Industry X.0 - Realizing Digital Value in Industrial Sectors

INDUSTRY X.0
REALIZING DIGITAL
VALUE IN INDUSTRIAL
SECTORS

ERIC SCHAEFFER
SENIOR MANAGING DIRECTOR
ACCENTURE
“The ship has clearly sailed for
digital sceptics. The industrial
sectors, comprising two thirds of
the world’s gross domestic
product, will be changed beyond
recognition by digital technology,
disrupting decades-old business
habits, conventions and operating
models.”

Copyright © 2017 Accenture. All rights reserved. 3
TECHNOLOGY WILL TRANSFORM
THE INDUSTRIAL LANDSCAPE BEYOND
RECOGNITION
Its drivers are many, among
them the pervasiveness of
connected technology, platforms
and data optimization, hyper-
personalization, and as-a-
service business models.
The Industrial Internet of Things
(IIoT), will digitally orchestrate
factory floors, physical products,
workers and more, unleashing
enormous value.
Critical to success in this new
digital industrial world will be the
deployment of the right
technology, preparation of the
digital workforce, intelligent
orchestration of both, and
embedding of enterprises in the
right ecosystems of business
partners.

A combination of product features,
services and (new) experiences
Core of the change – Connected and Smart
Business models – Combination, Disrupted, AaS
Re-invention of the product:
• Hardware – Container
• Software – Continuous reconfiguration, value
• UI – Hyper-personalized, context based
Ecosystems – Drive competition vs. features
LIVING PRODUCTS ARE AT THE CORE OF
THE TRANSFORMATION
INDUSTRIAL CLOUD
PLATFORM & ANALYTICS
Ecosystem & Smart Services
Hyper-Personalization &
New Experiences
Human InteractionContainer for Software
SMART PRODUCTS

IIOT WILL LEAD TO THE END OF THE
PRODUCT & THE RISE OF THE OUTCOME
ECONOMY
IIoT will drastically change the
way companies work
internally, work with each other
and sell to customers.
This will lead to “the end of the
product” and the rise of a new
kind of economy, the Outcome
Economy. It is the combination
of living products and as-a-
service business models that
make the outcome economy.
This will be the era in which
industrial companies move
away from rigid business silos to
more agile ecosystems and
alliances with surprising
partners.

THE SHIFT FROM PRODUCTS TO SERVICES TO
OUTCOMES WILL FOLLOW FOUR DISTINCT
PHASES
2020 2030
• Continuous Demand Sensing
• End-to-End Automation
• Resource Optimization & Waste
Reduction
• Pay-per-Outcome
• New Connected Ecosystems
• Platform-Enabled Marketplace
• New Business Models
• Pay-per-Use
• Software-Based Services
• Product/Service Hybrids
• Data Monetization
• Asset Utilization
• Operational Cost Reduction
• Improvement of Worker
Productivity, Safety, and
Working Conditions
Operational
Efficiency
New Product
& Services
Outcome-
based Economy
Autonomous
Pull Economy
1
2
3
4
IMMEDIATE TO
NEAR TERM INCREMENTAL
LONGER TERM –
3 YEARS AFTER MAINLINE ADOPTION/
TRANSFORMATIVE

A GUIDING LIGHT
FOR DIGITAL STRATEGY
Don’t do business as usual
Manufacturing companies can
reap huge immediate and future
financial rewards from digitizing
their whole
value chain.
Partial digitization and new
digital business models –
do both
Unlock digitization
opportunities with a custom-
made digital strategy

MANAGING
THE
PIVOTS
TO TRANSITION TO
DIGITAL, A BUSINESS
SHOULD GROW ITS
CORE AND INVEST
MORE AND MORE
IN THE NEW.

WHAT WILL THE NEW LOOK LIKE?
Hyper-Personalization &
New Experiences
INDUSTRY X.0 FRAMEWORK
Ecosystems &
Smart Services
Platforms &
Analytics
Smart
Products
Engineering &
Manufacturing
GROW THE NEW
ABOVE THE LINE
New hyper-personalized and context specific user
experiences are created through the connection of smart
products with platform-based services utilizing the power of
broad ecosystems.
Change will be fast, disruptive and redefine the rules of
competitiveness.
TRANSFORM THE CORE
BELOW THE LINE
Unlock new levels of efficiencies in the operations. Cost
take out to fund investments to further grow the core
business.
Smartening existing products represents the first pivot of
the industrial rotation.

