Unlocking the power of digital
Find the perfect combination of tech tools, and you won’t need to ask for a better digital transformation strategy—as investing in the right combo could help your company up both your savings and market cap.
Such is the recommendation of Accenture in its latest report “Combine and Conquer: Unlocking the Power of Digital,” which is based on the global professional services company’s 2017 survey of 931 senior executives from large companies across 12 industries and 21 leading industrial countries.
Accenture identified 10 “critical technologies” and, using both survey data and company financial data, performed an Economic Value Modeling (EVM) exercise, which is designed to “identify the technology combinations with the biggest impact on top-line and bottom-line value release, as measured by market capitalization and cost-per-employee.”
The EVM was carried out after Accenture’s initial research revealed that only 13 percent of the surveyed executives said their businesses were getting both greater efficiency and business growth through new revenue streams from their investments in digital technologies. Accenture believes this is due largely to piecemeal deployment and implementation of investments in digital technologies.
What the report recommends companies do to maximize their digital tech investments is to combine five particular digital technologies, should their goal be to increase company savings by around $85,000 per employee: autonomous vehicles, augmented and virtual reality, big data, machine learning, and mobile computing.
On the other hand, if companies go for this combo, it could increase a business’ average market capitalization by a little over $6 billion, states the report: autonomous robots, mobile computing, autonomous vehicles, 3D printing, and machine learning.
The optimum mix of digital tech tools was identified by combining results from machine learning and principal component analysis.
The report, however, states that going digital doesn’t just mean mixing and matching these technologies. “To create value with digital, companies must completely reinvent their operating models, production and value chains,” it reads. [They] embrace constant technological change, and profit from it.”
Accenture has a name for companies which can achieve this: Industry X.O businesses. Such businesses will be able to reach new levels of efficiency in the core of research and development, engineering, production, manufacturing, and business support through integrated systems, processes, sensors and new intelligence.
Industry X.O businesses will also reimagine and redesign worker and customer experiences through personalization, and advances such as immersive, augmented and virtual reality. New business models and revenue streams are unlocked by smart, connected products, services and plants that are enabled by new ecosystems.
JP Palpallatoc, Accenture digital lead in the Philippines, cites Meralco as a local Industry X.0 example, thanks to its smart grid initiative. “You can see your consumption using an application. Meralco can understand whether there is a problem in a particular segment of their grid so that they can anticipate and send services as quickly as possible,” says Palpallatoc.
The level of demand for Industry X.0 is revealed in Accenture’s survey. Eighty percent of respondents said they want new efficiencies, new growth, and new experiences to be delivered all at the same time. Sixty-four percent agreed that failure to leverage the components of digital value will cause them to struggle for survival in the future.
The executive research also revealed a key challenge that would hinder the ability of businesses to innovate with connected and intelligent products: a shortage of digital skills, which is preventing them from innovating with connected and intelligent products (29 percent).
“Most of the business leaders we work with understand the power of digital. They see the potential for digital technologies to bring about transformation and growth and are making big investments in a variety of leading technologies,” says Dave Abood, Accenture senior managing director for resources, growth and strategy. “Unfortunately, many aren’t getting the most out of their digital investments. The challenge is that to do so requires a careful balance of transforming core businesses while scaling new ones, which demands new talent, new skills, and new competencies in managing the pivot.”
There is, however, good news for the current workforce, as it is expected that key digital technologies will create new jobs as companies reinvent themselves to reflect Industry X.0. Accenture’s research indicates that deployment of connected and intelligent products, systems and plants will lead not only to the addition of new responsibilities to existing roles, but also to the creation of entirely new roles. More than half (55 percent) of executives surveyed said they believe that more new roles (in terms of responsibility) will be created than might be eliminated, and approximately the same number of executives (56 percent) said they believe that existing roles will be expanded or evolve. —ANNELLE TAYAO-JUEGO
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