Shaping the digital future for Finnish industries
March 9, 2018
March 9, 2018
To succeed in global markets, Finnish industries need to execute and deliver new forms of digital services and experiences to their customers. It’s a concept that’s perhaps more familiar in the B2C space, where consumer expectations have been shaped by major digital players. But even industries that are mostly B2B are not exempt from digitalisation.
This digital reinvention of industry is what Accenture calls Industry X.0. The transformation starts when businesses employ an optimized suite of advanced new technologies, from AI to IIOT. These digitally-enabled companies go beyond the fourth industrial revolution, by developing smart products, connected services and as-a-Service business models.
It’s a new mindset, that for many is yet to become established. For example, many Finnish businesses are using digital technologies like cloud, social and mobile to do what they’ve always done but more efficiently. But Industry X.0 is about much more: it’s the transformation of industry models. And achieving that goes to the core of strategy: R&D, the product journey, and how companies define and manage what they deliver to customers.
Four characteristics of Industry X.0 businesses :
Finnish businesses recognise that they cannot innovate and grow their R&D capabilities simply through internal growth. To date their emphasis has largely been on protecting IP and focusing R&D in one location. But to thrive in the new means partnering in ecosystems, working with unfamiliar companies and partners in new ways to acquire new kinds of skills. It requires a major shift in culture and mindset.
We’re seeing companies in Finland innovating the product – but having trouble in extending those into commercially attractive propositions to customers.
Finnish companies know the change is coming, but the journey is still taking time to get started. Accenture research shows that while one-third are using digital technologies to unlock new levels of efficiency, and half to drive new sources of growth, only 6 percent are doing both . We’re seeing companies in Finland innovating the product – but having trouble in extending those into commercially attractive propositions to customers. What’s more they need to make the transformation much faster.
For most industrial firms the process of ideation to launch takes not untypically between 3-6 years. In contrast, digital businesses think in terms of weeks or even days. The implications of delivering new services and experiences and the use cases companies need to develop for connectivity, data, analytics etc are far from trivial. It requires them to rethink product development, and how digitisation changes core processes. That in Finland, as elsewhere, is a challenge. And while it’s clearly understood at a senior executive level, getting that understanding to flow through the organisation is more difficult.
But we are seeing some clear examples of new approaches to innovation and participation in ecosystems evolving around a platform can achieve differentiation. Look at Scania One, for example. Scania One provides its connected vehicles with a range of data services. But it is also built as an open platform, encouraging developers to add their own services that could address the specific needs of what the truck is used for (ie outcomes) rather than the performance of the truck itself. It opens possibilities for an unlimited array of services and clearly acknowledges that Scania cannot create all those services itself.
For others to follow, we see three key areas that they’ll need to address: