By 2020, as many as 50 billion devices could be connected to the Internet of Things (IoT), including numerous industrial machines and manufacturing devices.1 This presents an exciting opportunity for high tech companies that can combine the IoT with other emerging technologies like edge analytics, wearables, and blockchain to reinvent their industry. This reinvention of Industry, or Industry X.0, will enable businesses to transform their core operations, worker and customer experiences, and business models. But, as evidenced by our technology adoption timeline, executives must act now. If high tech companies don't pivot soon, they may lose the opportunity to more nimble and innovative competitors.
Accelerated by digital: A timeline of technology adoption curves
SHIFT IN INDUSTRY IS EXPONENTIAL
In a recent Accenture survey, almost a third (29 percent) of high tech C-suite executives believe their organization will cease to exist in 3 years if it fails to transform and become adept at innovating with intelligent technologies,2 indicating that Industry X.0 is critical to success. At Accenture Strategy, we see three particularly promising new technologies unlocking the potential of Industry X.0-enabled business models.
Edge analytics, pushing computation closer to edge devices, could advance the realization of true enterprise-wide value. In fact, 90 percent of semiconductor executives believe edge analytics will pay for itself in 2 years.3 When fully integrated into automated processes, edge analytics can improve equipment up time and efficiency, reduce maintenance costs, and lower spare parts inventory. Accenture has developed edge analytical models for clients that monitor and analyze data real time from aircraft parts that commonly fail during flight. These models help identify existing failures, predict future failures, and trigger notifications to ground maintenance crews. In response, crews can expedite maintenance and minimize delays by scheduling a technician, and sending the required part, to meet the plane upon landing.
To fully realize the modeled efficiency and cost reduction in practice; however, high tech companies must transform their processes, operating model, business model and partner relationships to allow for seamless coordination across multiple parties and technologies. In this imminent future, the just-in-time concept will have to evolve.
Likewise, combining IoT with wearables can leverage the power of Industry X.0. Take the airline industry, where companies are constantly oscillating between customer comfort and optimizing space. Accenture and Airbus collaborated to develop a state of the art application for wearables in aerospace and defense – digitally enabled, industrial grade smart glasses to improve the accuracy and reduce the complexity of cabin furnishing.
So what was the impact of these smart glasses? The overall productivity for the cabin seat marking process per aircraft was improved 500%, error rate reduced to zero, and marking operations have been significantly accelerated. In addition, training requirements are reduced as operators receive data from the smart glasses in real time without needing to rely on a manual.4 The early adoption and effective integration of smart wearables demonstrates leadership in the digital era, as well as providing cost-efficient services for airlines and superior comfort for passengers.
Blockchain is a prime example of how Industry X.0 is reshaping businesses. By 2030, blockchain is expected to generate $3.1 trillion in business value.5 Take high tech manufacturers: many of the devices they produce can run endless self-diagnostics to pinpoint a technical issue. However, answering the seemingly simple question of whether a device is covered by a warranty is a lengthy, complicated process. This juxtaposition is driven by the complex ecosystem of suppliers, retailers, and service providers supporting these warranties. Blockchain helps solve transactional complexity, coordinate across the supply chain, and address an inherent distrust in the process.
However, actual implementation of these new technology-powered business models has proven challenging. Accenture research finds that only 13 percent of companies successfully lead in the new by simultaneously driving both operational efficiency and new business growth.6 To accelerate the transformation while maximizing the benefits, companies must break silos, reinvent traditional processes, and properly align incentives. It is no longer enough to take incremental steps. Companies must be swift and well equipped for the full digital transformation.
Leading organizations will recognize that technologies are an opportunity not only for incremental improvement but for true business transformation. Finding synergies in combinatorial technologies, such as blockchain or IoT, can unlock more value than their individual parts. It is no longer enough to rely on a first mover’s advantage. Organizations must take first mover insights and apply them across the ecosystem, beyond niche applications within functions or business units.
The industry is at an exciting crossroad of innovation and opportunity. Don’t idle too long.
1 “The Internet of Things: Are you ready for what’s coming?”, Science Digest, Sept-Oct, 2017.
2 Accenture, Hyper-digital Business Readiness Survey, 2017.
3 Accenture 2018 Tech Vision research.
4 Accenture, “Airbus soars with wearables”
5 Gartner, “Forecast: Blockchain Business Value, Worldwide, 2017-2030”, March 2017.
6 Accenture – “Industry X.0 digital reinvention of industry” 2018.