A recent study from Accenture of executives from leading global industrial companies highlighted the struggle they are facing in deriving value from digital technologies, despite their acknowledgement of its importance to their business. In fact only 13 per cent of companies have been able to achieve both operational efficiency and new business growth on the back of their digital investments.
The barriers to achieving real business impact from digital technology include limited availability of digital talent (or only in isolated parts of the business), working on assumptions not tests and lack of access to data. Despite this, we see companies plough ahead, often fruitlessly, with small pilots, that realise little value leading to ‘proof of concept fatigue’. Industrial companies can be especially prone to this because some remain focused on whether or not a technology works rather than proving out the value in pursuing it. So how can they break through these barriers?
'We see companies plough ahead, often fruitlessly, with small pilots, that realise little value leading to ‘proof of concept fatigue’
Working with multiple clients, we developed an approach to building sustainable value from digital investments. We’re supporting our clients in creating the right environment, with the right governance processes and framework, so they can identify the concepts they should be looking at and take those to a point of proving out the value, test them with users, and validate the hypotheses associated with them at the outset. The end-state? Getting to a point where they can actually start to industrialise these innovations.
Our approach uses experimentation methods, along with agile software development, so that whatever the concept, a company can consistently iterate and prove value, while continuously testing the solution with small groups of users to ensure they’re getting what they need from it.
Through an integrated framework of technologies, assets, methodologies and ecosystem partnerships, we provide digital capabilities – supported by access to talented digital teams, our network of industry and technology experts, and the right mix of skills – from service designers and UI/UX specialists to product and software engineers. This enables clients to move rapidly between the new concept stages of Ideation, through Incubation and to Industrialisation.
This is how we work with clients to change how they develop individual concepts, but there is a broader perspective as well. It is a proven approach that accelerates development of new digital products and services while creating the digital culture, capabilities and ways of working that are essential to increase a company’s digital self-sufficiency and drive future business performance. Often building this capability is the catalyst for wider Digital Transformation of the business – providing an opportunity to identify the sources of value throughout the business, define an end state vision and start building the capability to get there.
Crucially too, this is where we help companies assess the potential from new partnerships. This is a huge issue in the industrial space right now. Feeling increasingly threatened by disruptive competition from startups and larger competitors, companies are looking to open opportunities within their broader ecosystem and bring their existing partners/suppliers on the transformation journey with them.
So what does this look like in practice?
Accenture and Vodafone have been working in partnership to find a solution to predict and prevent excursions in the cold chain (when a temperature sensitive drug goes out of its allowable threshold during transportation) for Pharmaceutical companies. This is a significant challenge in the Industry with a reported $24bn lost owing to excursions each year and with this figure set to grow in coming years. The key differentiator to the normal new product introduction process is the customer involvement, speed and utilising our innovation approach.
During this process of identifying new products and services that we could jointly take to our customers we started by down-selecting to a couple of key client challenges. Then we focussed on the significant differentiators of our partnership by conducting market research, interviewing a wide spectrum of companies, industry experts, third party logistics providers and more to understand their perspectives. Ultimately we developed a prototype to prove out the value and test it with users and are now in the process of identifying customers that we will pilot the solution with. All outside of the standard new product introduction process, meaning it can take weeks not months, to put something meaningful in front of the customer.
Right now, we know industrial companies are struggling to scale innovations and derive real business value from them. Our approach tackles that challenge head on; saving money and realising value from your Digital investments, fast! For more information get in touch with jonathan.parr@accenture.com
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I'd like to know where these are operating in the UK. The report is notably light on this. I wonder why?