystemsDevelop greater entrepreneurial Constantly focus on proactive systematized approach and tools arespirit and open project platforms coordination essential for key project components,The entire enterprise should be infused with A significant share of project resources must such as management of the business entrepreneurial dynamic, tearing down be allocated to forging links among partners,walls and desiloing the organization. In which means much more than simply In particular, project management mustparticular, this requires a “test & learn” ensuring that everyone is aligned with facilitate the emergence and implementationphilosophy, which sees trials as a learning common objectives or resolving conflicts. of forward-facing business models alignedopportunity, with an exploratory mindset, At each stage, project management needs with the interests of all gauge usage or technical feasibility, for to leverage the wealth of expertise from theexample. Exploring means accepting that stakeholders to multiply the value created Build and maintain open, modular,several possible scenarios may be pursued at and address issues as they arise. Project cross-functional IT platformsonce, welcoming new ideas and innovative management must also ensure open access Beyond project management per se,concepts, and acquiring the knowledge to data and find innovative ways to use the information systems play a fundamentalneeded to implement them. The key to a data storehouse. A balanced collaborative role in deploying and operating these newsuccessful disruptive strategy lies in the project management model is facilitated by ecosystems. In conjunction with leadingability to manage the different aspects of several factors. Objectives and timelines technology vendors, for example, Accenturethese explorations and to chart a course must be clear and shared, the remuneration has developed a platform comprisingto concrete, viable results. of certain partners must be based entirely standardized information services for key or partly on results, and trials and pilot infrastructure (housing, energy management,Accenture’s Intelligent City network is a initiatives must be authorized. Also, a transportation, e-health, etc.). Developedstrategic initiative to support ecosystemsaligned with the environmental and urban An open information platform can integrateplanning objectives of modern cities. It has and make interoperable the criticalidentified key best practices that enable components of an Intelligent Cityeffective day-to-day collaboration among Office andpartners. The Amsterdam Smart City Residentialplatform spans a range of urban planning Buildingsand environmental projects initiated by Public Naturalthe municipality and energy grid supplier Administration ResourceAlliander. A pivotal clause in the partnership and Services Managementagreement stipulates that the platform mustact as a vehicle to cascade best practicesamong partners, SMEs, industrial companies Open, interoperableand local authorities. The platform is “open” platform withnot only because it encourages information intelligentexchange and participant involvement, but Education and infrastructure functionality Transportationalso because it continually monitors the Culturedegree to which engagement andinterdependencies are truly effective. Theopen platform thus becomes the host for thedifferent spaces impacted by the initiative. Waste Health and Management Security 9
  10. 10. with the end user in mind, this standard suite data on their common end customers. There are any number of possible alliancecan be easily adapted to the specific features As a result, the information system is no structures, each with a more or less greaterof each sector. The cross-functional infor- longer simply a function, but rather a impact on their member organizations.mation platform is hosted in the cloud and customer-centric growth driver. Integrating an appropriate, flexibleavailable as a service. This approach has ecosystem can represent the first stepmultiple advantages: new features and Being part of an extended, open ecosystem towards this new strategy, avoiding theservices can be deployed much faster, and supports a shift from a sense of ownership – often costly process of fully meshing with athe platform’s partner companies do not of customers, suppliers, innovations – to a partner that might have a fundamentallyneed to build their own systems. What’s collaborative, networking mindset that different culture and operating model.more, they can all access cross-industry wants to develop ideas and share successes.Cross-industry collaboration structures vary in the degree of integration among the member companies Number of players Alone Several Integrate an appro- Local energy sector priate ecosystem Organic investment Energy leaders Strategic alliance Energy leaders Network of partners Energy leaders Network of partners Automotive equipment, diversified in services, rail, Dedicated subsidiary electricity networks Joint Venture Oil Industry Investment fund Captive funds of industrials Incubator Telecom leader M&A Global energy specialist Impact on the organization, disruption10
  11. 11. Accenture’s viewpointAccenture believes that cross-industry Our DNA and culture make us a natural knowledge of global and local players,collaboration is a fundamental, vector and facilitator for the creation, applying these capabilities to form multiplelong-term trend. deployment and joint operation of these collaborative models. ecosystems. Accenture boasts global andThis has led us to create dedicated units national networks, is developing and We are convinced that this new approachto address the challenges faced by these sharing expertise across every industry to satisfying customer needs by workingnew ecosystems in areas such as mobility and works closely with multiple stakeholders. in cross-industry networks offers a realor m-payment. We have also invested Every day, we are exploring new ways to alternative to more costly conventionalin new solutions based on modular IT share knowledge, structure cooperation growth models. This new paradigmplatforms, which are designed to facilitate among businesses, integrate complex nevertheless requires robust changecooperation between different industries value propositions for our clients and management capabilities and a significantand to support their business models. manage large-scale projects. Accenture organizational shift so that operating brings these clients the benefits of models and corporate cultures can create unparalleled innovation research and and nurture these new opportunities. 11
  12. 12. About the author Cédric Vatier is Director of Strategy and Sustainability, Accenture Management Consulting France. Cédric Vatier works on growth strategies, innovation, definition and implementation of new Business Models. cedric.vatier@accenture.comAbout AccentureAccenture is a global managementconsulting, technology services andoutsourcing company, with approximately236,000 people serving clients in more than120 countries. Combining unparalleledexperience, comprehensive capabilitiesacross all industries and business functions,and extensive research on the world’smost successful companies, Accenturecollaborates with clients to help thembecome high-performance businesses andgovernments. The company generatednet revenues of US$25.5 billion for thefiscal year ended Aug. 31, 2011. Its homepage is © 2012 AccentureAll rights reserved.Accenture, its logo, andHigh Performance Deliveredare trademarks of Accenture.