The digital transformation of industrial companies continues to gather pace. Whether it’s digital manufacturing and IoT connectivity on the factory floor, rapid prototyping and customer feedback loops in R&D, or streamlined automation in the back office, industry has woken up to the power of digital technology to transform the speed, performance, and profitability of manufacturing and operations.
One of the big challenges of digital innovation, however, is turning great ideas into viable solutions that can deliver value at scale. Across industry, we’ve seen a lot of interesting experimentation with digital technology in recent years. But, so far, many companies have struggled to realize a significant return on those investments.
Why is this? A common problem is the way innovation happens in pockets within organizations. That fragmentation means the company lacks a clear end-to-end proposition that everyone can get behind. It often means many different projects are competing with each other for funding and talent. And it can create unnecessary diversity and complexity in terms of both the technology and data being used.
The result is that exciting digital projects often run into dead ends or get developed into point solutions with limited extensibility.
How to get serious about scaling innovation
To get past this, companies need to develop the ability to both continuously innovate and continuously scale up that innovation. Ideation and experimentation are still essential for managing constant change. But the emphasis needs to widen to include creating the value case for each digital concept and then scaling it up and out.
Governance is also key to unlocking this scaling component. Companies need to be able to focus their digital capabilities better while industrializing their innovation processes. A powerful way to do so can be to create a new unit or organization to provide a centralized source of digital innovation, skills, focus, drive, and guidance for the rest of the business.
At Accenture, we often call this capability a “Digital Service Factory”, which industrial companies are beginning to use to develop and scale digital innovation in operational areas like digital manufacturing, design and engineering, and back-office functions like finance. That has included projects to enhance operations with artificial intelligence and create a control tower to monitor data from plants and machinery.
Steps to move from experimentation to value at scale
Of course, restructuring your digital innovation organization-wide is a significant commitment—as well as an investment—and not something to be undertaken lightly. You will potentially need to establish new structures from scratch with clearly defined roles that result in pull from the rest of the organization. You also need to make sure you can attract the right talent—this is a crucial aspect of making sure the new model delivers the expected value.
There are several things an organization can do to set itself up for success, including:
1. Clearly define the problems to be solved. In each digital project, it’s important to be precise about the business outcomes you’re targeting. Not only does this bring clarity to investment and scaling decisions, it’s also essential for measuring your eventual success.
2. Be lean, agile, and value-led. The organization should adopt a lean agile startup approach to digital innovation, with light but focused planning, rapid prototyping, early testing, and iterative execution. It’s also important to prioritize projects by the business value they’ll deliver.
3. Design-think everything. Given the emphasis on scaling up digital initiatives, human-centered experience design needs to be made a central theme. That should include the impact that digital solutions will have on both internal and external customers. This is crucial to ensuring solutions developed are actually used by the people they’re designed for.
4. Build momentum. Early on, consider prioritizing well-supported projects with strong sponsorship from the rest of the business. Taking on too much too early risks the organization getting bogged down in complex projects that could negatively impact enthusiasm.
5. Plan for scale. Proactively plan how a solution will be scaled to other parts of the organization. Answer key questions such as where similar problems are being experienced, how to scale vertically within a plant and horizontally across plants, and who the key stakeholders are that will need to be aligned.
6. Stay focused and measure success. Whatever structures you put in place to scale innovation, you need strong governance around them. Every potential project should be filtered through a clear and consistent set of criteria focused on business value. That means being prepared to say no to projects which do not fall within the company’s priorities and which risk side-tracking the team. You also need to be measuring the value each project is generating—remembering that this value can extend beyond the immediate users of a digital solution and can flow out more broadly across the business.
Getting more value with an innovate-experiment-scale model
Of course, every industrial company will have its own business priorities for digital technology. The key point is to think about the governance and organizational structures that can deliver those priorities, whatever they may be. It does need commitment from the senior business leaders. But when the whole organization is aligned behind the concept of innovate-experiment-scale, it can be a very powerful way of making sure you realize the full potential of digital innovation.