Sustainability, Cloud and AI for a Buoyant 2022
Estimated reading time: 5 minutes
By Ryoji-Sekido, Senior Managing Director, Accenture Technology Lead for Japan, China, Asia Pacific, Africa and Middle East and Executive Vice President, Accenture Japan.
The pace of digital change in business shows no sign of slowing in 2022. Based on macro developments and Accenture’s research, we will see further strides made around sustainability, cloud and AI in 2022.
Three winds of digital change
Firstly, as we inch closer to 2030, industry and business will continue to push the sustainability agenda forward. In 2022, building sustainable ecosystems will be vital as organisations begin aligning their business imperatives with going green. With sustainability assets in APAC up by 54% to US$1.2 billion from just S$800 million a year ago, more APAC business leaders are beginning to prioritise investments in sustainability over the next two to three years, particularly in areas adopting sustainability targets in line with Agenda 2030 (42%); upskilling or recruiting talent with sustainability expertise (25%); and establishing core sustainability governance (24%).Tomorrow’s strongest performing businesses are likely to be the firms that unearth new value at the intersection of digital technologies and sustainability.
Secondly, we see 2022 as an opportunity for firms to further optimise their cloud investments. Over the past two years many firms have accelerated cloud deployments for business enablement. In fact, cloud spending in the first quarter of 2020 was nearly triple that of the previous year.
There are multiple benefits of adopting cloud, specifically in Asia Pacific (APAC), as we found that organisations that treat cloud as an operating model for innovation were able to achieve 1.5 times more cost reduction and 3.7 times increased innovation as opposed to their peers. We see the focus shifting in the new year towards the optimisation and strategic expansion of cloud architectures.
Lastly, AI will be another key accelerator for many business operations moving into 2022. In fact, 84% of C-suite executives agree, believing that they must leverage AI in order to achieve their growth objectives. This has tremendous impact on businesses, and we have seen how companies that have managed to scale AI solutions are able to achieve nearly two times the success rate, and three times the return, from their AI investments as compared to their competitors. We expect to see spending by APAC organisations on AI platforms and applications surge from US$753.6 million in 2020 to US$2.2 billion by 2024.
How ready are you to embrace these three winds?
The region on a whole is signalling a shift towards an increased emphasis on sustainability. Couple that with the growing allure of going green, and we see many companies placing sustainability at the core of their business – especially in an era where investors and the global marketplace are demanding it.
Organisations need to look at making technology itself more sustainable as well as using technology to become more sustainable. Both are critical ingredients for addressing sustainability.
New technologies such as AI, blockchain and quantum computing will further compound the amount of energy required by technology. However, other technologies such as smart building systems, robotics and digital twins can help make organisations more efficient and shrink their carbon footprint.
Within APAC, there is also an abundance of growth opportunities in cloud, but they are still untapped. Accenture research shows that only 20% of APAC companies are cloud champions that have adopted the full spectrum of cloud capabilities.
With cloud entering its “prime time,” we will see more APAC companies looking at not just cloud migration, but also cloud value maximisation – but this requires a whole-of-organisation approach and cultural shift, not just a siloed deployment of technology. The retail and consumer product goods (CPG) industries, for example, can benefit from leveraging cloud optimisation and strategies to keep pace with the ever-evolving consumer demand for an always-on, personalised experience, in addition to operational efficiencies.
When it comes to AI, there is a pressing need to use this quickly maturing technology solution to fuel innovation. Particularly since rapid change is now the norm across all industries, using AI to capture new insights will help in realigning operations and processes to support organisations in their innovation goals.
While AI is a C-suite priority, organisations sometimes face difficulties in setting up an organisational structure conducive to the application of AI. They often grapple with a lack of foundational data capabilities and low levels of employee adoption as they move to scale AI company-wide.
Capitalising on these three winds
We fully expect every business to be a sustainable business in the future. Companies that are already accelerating their digital transformation because of the pandemic can look to adopt green IT and make data-driven decisions to optimise their supply chains to generate cost-effectiveness and lower their carbon footprint.
Cloud optimisation and migration can also unlock new opportunities in the green arena. By analysing energy consumption across data centres, firms can better understand the impact of their cloud usage on emissions and make plans to reduce them significantly. For instance, we leveraged the green cloud advisor capabilities of our platform myNav with a mining company, and as a result determined that they could realise an estimated 90% reduction in the carbon footprint of their data centres through cloud migration.
Beyond migrating, firms will also have to develop proper cloud estate management plans, in order to continue maximising the value of their cloud investments. This is sometimes difficult to achieve, as skills that appear foundational for cloud one day, could be obsolete the next. Their operating models should go beyond looking at technical skills and focus on business strategy, design thinking, and industry-specific skills. While finding the right people with the right cloud skills is challenging in an era of fierce talent competition and continuous reskilling, turning to third parties to manage the cloud estate is also a plausible solution.
In terms of accelerating business outcomes in AI, companies can look to use AI to extract the full value from their data. This comprises developing a robust, unified data and AI strategy right at the start of the cloud journey and engaging with the wider AI ecosystem.
Recovery and transformation
With the uneven recovery in APAC, we will see a steady drumbeat of digital transformation, as policies, infrastructure, business priorities, social compacts and lifestyles continue to change. The key question for decision makers: do you have the right set-up for a culture of constant change, innovation and growth?