In this world of remote work, e-commerce, and telemedicine, meaningful digital connection is no longer a privilege. It is a necessity, and not having it can lead to consequences.

Imagine rushing from the ski slopes to the ER with a dislocated clavicle. The doctors suggest intravenous pain medication while they work to realign the shoulder joint. But first, they want to see the patient’s medical record to make sure the treatment won’t trigger some other health event. A request for the medical record is sent to the patient’s healthcare provider, but the data is stored in a way that’s inaccessible or incomprehensible to the ER software system—delaying treatment.

This sorry scenario unfolds far too often in hospitals.

The problem isn’t that healthcare providers are slow to adopt applications that efficiently store medical records. On the contrary, as a U.S. health report shows, they have overwhelmingly adopted such applications, called electronic health records (EHRs), to save data.

The issue has more to do with disparate IT systems used by different healthcare providers that, though connecting easily, fail to understand one another. Not surprisingly, 91 per cent of hospitals say they can share patient data—implying their systems are connected—but only 62 per cent can do the four basic activities with it: send, receive, find, and integrate.

Such dysfunction has permeated into other industries. Think of how a customer must explain their banking issues anew to every rep they talk to while being shuffled across departments. Or how they might have bought an item online, only to be told days later the order will be delayed due to a supply crunch.

In other words, the issue is interoperability. Or lack of it.

Most IT systems are integrated, meaning the technologies and processes are connected—but not meaningfully, where they understand each other and work in tandem. Interoperability solves that by ensuring disparate systems speak a common language. Within organizations, integration is almost always a CIO matter, while interoperability spans all business units, functions, and operations and starts with the C-suite.

Seeking to help organizations accelerate growth through interoperability, Accenture conducted a global research project last year, including a survey of more than 4,000 senior executives in 19 industries across 23 countries. This research confirmed that a high level of interoperability opens channels for human managers to interact with one another and make better-informed decisions. We found that companies that prioritize interoperability—one-third of our respondents—saw revenue growth six times that of their disconnected peers over the prior fiscal year. We also found that this group is 12 per cent better at improving supply chains and operations, and 16 per cent better at reinventing the customer experience.

GN Group, a global manufacturer of the popular Jabra-branded audio solutions, responded to an 82 per cent surge in demand in the first quarter of 2021 by making its systems interoperable. Using multiple cloud-based enterprise platforms, the company unified its data and connected applications from various functions—including supply chain, operations, and finance. It also simplified processes and trained employees to collaborate with these tools, even while working remotely and digitally.

GN employees can now make decisions based on a single source of data, in real time. If the sales team gets a large order, they can quickly check if procurement has the available components and can generate accurate timing estimates and pricing on the spot—without logging out of their applications. Had GN invested in integration only, this would have possibly led to multiple ad-hoc conversations, a desperate flurry of emails for status updates, and a lot of wasted time and effort.

But interoperability is not something that can be bought off the shelf and deployed quickly; it is a systematic process.

“During times of rapidly changing customer behaviour, organizations adopt new applications quickly to address emerging demands and yet neglect integration. This happens even more in a worsening business environment when budgets get scrapped or downsized, since integration provides benefits over the long term.”

A first step is to start with a modest goal – say within finance/HR first, and then scale by unifying data and establishing the right incentives for people to collaborate.

There are many reasons why aiming for organization wide interoperability can be an elusive goal. First, there are simply too many applications to connect. Our survey found that most large enterprises today have more than 500 enterprise applications, and eight out of 10 say they plan to buy more from multiple vendors in the next two years. Second, connecting across all these apps can seem unnecessary and expensive. Then there’s the issue of prioritization.

During times of rapidly changing customer behaviour, organizations adopt new applications quickly to address emerging demands and yet neglect integration. This happens even more in a worsening business environment when budgets get scrapped or downsized, since integration provides benefits over the long term.

It’s like running a marathon – the organization needs to train with bite-sized steps and achieve smaller success stories before taking on the entire 26.2 miles at one go. But perseverance can result in payoffs, as illustrated by the life sciences industry. Companies with high interoperability grew revenue by almost 10 per cent on average in 2022, while those with low or no interoperability only managed a 5 per cent gain. In contrast, the travel industry, which was hit particularly hard by the COVID-19 pandemic, saw revenue decline by 4 per cent for low-operability companies, but high-interoperability companies were able to quickly pivot their business models and grow revenue by 2 per cent. Leading companies can achieve high interoperability with just 2–4 per cent higher IT and functional budgets.

The next step is to build scale by unifying data and insights. The CEO of a large company told us that getting consistent answers to even simple questions across their business is hard: “If you were to ask me a simple question, ‘What’s my electricity cost?’ I’d have to go out to each of the different locations and ask them. I’ve really got to define pretty clearly what I’m looking for. So, communication has to be crisper and simple.”

And getting the answer is more difficult with multiple systems. For systems to speak a common language and understand each other, data silos must be removed. Doing so dissolves functional silos too. Common standards must be laid down for data decentralization and data sharing—a non-negotiable for higher interoperability.

Making employees feel comfortable with sharing data safely is key here—within privacy and security boundaries. This will reduce duplication of effort and reveal hidden bottlenecks.

The final step is igniting a collaboration mindset. A collaborative culture must come from the top. Our research found that 27 per cent of executives consider a lack of collaboration across business functions a top challenge that leads to low or no interoperability.

One approach to igniting a collaborative mindset can be internal “hackathons.” The bank Capital One regularly hosts such hackathons to improve the customer experience by engaging external developers, designers, and product leaders with the wider team.

However, people can sometimes feel threatened when asked to participate in cross-function collaborative efforts, fearing it will diminish their unique contributions and value.

We asked organizations their preferred methods to increase cross-functional alignment while preserving the unique features of each function. The top choices point to a culture of transparency, overcommunication, and respectful dialogue.

Organizations felt there should be a common framework of corporate objectives pulling everyone in the same direction despite individual functions performing different roles. They also saw value in bringing members from different functions into cross-functional committees, communicating often, and creating project groups with members from at least two or three different teams to enable the exchange of thoughts and ideas and a greater understanding of and respect towards other functions.

Building and improving interoperability across the organization isn’t easy. It can be an extensive endeavor that requires careful planning and event sequencing, from starting small to unifying data to inculcating a collaborative mindset. One in three companies are developing this level of agility. Their secret? Persevering with people and process for a substantial payoff.

The authors would like to thank Gargi Chakrabarty, Senior Editor, Thought Leadership, Accenture Research, for her help with this article.