Leading industrial companies are moving toward greater use of automation. Some are harnessing data at scale to power intelligent operations. But while real progress is being made, there’s an outstanding opportunity for companies across the sector to go further. When it comes to being future ready, new research from Accenture shows that as many as 94% of industrial companies could accelerate their journeys to intelligent operations. How? By maximizing the strategic value of data, process transformation, future-ready talent, and new digital technologies.
Cost cutting doesn’t cut it
Up to now, industrial companies have often been reactive in their approach to business transformation. They’ve favored tried and tested methods—such as brute-force cost reduction—to ensure profitability when a cyclical downturn was imminent.
In an increasingly intelligence-led, digital world, a new approach is needed. Everything moves much faster than it used to. Companies in every industry now need to respond quickly to new customer requirements, end-consumer expectations, and technological possibilities. They need highly agile operations that can sense change and then pivot to new opportunities.
Reactive cost-cutting exercises won’t deliver those kinds of agile capabilities. To become truly future-ready, many industrial companies need a strategic rethink of the whole operating model and technology plan, building in the smart orchestration of both human talent and machine intelligence. Using insights from data and machine learning, they’ll enable predictive, preventative, and autonomous operations across the whole business.
Of course, companies won’t create these kinds of intelligent operations overnight. There needs to be a carefully considered journey of increasing technology, data analytics, and skills maturity. At the same time, given the rapid pace of change, there is a real sense of urgency. Action is needed now, at scale.
Three priorities for the near term
So how can industrials improve their future-readiness? There are three areas to focus on: data, talent, and technology.
1. Get more value from all that data
Industrial companies can now access vast amounts of data. That includes not only the obvious sources—like operational data from ERP systems or customer data from point-of-sale systems—but also the broad external data sets that many organizations don’t even consider.
For example, how many OEMs are analyzing indicators from the consumption end of their value chains? Leaders are doing this to uncover invaluable information to predict demand patterns and understand what’s coming down the road. Others need to do the same.
Combined with advanced data analytics—including machine-learning tools—this kind of creative thinking about data can transform industrial companies’ demand forecasting abilities. This, in turn, allows them to fire up their supply chains proactively, avoid last minute surprises, and meet rapidly evolving customer expectations effectively.
It’s all part of a wider shift from selling a product to delivering customer outcomes. And it needs the whole business to be able to leverage data at scale—the back office just as much as front-line operations.
2. Cross the talent gap
It’s not just about having the right data. A business needs to know what to do with it and how to understand what it’s saying. And that means having the right people with the right skills.
A refreshed talent strategy to complement the data strategy is another priority for industrials. Companies should be looking to retool existing talent and/or bring in resources with experience in analytics and data science.
Some are working with partner organizations who can provide these insights as a service. But no matter how they go about it, it’s vital to have people who can discern the signal from the noise and derive actionable insights from the data.
3. Think about the platform
The third priority is to consider the digital platform the business is using to bring all this operational intelligence together.
Rationalizing the ERP system may be part of that story, but there’s a great opportunity for the industry to go broader. Companies today should now be looking to leverage the power, speed, scalability, and innovation of the cloud.
Flexible cloud platforms can coexist with legacy ERP environments, while providing fast and cost-effective access to cutting-edge data analytics and other innovative services. These cloud solutions are now arguably essential for running a modern industrial business.
Focus on the future
The last 12 months have illustrated just how important it is for industrial companies to be able to respond quickly to new circumstances on the ground.
Shifting to intelligent operations is the way to create that agility—with a new data-driven culture that thinks big, leverages insight at scale, invests proactively in technology, and meets rapidly escalating customer expectations.