Industry X.0 is how Accenture defines the digital reinvention of industry, when businesses use advanced digital technologies to transform their core operations. Industry X.0 companies integrate functions and customers around digital and build new connected processes, products and services to drive new levels of efficiencies and worker and customer experiences.
According to global strategy research, leading organizations are unearthing a treasure trove of value through the effective adoption and deployment of IX.0 strategies. Those hesitating are falling behind, and risk never catching up. We identified top 17 percent respondents that are leading in the "new"—we call this group “Value Makers.”
“Value Makers”—driving growth through digital
The Industry X.0 concept requires companies to fundamentally rethink their value propositions—and to reinvent their very business through digital technologies and new products and services. The Value Makers identified in our research are doing just that. In fact, this group is six times more likely to have increased their revenue by more than 30 percent in the last three years with IX.0 strategies. What’s more, they’re seven times more likely to have increased profitability by more than 30 percent when compared to "Traditionalists."
Value Makers pursue transformation strategies which follow Industry X.0 principles to drive growth and profitability—and they are very successful:
So, what has been on their strategic agendas?
A focus on experiences: Value Makers prioritize smart connected products to create new experiences for their customers. While many are still talking about “reinventing the product,” Value Makers are already walking the walk. They leverage innovative design techniques and digital to create mass customization with smart, connected products. Thirty-six percent of the Value Makers have shifted to selling connected products and services instead of just products, compared with just 7 percent of Traditionalists.
Continuous loop product life cycle. A continuous-loop product life cycle is about collecting and leveraging product, manufacturing, service and usage information throughout the full life cycle—from concept to disposal. Why? To gain faster times to market, to improve a product’s impact when it reaches the market, and to drive manufacturing and service efficiencies, and, in short, enhance businesses opportunities. Value Makers are already working on getting to these kinds of capabilities.
Reinvestment in operating models: Value Makers are strategically infusing digital with classical operations improvements to get more efficiency and effectiveness from their core Industry X.0 functions. Incorporating digital technologies and automation were identified as the top initiatives to improve IX.0 core functions across all segments, and Value Makers incorporate them at a higher rate (25 percent more) than Traditionalists.
Expanded revenue models: Thanks to smart connected products, Value Makers are expanding their traditional revenue streams through the creation of new experiences for their customers. They’re realizing they can convert more of their business to a Product-as-a-Service (PaaS) model. Our research indicates that Value Makers appreciate the benefits of the PaaS model more than Traditionalists and are more than three times as likely to be already using it.
Are you a Value Maker yet?
If your organization is striving to become more like the “Value Makers” we found in our research, then you might start by thinking about how to transform its operating models for higher agility. Digital transformation is about more than technology. It’s about business strategy, innovation and new ways of thinking to enable purpose-led change. Transforming for the digital age requires businesses to upgrade their strategic mindset to the degree they upgrade their technology infrastructure and organizational capability.
To become a Value Maker, try:
- Leading with a comprehensive business strategy that informs its digital strategy.
- Moving toward integrating the core functions of Industry X.0 into a continuous loop product life cycle.
- Optimizing core Industry X.0 functions through targeted digital investments in coordination with classical operational improvement efforts.
- Create new experiences for their customers and employees with smart, connected products and services.
- Take advantage of new revenue models afforded from smart and connected products and operating in a digital enterprise.