The digital transformation imperative

With more industrial companies in Japan recognizing the importance of digital transformation, a clear shift is underway towards more service-oriented solutions that exploit the pervasive connectivity enabled by the Industrial Internet of Things (IIoT). With $14 trillion of global IIoT-fueled growth to play for in the years through 2030, companies are quickly waking up to the value-creating potential on offer.

Japanese industry and the IIoT outlook

Today, many companies still have not been successful in maximizing the opportunities for IIoT. Accenture’s analysis shows over 70 percent of C-level executives in global companies think they have not yet realized profitable growth through service innovation and the IIoT.

Here are the three principal factors hindering Japanese industrial companies right now:

  1. Siloed organization
  2. Product-oriented approach
  3. Talent gap
After almost two years of working on our Digital Strategy, I now realize we don't have a "lack of ideas" problem, we have a "can’t prioritize and execute quickly" problem.

The solution: Digital Service Factory

Japanese industrial companies need to make a careful and considered pivot to the new business and operating models that will deliver the service-oriented, customer-centric, IIoT-based products of the future. But they must do so while simultaneously ensuring their traditional core businesses thrive. This is what we call the "wise pivot."

For industrial companies in APAC, a critical component of the wise pivot is the Digital Service Factory. This operating model helps businesses accelerate digital transformation and take digital services to market faster by breaking down internal barriers and leveraging a diverse network of partners.

Digital Service Factory defined
The flexibility and agility of the Digital Service Factory make it invaluable for Japanese industrial companies’ digital transformations.

Kick-starting the IIoT era

So what’s the key to getting started with a Digital Service Factory? There are three important steps:

Think big

Acquire a holistic picture of what your business needs to transform, and services needed to truly reimagine what you can be as a business.

Start small

Pilot and test services at speed, using analytics and feedback loops to get new insights quickly and start proving the value of new concepts.

Scale fast

Accelerate viable services, going from pilot to production in months rather than years, then scaling up by leveraging existing resources.

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Kyoko Tamura


Raghu Gullapalli

Managing Director, Industrial Lead – AAPAC


Scale digital innovation like a Champion
Wise Pivot: How companies drive innovation in APAC
Breaking through disruption: Embrace the power of the wise pivot

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