Digitizing industrial equipment operations to improve performance, market value and growth in the era of Industry 4.0 has become a given. But many organizations are still finding it difficult to fully realize the benefits of digital adoption, according to new Accenture research. There is a possible solution that should be considered.
Nearly half of the surveyed equipment makers (42 percent) indicate that they are struggling to combine the right mix of digital technologies to produce more efficiency and value. This challenge tops a list of five cited that are impacting the ability of companies to capitalize on the promise of digital. Other reasons cited include insufficient data security, the inability to measure digital performance, a lack of skills needed to deliver value, and immature ecosystems incapable of driving innovation.
OEMs that cannot overcome these challenges—especially blending the right combination of such winning technologies for the sector as artificial intelligence (AI), blockchain technology, Big Data and robotics—run the risk of missing a wealth of opportunities. Harnessing the power of digital can no longer be viewed as an aspirational goal, but rather a necessity to remain competitive, add value and grow.
To start, OEMs should look for greater efficiencies within the organization’s four walls. For example, aligning the right skills with AI can produce incremental savings of 20 percent and generate additional market value gains of 12 percent—aiding new business growth. A new book, Human + Machine: Reimagining Work in the Age of AI, developed from Accenture research, also reinforces the need to extract the full value of winning technologies.
Most important, OEMs should consider developing a performance blueprint that maps out not only strategic alignments between technology and business objectives but identifies a process for generating the most value for the organization.
There are five key areas of value generation OEMs should focus on to bridge the gap toward effective adoption of rapidly evolving digital technologies.
- Assess value potential.Focus on identifying the potential cost savings and gains in market value enabled by digital technology.
- Anticipate talent needs.Assess the existing workforce in terms of evaluating the availability of talent and skills required to develop, integrate and maintain the technology and the current demand and supply for talent and digital skills.
- Determine value adequacy.Consider the growth in venture capital investment, as well as the number of mergers and acquisitions related to a technology over the past three to five years. This will help determine whether it can enhance the performance and increase the value of the organization.
- Gauge ecosystem maturity.Analyze the availability of widely accepted standards and protocols for the technology in question. This includes researching efforts that have been made to address interoperability challenges, determining the number of consortiums, including academic and industry-specific, formed to advance the technology, and the number of startups dedicated to advancing it.
The survey reveals that, though 65 percent of OEM executives believe their digital investments are designed to achieve strategic priorities, only 14 percent of the executives feel their ecosystem is ready to help drive value with digital.
- Intensely scrutinize adoption.Consider a variety of sub-elements, including the number of use case applications built using a technology, the number of them that have made it to commercial deployment, the estimated growth in technology spend, the number of companies investing in and/or developing the technology or related offerings, and the C-suite perception of the technology’s capability in terms of improving efficiencies and delivering new experiences.
Growing demand for customized products, services and experiences, largely influenced by rapidly evolving digital advances, will only accelerate and become more elusive. Industrial equipment companies that can create a robust evaluation plan that focuses on balancing the right combination of digital technologies will be in a better position to increase their value and their ability to grow in the OEM market.