The rapid pace of digital advances is creating new opportunities for industrial manufacturers, and shaping a competitive environment where those that can optimize their digital capabilities will lead in the marketplace. Accenture research defines such enterprises as Industry X.0 (IX.0) companies.
IX.0 businesses embrace constant technological change, moving beyond experimenting with digital technologies to combine them in a way that maximizes their value and drives growth. This can include leveraging combinations of advanced digital technologies to continuously accommodate demand for new, personalized experiences. The IX.0 approach will become increasingly critical to success in the industrial market as customer expectations grow for a constant stream of innovative digital experiences and outcomes.
As a strong indicator of this trend around personalization, our digital consumer research, “Engage Me Index,” shows that more than 800 million individual customers surveyed in countries around the globe are eager to consume more personalized experiences thanks to the creation of a variety of digital technologies. These technologies encompass artificial intelligence (AI), augmented and virtual reality, mobile computing, 3D printing, Big Data analytics, blockchain and machine learning.
Companies need to be able to take advantage of this increasing demand for personalized experiences. However, to do so will require that they make necessary investments in new technologies. Our research suggests that over the next few years, up to 80 percent of the required funding will need to come from aggressive cost reduction programs, enabled by automation, AI and other emerging technologies to release trapped value. The remaining 20 percent required will come from new business models.
Optimizing digital
Adopting six imperatives that are at the heart of the IX.0 approach can help industrial companies master digital change and grow from it:
- Build core engineering and production systems around digital technology to ratchet up new levels of efficiency across the operation that will ensure physical machines and software systems are synchronized. Doing so will unlock previously undiscovered cost efficiencies, thus increasing cost investment capacity.
- Focus on delivering hyper-personalized customer experiences, as this will become increasingly important to sustaining success in the changing marketplace. IX.0 companies, for example, use their investment capacity to create experiences through digital interfaces that provide multiple smart touchpoints throughout the offering’s lifecycle. Using this strategy helps these companies grow their business by maintaining long-term engagements with customers.
- Develop new business models that provide differentiated value for customers, and create new revenue streams for the organization. Building smart and connected offerings from the ground up also helps the process by integrating value that might have been overlooked during the creation stages of existing products or services.
- Expand the organization’s ecosystem. As manufacturers equip existing workers with new digital skills and attract new talent, they will need to evolve their ecosystem to reflect and enhance this shift. A modern ecosystem engaging suppliers, peers, distributors, startups and customers can expand the digital value chain and help widen the resources needed to create new innovative products and services.
- Maintain a digital-ready workforce and encourage collaboration between people and machines. Managing digital disruption will require sourcing, training and retaining talent with digital skills. Embracing IX.0 also will mean creating new jobs, entirely new roles and new responsibilities for existing roles.
- Manage the wise pivot, in which industrial manufacturers will need to continually balance investment and resource allocation between their core businesses and new ones to synchronize innovation and growth. Developing this skill can help companies become adept at combining the right digital technologies to produce the right experiences that customers value at the right time.
Leading the way
Demand for personalized experiences will continue to grow, propelled by constant digital innovation. Industrial manufacturers should seriously consider adopting an IX.0 approach that can help them sustain leadership in a rapidly evolving market.
>>Brian Irwin, [email protected], is managing director, automotive and industrial, North America, and products Industry X.0 consulting, for Accenture.
