What you need to know
As businesses navigate through an era of unprecedented digital transformation, the concept of a "digital core" has become a cornerstone for sustainable growth. Accenture defines the digital core as the critical technology capability, which varies across companies and industries, that can create and empower reinvention. The digital core is not just about technology; it's about integrating processes, data, and infrastructure in a way that allows companies to operate more dynamically and responsively. By centralizing essential business functions and data analytics, a digital core enables organizations to leverage real-time insights and respond more adeptly to market demands.
Digital cores are essential for harnessing the capabilities of evolving technologies such as AI, machine learning, and advanced data analytics. They provide the infrastructure needed to support these technologies, ensuring that they are effectively integrated into the business environment.
Where did the term “digital core” come from?
The term “digital core" was coined by Accenture in 2022 when we discovered and tested the set of critical technologies needed to drive a reinvention strategy. This discovery was based on our global surveys and experience with thousands of clients as they strove to break away from the pack and set new performance frontiers. We found three groups of distinct but constantly interacting technologies that make up the digital core: digital platforms, data and AI, and the digital foundation, which includes composable integration, cloud-first infrastructure, a continuum control plane and security.
What's the magic behind a digital core?
The power of a digital core lies in its ability to seamlessly integrate various functions and technologies across an organization. This integration allows for more efficient processes, better data management and enhanced decision-making capabilities. It also uses advanced technologies like AI and machine learning to automate and optimize operations, which can lead to significant improvements in efficiency and effectiveness.
How does a digital core empower organizations?
A robust digital core is instrumental in driving business transformation. It allows organizations to be agile, making it possible to adapt quickly to changes in the market or industry and integrate emerging technologies. For instance, with a digital core, businesses can streamline their operations, enhance customer experiences and open new revenue streams by leveraging data-driven insights. According to a recent study, companies with a strong digital core report faster growth and higher profitability compared to their peers. They’re also reinventing more functions and realizing more value from gen AI. [See What is generative AI?]
Why is there so much buzz surrounding the digital core?
The excitement around digital cores stems from their ability to help companies to adapt to changes efficiently and compete effectively in increasingly digital marketplaces. For example, they enable companies to rapidly integrate emerging technologies, such as gen AI, and use them to gain first-move and fast follower advantages. Gen AI is just today’s disruptive technology—a strong digital core will help companies take advantage of the next new transformative tech. Moreover, as businesses generate more data, the need for robust digital infrastructures that can handle, analyze and leverage this data effectively is becoming critical.
Hype, or reality?
While the concept of a digital core might seem like the latest buzzword, its impact on organizational agility and competitiveness is tangible and significant. Companies that have invested in building a strong digital core are already seeing benefits in terms of operational efficiency, customer satisfaction and innovation capacity. As digital transformation continues to be a priority for businesses, the role of the digital core is only expected to grow.
Digital core terms to know
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Composable Integration
Seamlessly combining different technologies and processes into a unified system.
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Digital Platforms
Rationalizing applications into platforms that enable business vision and imperatives activate new performance frontiers and generate the greatest value for the organization.
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Technical Debt
The cost in terms of money and effort required for a company to keep its IT systems up to date and capable of meeting business needs.
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Cloud-first Infrastructure
Elastic infrastructure and services spanning public cloud, private cloud and edge that are configurable, consumable and automatable.
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Continuum Control Plane
A way to simplify hybrid, multi-cloud estates through end-to-end engineering and operations visibility.