Gene Reznik shares advice for businesses changing their strategies to fend off disrupters, while pointing out the numerous benefits of ecosystem partnerships.
With two decades of experience behind him at Accenture, Gene Reznik has served as the company’s chief strategy officer since September 2018.
In this role, Reznik is responsible for all aspects of the company’s strategy and investment, but the areas he specialises in are ecosystem strategy, ventures and acquisitions.
Reznik spoke to Siliconrepublic.com about the importance of forming and maintaining ecosystem partnerships in today’s world, while pointing to the mistakes businesses have made in the past that can all be learned from.
Many businesses are feeling immense pressure from external disruption. If they’re already feeling this pressure, is it too late to leverage automation or AI into their business strategies?
I don’t think it’s really ever too late. It’s always important to start. When that start is will be driven by the forces of disruption in a company’s respective industry. If they’re feeling in the retail space that e-commerce is really disrupting their business and customers aren’t shopping up to their stores … then that’s starting to take effect.
They’ve got to hurry up. If [they] can’t keep [their] stores full, it’s going to be very difficult for them to continue to be effective. So, while it’s not too late, I think disruption dynamics for different industries create a different level of urgency.
If you look at all of the e-commerce activity, if you look at Amazon and others moving into online commerce, a lot of the retailers – whether it’s Walmart in the US, or Tesco in Ireland – they’re all trying to figure out how to really accelerate their rotation. They’re looking for where they can combine their e-commerce and in-store experience to really fend off the disrupters.
Accenture has actually published something that we call a ‘Disruptability Index’, where we actually look at which industries are under pressure today and which industries we expect to be under pressure tomorrow.
Aside from retail, which industries are experiencing that real sense of urgency at the moment?
In the automotive industry, we’ve got disrupters like Tesla changing the game and changing the customer experience. The customer experience is being set by the Ubers and the Lyfts of the world.
A lot of the automotive manufacturers are looking to partner with a Microsoft or an Amazon to really accelerate the rotation of the connected car, or to even share technologies like we saw with the recent announcement between Volkswagen and Ford. There’s a lot of activity in the automotive industry.
So far, how have businesses been performing when it comes to forming new strategies in these areas?
They’re getting it going. If you look at the announcements, most of them have been made in the past year, or 18 to 24 months. They’re getting mobilised.
Once they’ve made a commitment to each other around what they’re going to do, they’ve got to worry about execution and creating a comprehensive and strategic transformation programme. For a lot of them, that’s where they’re currently focused.
When a business decides it’s time to create a new strategy and adapt, what do you think the most important starting point is?
I think a lot of the cloud providers have become the epicentre of technology’s infrastructure. Having a very clear cloud strategy while forming and anchoring relationships has to be one of the first and most important places to start.
Then they have to think about the broader technology ecosystem and migration of legacy and modern applications to the cloud. How do they want to work with enterprise providers like Salesforce, SAP and Oracle? How do they want to work start-ups into their ecosystem agenda?
What we’re seeing now is a really comprehensive ecosystem strategy approach, and a clear path that a lot of companies are on is to build out their technology ecosystem for tomorrow.
If companies want to use ecosystems to accelerate their digital agenda, they need to look at it extremely strategically. Increasingly, we see these partnerships with the big technology vendors as being a major catalyst for digital transformation, for rotation of their businesses. This is why we believe it becomes a CEO-level agenda, not a CIO-level agenda.
Does this tend to be more challenging for established companies, or companies that are just starting off?
I think it tends to be more difficult for the larger, more established companies because they have grown up a certain way. They have a lot more legacy infrastructure, they have a lot of institutional ways of doing things.
I think if you partner with one of the more emerging players like Amazon, Google or Microsoft, then clearly the way you do things, how you approach things, the speed at which you operate all needs to be reinvented and reimagined.
From your observation so far, what is the most difficult part of forming an ecosystem partnership?
The most difficult part is actually getting the value that each of those parties expects, which was the reason why they wanted that partnership in the first place. I think a lot of the reason we see partnerships being formed is – we track the number year on year and it’s accelerating – it suggests that increasingly large companies are looking to leverage with technology companies to accelerate their digital agenda and their pivot to the new.
I think the dialogue right now is where the hardest part is. It’s ultimately getting the partnership operationalised and delivering the expectations that these parties have from it.
What are the biggest mistakes that companies have been prone to making when they shift their business strategies to leverage AI or automation?
There have been lessons learned here. I think, first off, everybody’s sort of realising that the hard work comes after the announcement. The heavy lifting starts once the ecosystem has been set. Now you have to drive the value out of the partnership.
Besides that, another thing that companies really worry about is what we call vendor lock-in. Particularly with cloud providers, there is a concern that if you build your next-generation business with one cloud provider, and eventually you want to move or you’re not happy with the service or the pricing, how easy or difficult is it to migrate to another provider?
I think with vendor lock-in, you need to ask yourself: should we do one strategic deal with one partner? Should we build a relationship with two partners and manage them in parallel and make sure that neither one of them has too much leverage? I think that’s where a lot of the disruption is going to be centred today. I think there’s a lot of companies dealing with this stuff and it’s a strategic issue to not get locked in.
So, where is Accenture building these partnerships at the moment?
Accenture has a long heritage of strategic relationships with companies like SAP, Oracle, Microsoft, Salesforce. That’s where we come from.
Over the past five years, we’ve done a couple of things. We have elevated and formalised our strategic relationships with the companies that I just mentioned. We are also forming strategic relationships with the next generation of leaders – AWS [Amazon Web Services] Business Group etc. We have a strategic partnership with Google, the Accenture Google Business Group.
We’ve effectively leveraged these relationships to build capabilities, skills and solutions around the ecosystem partners that our clients are choosing to partner with. We’re also investing to build strategic relationships with start-ups – we have nearly 100 start-ups with whom we have partnerships that we monitor.
Developing our ecosystem has been a big strategic initiative for Accenture. It’s something we’ve invested a lot of time and money into.
We work on our innovative agenda in hubs like The Dock in Dublin. It’s such an important part of what we do.
We’re working there with a company called Kuka Robotics around manufacturing and how we can augment the worker with technology. That’s also where Accenture partners with Microsoft for the biometric initiative to create a digital identity, ID2020.
The Dock, for us, is a place where we bring our ecosystem partners, we bring our clients, we develop solutions. In centres like The Dock we can work with leading technology companies but also really connect with our clients. We have multiple locations like this, but Dublin’s is the most prominent.