Are businesses ready for what Accenture has dubbed “Industry X.0” and are they in a position to rapidly absorb all future technological disruption?
By Ben Salama, UKI Industry X.0 Lead, Accenture managing director, and Yen-Sze Soon, UKI Industry X.0 Delivery Lead, Accenture managing director
Almost every day, it seems a new technology emerges with the potential to disrupt the way businesses design, manufacture, distribute and market their goods. From the Internet of Things to AI-enabled automation, 3D printing to augmented reality, the innovations keep coming thick and fast. And industrial businesses are trying to adapt to this changing landscape as best they can by investing in testing, assessing, and rolling out new technologies to ensure they remain competitive.
But how effective are these investments? Are companies getting everything they hoped for? Are they able to balance investments in growth with those in efficiency? It seems not. In a recent Accenture survey of business executives, only 13 per cent said their companies are getting both cost saving efficiencies and new growth from their investments in digital technologies.
Better coordinating investments
Why is this happening? We believe the answer lies in the way companies invest in technology. By and large, businesses have invested in a piecemeal way. As a result, the benefits of a given technology are only flowing to one part of the organisation. So, for example, a B2B manufacturer may well have invested in robotic applications to automate its production lines, but still be carrying out marketing and sales in a traditional “analogue” way. It’s like coming off a motorway: as soon as you hit that analogue slip road your supply chain inevitably slows.
If digital technologies are to live up to their promise of higher efficiency and new growth, what’s needed is coordination and combination: a wide variety of customer-oriented, seamlessly connected technologies that enable an end-to-end digital supply chain from design to post-market. This is something different to “Industry 4.0” or the “Fourth Industrial Revolution”: Accenture calls it “Industry X.0” and it’s a framework for ensuring a business can rapidly absorb all future technological disruption, and benefit from change as soon as possible.
Building a diverse future workforce
Industry X.0 goes deeper than just manufacturing; it spans all core business operations, from product and service design to engineering, and production. Advances in these operations through the application of intelligent technology are interfacing with human ingenuity and creating a new kind of industrial workforce altogether – one that promises previously unobtainable sources of growth, value and innovation. In fact, Accenture estimates that the new era of human-machine collaboration could boost business revenues by as much as 38 per cent over the next five years.
Up to now, machines and applications have often existed in parallel to the human workforce – present but isolated in their automated efficiency. AI changes all that. By enabling systems that can sense, communicate, interpret, and learn, AI shifts the question beyond “automation” to one of elevating the entire workforce – human and machine alike – to new heights of performance.
Traditional jobs will change. Machines remove people’s physical limitations, and heavy industrial work that has, until now, been more suited to strong, able-bodied individuals can now be carried out by robots managed by people of any physical ability.
Take one example: auto manufacturers using robots in their factories to do the most labour-intensive work, freeing up people on the production line to do tasks where human intelligence and creativity can make a big difference (vehicle inspections, for example).
This is the new reality. Almost three in four business leaders say they plan to use AI to automate tasks to a large extent over the next three years. More interestingly, virtually all (97 per cent) say they plan to use the technology to enhance their workforce capabilities. Just consider some of the ways this will reimagine our understanding of what “work” is and how we do it.
As with all previous industrial revolutions, new jobs will be created. And opportunities will arise for them to be done by anyone – before they’re claimed by any particular type of person (and stereotyped as such).
Oil companies will use AI to guide their technicians as they pinpoint new deposits. Pharmaceutical companies will be able to accelerate phenotypic screening in drug discovery. Aerospace engineers will use generative design to mimic nature’s evolutionary approach to find optimal design configurations. And logistics businesses will transform the role of their drivers, promoting them to “in-cab systems managers” who perform high-level analysis as the truck controls basic functions like braking and acceleration.
And that’s just a taste of what’s to come. It’s all part of pivoting a diverse workforce towards the activities that create new kinds of value for the business. This pivot needs to be considered and deliberate, emphasising mindset as much as operating model, and upskilling employees in the capabilities needed for long-term competitive advantage.
The intelligent Industry X.0 enterprise is already here
A perfect example of an Industry X.0 business is Schneider Electric, an energy multinational headquartered in France. Schneider Electric has combined digital and IoT technology with B2C thinking around the customer experience to create a ‘Digital Factory’ in which it can build, test and deploy new applications with ease. Through this innovation framework, Schneider has been able to rapidly develop and launch new customer service offerings and has created new value for its customers and itself by building new services around existing products. For example, a new risk management service for customer equipment providing predictive maintenance and personalised support services. Collecting and analysing huge volumes of data via an IoT platform the company can predict equipment failures and alert customers to take appropriate action well in advance. Based on this intelligence, Schneider’s equipment can adapt to its environment at speed, reducing overall downtime and improving asset utilisation for its customers.
Get ready for change
So how do you prepare yourself to become an Industry X.0 business? There are six imperatives for businesses to focus on as they adapt and thrive in the digital revolution:
1 Transform the core. Industry X.0 companies build core engineering and production systems around digital technology, synchronising infrastructure and applications to unlock previously unseen cost efficiencies.
2 Focus on experiences and outcomes. Industry X.0 companies use their newfound investment capacity to develop hyper-personalised experiences for customers.
3 Innovate new business models. Industry X.0 companies ideate and create new business models to drive new revenue streams offering differentiated value for their customers.
4 Build a digital-ready diverse workforce. Industry X.0 companies source, train and retain talent from all backgrounds with digital-ready skills and use intelligent technologies to elevate the performance of both people and machines.
5 Re-architect new ecosystems. Industry X.0 companies create a robust ecosystem of suppliers, distributors, start-ups, and customers that allows them to rapidly scale new business models across the digital value chain.
6 Pivot wisely. Industry X.0 companies continually balance investment and resources between the core business and the new business to synchronise innovation and growth.
The end goal? A business that is smarter and more connected. One that “learns” and adapts, almost like a living organism. One that finds new sources of growth and competitive advantage. And one that creates a workforce which does not discriminate against either machines, or the people working alongside them. That’s the promise of Industry X.0.
If you would like to learn more about how Industry X.0 can help a business thrive in the digital revolution, please read our report Combine and Conquer: Unlocking the Power of Digital accenture.com/combine.conquer