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While many industrial equipment firms have made moves in the right direction by partially digitizing their existing value chain, this alone will not bring long-term success. Serious competitors are moving to implement new, fully digitized business models, preparing themselves for a future in which customers buy outcomes and services, rather than strictly products.

From agriculture to fleet management, companies are rapidly integrating platform-based subscription services in conjunction with their industrial equipment. The firms sell access to their software platform and applications built within it to help companies save money and become more productive, a key selling point for companies foregoing big capital investments.

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KEY FINDINGS

Accenture Strategy research shows digitization is a key driver of revenue growth and profitability, contributing approximately 40 percent EBITDA growth in 2020.

We see three value areas of digital opportunity—customers, business operations and reorientation of the business with new models. Existing industry players and cross-industry innovators are already active in all three digital value areas, increasing the urgency for smart but rapid digitization.

Digitizing the customer experience in marketing and sales for example increases EBITDA, with predictive and personalized offers increasing sales.

Meanwhile, by investing in new digital business models, industrial companies can continue to boost profitability. New business models are a strategic differentiator to set the path for digital transformation.

Think holistically: Investment in both partial digitization + new business models yields EBITDA increases in 2020 of: VIEW THE INFOGRAPHIC [PDF]

RECOMMENDATIONS

The new business is digital and requires industrial companies to accelerate their journey to realize competitive advantage:

  • Assess your digital gap and bridge it, incorporating required performance measures.

  • Gain digital traction with rapid prototyping and design capabilities—whether you build, buy or hire them.

  • Operate in dualities. While creating new digital business models, it is essential you partially digitize your existing business to remain competitive.

  • Groom your team for a fast, agile environment, overcoming the industry stereotype of slow and unimaginative.

Take these first steps toward selling solutions rather than simply equipment, and you equip your teams for the competition yet to come.


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