Today, virtually all industrial equipment (IE) manufacturers around the world are exploring how they can benefit from digital transformation of their businesses. In scoping out and pursuing the potential of digital, they’re being spurred on by a rich blend of opportunities and risks.
On the opportunity side, IE companies are attracted and energized by the promise of being able to tap into new revenue streams and build closer and deeper customer engagement through the industrial internet of things (IoT) and other digital channels. And in terms of risks, they’re eager to avoid the threat of digital disruption from traditional and non-traditional competitors both within and beyond their industry.
There’s no doubt that the opportunities that digital technologies present to IE companies are substantial—and potentially transformational. IoT, for example, at root, offers them the game-changing ability to understand in real time how each of their individual products is being used by customers, together with insights into each product’s current and future status. This information opens the way to the creation of new customer services and revenues that were never previously possible.
But the journey to digital enablement for IE companies is neither well-signposted nor easy. Over many decades—even centuries in some cases—they’ve built robust businesses based on deep understanding of their products. And while they’re adept at exploiting product and service know-how to add value for their customers, they’ve historically done this using traditional product development processes and innovation cycles measured in years. With digital, these former assets can all too easily become liabilities.
By virtue of their background as engineering-based developers of complex equipment, it’s relatively easy for IE manufacturers to generate data from their products, run analytics on that data, and conduct pilots and proofs of concept. But the challenge then is scaling these up and monetizing them through new business models.
To position themselves to overcome these hurdles, our experience shows IE companies should focus on three priorities:
Digital strategy – both for the "customer" and for the "enterprise." IE manufacturers must ask questions like: how will we use digital to create value for our clients and ourselves? What should we prioritize? How will we monetize our data? And how can we use digital to improve our operations?
Capability – Most IE companies have not previously needed or invested in digital skills in areas like web design, online customer experience and mobile app development. So they need to ask: What skills do we not have today that we’ll need tomorrow? How can we identify the capability gaps that will be created? And how will we integrate software components from across our digital ecosystem, including start-ups?
Platforms and ecosystem – All IE companies need to navigate the complex world of IoT and digital channels, by putting in place the building-blocks they’ll need in order to develop, offer and monetize new offerings and business models. Moving from a product to service orientation demands a new way of working. Specifically, it involves creating an ecosystem by being open to partnering and co-opetition, and prioritizing speed and time-to-market.
Accenture Digital has the proven ability to help clients navigate their way through all aspects of their digital journey, including online presence, ecommerce, client portals, digital marketing, analytics, mobility, and IoT including connected field worker and connected asset management.
Accenture’s deep knowledge of digital in both B2B and B2C models means we can help our IE clients devise and accelerate their digital strategies in ways that maximize the opportunities and manage the related risks.