Industry X.O: how to achieve results with digital transformation
The digital transformation of the industry is “threatening” the certainties of companies, which must necessarily relate with totally new skills, technologies and roles. The changes are known to be often a source of crisis and uncertainty, but if analysed and exploited to the best they can represent an enormous push towards a winning turnaround.
➡️ Accenture carried out a research on some medium and large Italian companies, leaders in the manufacturing and production sectors. A great awareness has emerged on the importance of the digital transformation taking place, but at the same time a sense of mistrust and disappointment regarding results.
Let’s see why in detail.
The Italian case
The research of Accenture, relating to 2018, involved 90 executives of Italian companies (50 SMEs and 40 large companies) operating in 22 manufacturing and productive sectors. Three topics were essentially discussed:
⭕️ the digital technologies most implemented by companies;
⭕️ the challenges to be faced during their implementation;
⭕️ the investments related to digital technology and skills.
A general difficulty in adapting to change has emerged. Specifically, while considering digital technologies as tools capable of improving efficiency and increasing revenues, Italian companies declare themselves not satisfied with the results produced by their digital investments.
➡️ One figure above all can picture this general uncertainty: less than 30% of Italian companies have used the “European Investment Fund for Innovative Enterprises” or the National Industry 4.0 Plan.
⬆️ In any case, about 60% of the companies that participated in the survey said they wanted to make revenues from connected, smart and digital products and at the same time reduce company costs. Concerning the expenditures for IoT technologies, Italy is the second country in Europe.
⬇️ However, if we look at the level of business confidence regarding the return on investments (cost reduction and improvement of the level of customer engagement through digital technologies), the percentages drop to 28% and 29%, respectively.
✔️ Summing up: Italian companies think it is right to make investments in digital, they wait impatiently for the results, but they do not believe much in them. The research shows that one of the main obstacles is the high cost of technological obsolescence, the rapid evolution of digital technologies.
An explanation for this behaviour could lie in the historical trend of the manufacturing companies of our country: the “high quality-high premium” model has allowed, thanks to the attention to the quality of the products, to apply higher prices for export, gaining a prominent position in the world market and benefiting from high profit margins.
✔️ To change and achieve concrete outcomes Accenture suggests a change of approach by adopting the one of the Industry X.O: reinventing the business by combining different digital technologies.
A new approach
➡️ Industry X.O is an approach that proposes to apply new digital technologies to all phases of product realization and not just to the production phase as in previous industrial revolutions.
➡️ This new vision would make operations more efficient by saving, at the same time, useful resources to reinvest, regardless of the company size.
To minimize the effects of technological obsolescence, which we have seen to be one of the biggest obstacles to investment, it is necessary to use a combination of digital technologies, to multiply profits instead of using a single one.
⭕️ According to Accenture, to implement an Industry X.O approach, companies must adopt six “strategic imperatives”.
Strategies for Industry X.O
An Industry X.O company, that decides to change its approach, should follow six strategies or “imperatives”.
① To transform the core business
The company must embrace a digital strategy that involves all its components with the aim to increase efficiency and free up resources to be reinvested.
② To focus on experience and results
It is necessary to create multiple digital points of contact between company and customer, to improve the customer experience throughout the product life cycle.
③ To innovate business models
Through digital, it is possible to develop new business models to create targeted values for each individual customer. The use of IoT and IIoT allows to improve the effectiveness of the strategy.
④ To focus on a digital workforce
An Industry X.O company invests in people with digital skills who can apply them to solve real problems through human-machine collaboration, which often requires a redefinition of company roles.
⑤ To create new ecosystems
Innovations and new skills allow to develop new ideas for the creation of a solid digital ecosystem.
⑥ To reorient the business model
To achieve the maximum synchronization between innovation and growth, it is necessary to balance investments between the core business and the new business.
The Italian production model that has allowed our country to flourish over the years needs to be reconfigured based on the digital transformations underway. To achieve this goal, companies must focus on the growth of the core business but at the same time adopt new business models, reinventing themselves and innovating.
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