Research Report
Reinvention in the age of generative AI
10-minute read
January 11, 2024
In brief
- Disruption is on the rise and reinvention is becoming the default strategy for success in turbulent times.
- Reinvention works, and reinventors are pulling ahead of the pack, creating an imperative for others to act.
- Generative AI represents a clear opportunity to accelerate reinvention and close the performance gap.
- We see five imperatives the C-suite must address to reinvent in the age of generative AI.
Reinvention is the strategy for success
We predict that over the coming 12-24 months there will be a significant uptick in companies who embrace generative AI as a catalyst for reinvention.
Why is generative AI different from other technological innovations we’ve seen in recent years? This technology has the power to reinvent every facet of an organization. This is new. Through our work, we see empirical evidence that this trend is already in motion, particularly as generative AI rapidly disrupts every industry.
Disruption meets its match
Organizations are still operating in an unsettled landscape. The annual Accenture Pulse of Change Index found the rate of change affecting businesses has risen steadily since 2019 — 183% over the past four years. In response, 83% of organizations have accelerated the execution of their transformation since last year.
Disruption is up 33% year-on-year
Accenture Pulse of Change: 2024 Index
Reinvention landscape
Many organizations are keen to reinvent — some are further along in their journey than others.
A small number of “Reinventors” (9%) have already met the high bar of building the capability for continuous reinvention. They’re making swift progress in executing their strategy and setting out to define a new performance frontier with technology at the core of their reinvention journey.
Among the largest companies, especially those with revenues over US$50bn, the number of Reinventors has quadrupled in the past year. Industry giants are not standing still. Unlike the digital revolution, the largest companies are taking an early lead, leveraging their substantial investment in building their digital cores and talent. Two industries saw double-digit increases in the number of Reinventors: in software and platforms the figure is up 34 percentage points to 43%, and in life sciences it’s up 13 percentage points to 20%.
Most organizations are still at the beginning of their reinvention journey, with few reinventing at scale today. Similar to last year, the majority (81%) are “Transformers.” Transformers should keep going. They are taking many of the right steps toward reinvention — however, they are less likely to be building sustainable capabilities to reinvent continuously and may be missing the speed and cost efficiencies from a connected strategy of reinvention. And we see a financial performance difference, with Reinventors pulling ahead. The remaining 10% of “Optimizers” are organizations where reinvention isn’t currently a priority.
Reinventors are creating an imperative for others to act.
We expect Reinventors to grow the value gap significantly in the next three years.
Why generative AI shouldn’t be underestimated
In the past several decades, we haven’t seen any other technology with the potential to materially impact every aspect of a company — this is why we connect generative AI and reinvention. The only way to realize generative AI’s full potential is to embrace the need to reinvent processes and talent, while managing the technology through a new capability commonly referred to as responsible AI — and with a digital core that has a data and generative AI backbone.
Generative AI has become an extraordinary force in enabling reinvention and accelerating organizations’ progress toward a new performance frontier. Some understand this potential and are taking action. We’re seeing this among Reinventors, and also among a group of Transformers that we expect to leapfrog today's leaders by applying generative AI more intensively to their business.
What Reinventors know:
- Generative AI is unique in its ability to impact the entire value chain and to drive productivity and growth in a way that establishes a new performance frontier.
- Achieving reinvention through generative AI is only possible by developing end-to-end business capabilities, rather than the more common function-by-function focus on individual use cases.
- Developing end-to-end capabilities requires extensive and coordinated changes across processes, people and technology. Processes need to be redefined, people need to be reskilled and a data and generative AI backbone needs to be built into the digital core.
Generative AI in action
Reinventing today to lead tomorrow
Generative AI represents a clear opportunity to accelerate reinvention. Based on delivering more than 700 generative AI client engagements and our research, we see five imperatives that the C-suite must address to reinvent how their businesses operate. We explore these imperatives, showcasing examples from our clients to illustrate them.
01
Lead with Value
Shift the focus from siloed use cases to prioritizing business capabilities across the entire value chain, based on an objective assessment of the business case, enterprise readiness and the corresponding return on investment. Companies can pursue generative AI investments in two categories: "no regrets" investments that offer productivity improvements and "strategic bets" that offer truly novel competitive advantage including reshaping how industries operate.
02
Understand and develop an AI-enabled, secure digital core
Companies need to elevate IT for the age of generative AI. Connect disparate data sets and technologies via an AI-enabled, secure digital core. Generative AI requires a fundamentally different enterprise architecture in which data is more fluid, and unstructured and synthetic data become much more important. It places higher demands on infrastructure, and IT operating models will need to change. Reinventors prioritize their digital core as a key competency.
Explore our new “Reinventing with a Digital Core” research report to learn more about the benefits of a reinvention-ready digital core.
03
Reinvent talent and ways of working
Success with this latest tech revolution requires leaders to set and guide a vision for reinventing work, reshaping the workforce and preparing workers for a generative AI world. Companies must quickly clarify how work needs to be reinvented and reshape the workforce accordingly. This will require skills-based HR and continuous learning across all levels of the workforce, including the C-suite. Success requires putting people at the heart of change, and it will mean leaders with different skills. As leaders acquire necessary new skills for the age of generative AI along with the workforce, they can better drive reinvention across entire value chains and business processes.
04
Close the gap on responsible AI
Design, deploy and use AI to drive value while mitigating risks, including bias and harm, liability and compliance, unreliable outputs, confidentiality and security, sustainability, and workforce transition. Given generative AI’s speed of evolution and adoption, these risks need to be a focus now to avoid challenges later, including regulatory costs. The vast majority (96%) of organizations support some level of government regulation around AI, but just 2% of companies have self-identified as having fully operationalized responsible AI across their organization. Closing the gap requires a plan that moves from commitment and frameworks to action on the ground.
05
Drive continuous reinvention
Change is constant, so reinvention never ends. Leaders cannot approach reinvention as a contained effort undertaken every few years. They must build the capability to continuously reinvent. Enterprises that not only survive disruption but come out on top are those that are in perpetual motion. Companies must constantly build their organizational agility. It’s a switch to a state of openness to new thinking, requiring a cultural and operational mindset for continuous change, powered by a flexible digital core that supports generative AI at pace and at scale.
Industry perspectives
Visit one of our generative AI studios around the world to explore ways to reinvent your business through the responsible use of generative AI applications. Read our report for more detail or contact us.