Accenture clients think at the Innovation Center in Garching near Munich, Germany out of the box: The center specifically offers the opportunity to jump-start their own digitalization.

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One of Accenture’s Industry X.0 Innovation Network centers, of which there are 23 around the world, is located in the town of Garching, near Munich in Germany. | Image: Accenture

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The small drinks machine on the conference room table hums, clatters—and then dispenses a can of Andreas Schuler’s favorite soda. He didn’t need to input any information to get his drink: The machine “recognized” him via a camera and downloaded his drink preference from an IIoT cloud. “That’s really good!” says Schuler, an Accenture consultant and the center’s managing director of the Accenture’s Industry X.0 Innovation Center in Garching. He then congratulates the todays workshop participants gathered around the table, who have developed the device over the past two days.

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The small prototype is located in Accenture’s Industry X.0 Innovation Networkcenter, of which there are 23 around the world, in Garching near Munich, Germany. It is the result of a workshop exercise, a test setup on which industry managers and developers can practice developing, testing, and then following up on new digital ideas for solutions and business ventures. They have left their own company behind for two days for this precise purpose and exchanged their own offices for rooms in Accenture’s IIoT Innovation Center in Garching.

The center is located in the middle of an industrial park, inside a real factory building, and extends across two floors: Offices and meeting rooms are upstairs, while the ground floor is like a real shop floor with IIoT test setups that, as Schuler explains, are intended to be touched. The whole thing is quite impressive—but why would a consulting firm like Accenture build an “industrial facility” like this?

New directions in industrial innovation

“Digitalization is increasingly forcing many of our customers to change their way of thinking: Data and services are becoming more important than industrial machinery, and software expertise is gaining significance. Entire branches of industry are changing and moving away from an engineer-driven, product-centered approach toward an increased focus on services and the customer,” Schuler explains. He notes that this transformation is “also and above all” changing areas such as innovation, research, and development—and presenting a challenge for many companies.

“Companies increasingly need to be capable of handling approaches of a type we would typically associate with the world of software startups,” says Matthias Wahrendorff, Managing Director at Accenture Research and Deputy Manager of the center. “Rapid, step-by-step experiments, processes such as rapid prototyping and minimum viable products—which is to say, solutions that are just ‘good enough’—these aspects often represent a real cultural change for industry suppliers.”

Wahrendorff knows what he is talking about. Accenture Research has studied 350 companies around the world to determine how the best of them manage research and development. The results: Especially successful inventors actually link the proven working methods used by experienced industrial companies with new approaches from software startups and open up their own research and development work to third parties, achieving significant cost advantages in the process. And it’s important to note that the vast majority of operations don’t use these best practices yet (see box).

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New business, new rules

Accenture’s market survey, titled “Beyond the Product: Rewriting the Innovation Playbook”, highlights just how much the digitalization of industry is also changing its research and development. According to this study, industrial companies can be divided into four groups according to the approach they take to innovation and innovation management:

Market-share protectors: The largest category; around 43 percent of all companies analyzed are in this group. Market-share protectors focus on constantly developing existing products, mainly by using traditional methods.

Efficient executors: Like market-share protectors, this group also primarily continues to develop products—but they use processes that are significantly more structured. The companies in this category—37 percent of the sample group—are therefore comparatively efficient.

Value makers: The first “winner group” in the study; 13 percent of the companies analyzed fall into this category. Value makers develop not only product innovations, but also new services and customer experiences. To this end, the representatives of this group start with the customer (and not with the product) and also rely on cooperation with ecosystem partners.

Early innovators: The second group of winners and the clear winner in the comparison. Early innovators specifically look for gaps in the market and customer needs that are not catered for, and they use a targeted approach and rigorously standardized processes to develop appropriate solutions. Research and development are conducted strategically and are closely linked to the development of the business; structured experiments and step-by-step procedures following the “fail fast” approach are the rules.

Of all the groups mentioned above, only the value makers and the early innovators achieve significant competitive advantages: The companies in this group recognize customer needs earlier, introduce new solutions to the market more quickly, and score more successful market launches than their competitors.

For more details on the various groups, approaches, and results, see the free study report at the Accenture webpage.

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