THE “HOW TO”
FOUR STEPS TO FINDING THE RIGHT PIVOTS
• Exploit installed base data for upsell / cross sell
opportunities
• Focused efficiency initiatives leveraging new technology
Unlock the value trapped in the enterprise
to fund the transformation
1
2020 2030
BusinessOutcomes
Transform
the core
Digitalize Engineering,
Manufacturing & Service
Create New Business Models &
Revenue Streams
Transform
Products
Legacy Products
... Installed base
Hardware container
Services,
Experience –
Pivot 2
Smart connected
Products –
Pivot 1
Retrofit
Legacy?
Time
Digital unlocking of
trapped value in the
enterprise
New flexibility in
Engineering &
Manufacturing
Innovation driven
growth
• Smarten and connect legacy high potential products
• Bring the customer into your product development
process
• Start envisioning your Next Gen products
Shape the
product agenda
2
• IPO – set up
• New digital services on top of legacy products – Digital
Service Factory
Pivot your innovation
and growth agenda
3
• Rapid experimentation of six no regret capabilities
• Analytics Center of Excellence
Experiment, build the right business
capabilities
4
Ecosystem,
platforms,
Experience.
Outcome based
economy –
Wise pivot

SIX “NO-REGRET” CAPABILITIES
FOR YOUR JOURNEY TOWARDS DIGITAL
ONE
Synchronize your
lifecycle clocks
Integrating the way you manage your
hardware and software application
lifecycles is key to this and is one of the
most important.
TWO
Embed software intelligence
and connectivity within the traditional
“dumb metal sheet product” in order to
enable interaction with its environment such
as people or machines, including other
connected products.
THREE
Use analytics to get insight and
decision support from data gathered by
connected products and other
data sources.
FOUR
Render your manufacturing
facilities agile
Use industrial automation wherever
possible to increase your shop floor’s
speed and flexibility.
FIVE
Push for transition to as-a-service
business models
“Everything as a service” is becoming the
paradigm of the future Outcome Economy
whereby combinations of products and
services will no longer need to be
acquired as property.
SIX
Create ecosystems
and run them
No single company will be in a
position to own the whole digital value
chain in an advanced stage of the
Outcome Economy.

INDUSTRY X.0
IS HERE,
ARE YOU
READY?
MORE INFO BUY NOW

TABLE OF CONTENTS
Preface 11
Acknowledgments 15
Introduction 17
PART I
The Industrial Internet of Things – Transforming
Manufacturing Beyond Recognition 29
Chapter 1
Industry’s Ongoing and Accelerating
Digital Transformation 31
Chapter 2
How the IIoT Leads to the Outcome Economy 53
Chapter 3
Digital Super Value –
A Guiding Light for Digital Strategy 77
PART II
How to Make the Most of the
Digital Industrial Transformation 101
Chapter 4
Six “No-Regret” Capabilities – the Journey
Towards Digital, Mapped out Simply 103
Chapter 5
Zoom in: How to Make Data Analytics
Work Your Way 127
Chapter 6
Zoom in: How to Handle
Digital Product Development 157
Chapter 7
Zoom in: How to Create
a Connected Industrial Workforce 189
Chapter 8
Zoom in: How to Master Innovation
in the New 215
Chapter 9
Zoom in: How to Make the Most of
Platforms and Ecosystems 241
PART III
The Future is Now and Tomorrow 269
Chapter 10
A Visionary Outlook –
The Digital Industrial Enterprise 271
Chapter Takeaways at a Glance 285
Glossary of Terms 293
Endnotes 295
Index 309
About the Author 313

14
ABOUT
THE AUTHOR
Eric Schaeffer is a senior managing director at
Accenture. He is leading Accenture’s Digital Industry X.0
program with the objective of supporting industrial
companies in harnessing digital opportunities. Eric also
leads one of Accenture’s global business services—
Accenture Product Lifecycle Services—which provides
end-to-end services to unlock value and efficiencies
from product data across the entire value chain. His
primary industry background is automotive and industrial
equipment manufacturers, his secondary industry focus
is freight and logistics and transportation and travel. His
project track record covers business transformation
programs encompassing complex business and
technology changes and he has led such programs for
large and multinational companies.
Copyright © 2017 Accenture. All rights reserved.

EXPERT REVIEWS
With this inspiring book,
Eric Schaeffer demonstrates the
monumental impact that the Industrial
Internet of Things has on the industrial
sectors, and clearly shows how this
can be harnessed for major
competitive advantage, profit and
growth.
This groundbreaking book helps
leaders and managers to thrive in the
face of endless digital transformation.
INDUSTRY X.0 is an inspirational call-
to-action for everyone associated with
the industrial sphere.
The steady drumbeat of digital
disruption has come to manufacturing
in a way unequalled for decades. But
where do you start? It’s one thing to
know you will be disrupted, and
another to join the disruption and
outpace your attempted replacement.
That’s where INDUSTRY X.0:
REALIZING DIGITAL VALUE IN
INDUSTRIAL SECTORS comes in—
more than a warning shot, it’s a
prescription—and a medicine every
industrial leader should take. A
must-read.
INDUSTRY X.0 comes at an
opportune time, as science and
technology unleash disruptive change
across all fronts. It reveals how
seismic shifts in industrial sectors will
significantly improve customer
outcomes. It is a practical how-to
advice for companies to stay relevant
in the new age of the Industrial
Internet of Things. A thought-
provoking book—meticulously
researched and clearly explained.
Cyril Perducat
Executive Vice President
Digital Services Transformation,
Schneider Electric
Stefano Porcellini
Managing Director
Biesse Group
Richard Mark Soley, PhD.
Chairman and CEO,
Object Management Group
Executive Director,
Industrial Internet Consortium
Mehran Gul
Project Lead
Digital Transformation Initiative,
World Economic Forum
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Industry X.0 - Realizing Digital Value in Industrial Sectors