Taking Industry 4.0 beyond proof of concept

Industry 4.0Industry 4.0

Accenture’s Mike Sutcliff and Raghav Narsalay map out how to scale digital manufacturing successfully 

It’s fair to say that for most businesses today, innovating with digital technologies is a priority. This isn’t discreet innovation at the ‘edge’ of the business, as was once the case. Businesses are looking for quantifiable value—and that means being able to innovate at scale.

The reality is that many organisations are struggling to achieve this. In fact, while we’re seeing lot of digital innovation across industry, we’re not yet seeing payback on these investments. The fact of the matter is that rather than delivering breakthrough innovation, many businesses are seeing their pilots fail when they try to bring them to scale.

Industry 4.0

One major sportswear brand spent significant time and money building a new facility based on robotics, machine learning and 3D printing. The aim was to deliver highly personalised products at scale. In the end, however, the manufacturer was forced to close down the facility at great cost. This is because the company failed to modernise its operations to take advantage of new automated processes, and as a result it struggled to accelerate production.

Innovation is primed to accelerate

In light of stories like this, it’s easy to see why some manufacturers may drag their feet investing further in digital innovation. However, to give up now would be to cede the field to competitors that have managed to get their digital transformations right and enable impactful innovation at scale. These are the ‘Champions’—businesses that are able to realise both innovation and growth.

According to the findings of a new Accenture C-level research study, industrial businesses worldwide are already scaling more than 50 per cent of their digital innovation proofs of concept (POCs). These figures suggest that innovation at scale is about to reach a tipping point and poised to become more fact than theory. Instead of pulling back, now is the time for businesses to invest ambitiously in digital.

Siemens digital factory
Siemens digital factory

That’s not to say businesses don’t need to change their approaches. Many do. And if they get it right, they stand to win big.

Getting a robust return on digital investments

Our research reveals a short list of Champions that have scaled digital innovation well, and as a result are realising up to four times the return on digital investment of their peers. They’re also able to scale more than 50 per cent of their innovation POCs.

These Champions are turning innovation into a reflexive, continual part of business operations and strategy. By studying what they’re doing differently, we can begin to outline a plan of action for other industrial corporations to follow in their footsteps.

There are four key steps:

  1. Define the value that will guide innovation efforts. Establish the value you want to capture before you set the wheels in motion. Work from the desired outcomes back to technology and processes.
  2. Drive internal organisational change and external digital value. When internal change and external ambition are misaligned, innovation doesn’t work. Blend your organisational change and digital transformation initiatives and ensure that what’s hoped for externally can be delivered by teams internally.
  3. Build in-house innovation factories with targeted influence. Overcome the challenge of scaling proofs of concepts within the wider business by seeding and growing digital innovations organically within organisational boundaries. Make all innovations accountable to the company’s profit and losses, so you can preview the effect of scaling a pilot on the larger organisation before the process begins.
  4. Find out what enables innovation in each business function. Most businesses use the same enablers to drive innovation, such as software applications to support operations, or analytics platforms to generate better insights. Beyond this, they must focus on matching the support to the function that needs it most and will use it best.
additive bridge
A ‘digital twin’ of a bridge constructed at Imperial College

The Champions identified in our report are doing all four of these things. As a result, they are able to broadly drive innovation at scale and ensure an optimum return on their digital assets. It’s beyond doubt that Champions are ahead in the race, but one can learn from their strategies and catch up steadily. Their early efforts have produced a game plan for industry on how to most effectively innovate at scale.

Mike Sutcliff is group chief executive of Accenture Digital and Raghav Narsalay is managing director of Accenture Research

MORE FROM THE ENGINEER