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How smart services are disrupting the manufacturing industry

By using data from smart products, savvy companies can offer innovative, value-added services.

Overview

On the heels of new, smart, sensor-enabled products connected to the Internet come “smart services.” These business models are a threat to incumbent manufacturers. Why? Because, by using data generated by smart products, nimble new entrants can offer innovative, value-added services. Manufacturers need to understand these new business models and respond—quickly.

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Key Findings

Incumbent manufacturers need to innovate and strategize in light of the disruptive business models of smart services:

  • According to an Accenture survey, 88 percent of manufacturing executives say that they do not yet fully understand the underlying business models of the Internet of Things and its long-term implications for their industries. 

  • Only 40 percent of companies indicated that they have developed a digital strategy for the Internet of Things.

  • Just 29 percent believe that services will grow faster than products for their company.

  • One key is controlling the data entry points to the platforms at the heart of smart services. Such companies will also seek to grow and increase scalability further by creating digital ecosystems.

  • Any intermediary that is able to supply the customer and data interfaces of smart, networked products and services can occupy a key service control point. 

Recommendations

A company wanting to become a player in the smart services arena should make a strategic decision about the role or combination of roles it wants to play in the overall ecosystem:

  1. Owning the service platform itself.

  2. Providing the enabling technologies such as connected devices, open application programming interfaces (APIs), analytics and software as a service.

  3. Providing platform operations such as payments, logistics or smart data management.

  4. Offering specific products or services on the platform such as financing, insurance or types of relevant and timely information.

Learn more about Accenture Strategy


Author

Clemens Oertel

Clemens Oertel

Managing Director, Accenture Strategy

Clemens is a managing director with Accenture Strategy, leading the Digital Strategy practice in Austria, Switzerland and Germany. He focuses on digital value creation and helps companies enable and drive digital transformation through strategic use of digital technology and operations services.

Previously Clemens led the Sales & Customer Service Practice for Austria, Switzerland and Germany.

Before joining Accenture in 1991, Clemens worked with several German strategy consulting boutiques.

Clemens is based in Heidelberg and holds a degree in law from Heidelberg University (Germany) and a PhD from Muenster University (Germany).

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