Integrating Digital Services with Products is Key to Future Revenue
Growth in Expanding Industries
NEW YORK -- (Business Wire)
The Industrial Internet of Things represents a tremendous opportunity
for innovative companies looking to unlock new revenue sources by
packaging their products with new digital services, says Accenture
(NYSE:ACN) in its new report, “Driving Unconventional Growth through the
Industrial Internet of Things.”
Combining sensor-driven computing, industrial analytics and intelligent
machine applications into a single universe of connected intelligent
industrial products, processes and services, the Industrial Internet of
Things generates data essential for developing corporate operational
efficiency strategies. However, the Accenture report finds that the
Industrial Internet of Things also provides a rich opportunity to drive
revenue growth through new, innovative and augmented services for a
rapidly expanding marketplace.
The potential payoff is enormous. Third party sources predict that
global investment in the Industrial Internet of Things is predicted to
reach $500 billion by 20201: a 2,400 percent increase from
the $20 billion spent in 2012. Companies that introduce automation and
more flexible production techniques to manufacturing can boost
productivity by as much as 30 percent2, and predictive
maintenance of assets can save companies up to 12 percent over scheduled
repairs, can reduce overall maintenance costs by up to 30 percent and
can eliminate breakdowns by 70 percent3.
“Industrial companies have long supplemented their product revenues with
services,” said Paul Daugherty, chief technology officer, Accenture.
“But innovators, companies that understand that every business is a
digital business, are using this technology to create product-service
hybrids that provide new growth opportunities and pave the way for
pioneering the next generation of industrial products.”
According to the report, innovative industrial companies can capture
growth in three ways. They can:
-
Boost revenues by increasing production and creating new hybrid
business models
-
Fuel breakthrough innovations through intelligent technologies
-
Transform the workforce to cultivate the new skills required for
Industrial Internet of Things jobs
Boost revenues and production and create hybrid business models
Companies are already spending heavily on digital services to help
increase production and efficiency. Accenture’s report explains that
many of these same companies are also investing in their own solutions
to improve the performance of existing assets and processes that stretch
across the entire supply chain. These product-service hybrids, by
connecting intelligent physical assets capable of producing data for use
in digital services, have the ability to combine product sales and
leasing with recurring income streams from digital services. These
services also enable firms in industries such as resource-extraction
(such as mining or oil companies) and process industries (such as food
or chemical manufacturers) to make better decisions, enjoy better
visibility along the value chain and improve productivity.
Fuel innovation through intelligent technologies
Manufacturers soon will be building intelligence into every machine they
produce and the innovative applications that accompany these smart
machines will be vehicles for driving new revenue streams out of
product-service hybrids. To reap the full benefits of the Industrial
Internet of Things, says Accenture’s report, companies must exploit
sensor-driven computing, industrial analytics and intelligent machine
applications and weave together enterprise and machine-generated data to
create new monetization opportunities.
Transform the workforce to cultivate new skills and talent
The Industrial Internet of Things will open up new workforce needs as it
simultaneously creates redundancy in others. It will digitize certain
tasks and workflow, especially repetitive jobs that, up until now, have
resisted automation. Accenture’s report forecasts that to efficiently
capture these burgeoning opportunities, companies will need to look for
skills in data science, software development, hardware engineering,
testing, operations, marketing and sales. And they will need to expand
their talent base to handle the creation of new service sectors that
support these diverse users of industrial products and services while
mastering new ways of working.
“Business customers will always need products and services that create
more value for them,” said Daugherty. “For example, Michelin Group is
using sensors inside tires that, combined with analytics, can coach
truck fleet drivers on how to save fuel. Daimler AG, the carmaker, has
created a rental service called Car2Go that forgoes the typical
centralized rental office in favor of a downloadable smartphone app that
allows users to access cars directly wherever they are parked. For those
companies looking to build a more innovative mousetrap – a new
product-service hybrid that will completely revolutionize their company
or industry – now is the time to harness the emerging Industrial
Internet of Things to identify new growth opportunities and, with the
right vision and leadership, turn them into reality.”
About Accenture
Accenture is a global management consulting, technology services and
outsourcing company, with more than 293,000 people serving clients in
more than 120 countries. Combining unparalleled experience,
comprehensive capabilities across all industries and business functions,
and extensive research on the world’s most successful companies,
Accenture collaborates with clients to help them become high-performance
businesses and governments. The company generated net revenues of
US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page
is www.accenture.com.
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David Floyer, “Defining
and Sizing the Industrial Internet,” Wikibon, June 27, 2013;
Peter C. Evans and Marco Annunziata, “General Electric: Industrial
Internet, Pushing the Boundaries of Minds and Machines,” November
2012.
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| 2. | | |
“Industry
4.0: Huge potential for value creation waiting to be tapped,”
Deutsche Bank Research, May 23, 2014.
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| 3. | | |
G. P. Sullivan, R. Pugh, A. P. Melendez and W. D. Hunt, “Operations
& Maintenance Best Practices: A Guide to Achieving Operational
Efficiency, Release 3.0” Pacific Northwest National
Laboratory, U.S. Department of Energy, August 2010.
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Contacts:
Accenture
Peter Y. Soh, 703-947-2571
peter.y.soh@accenture.com
or
Hannah
Unkefer, 415-537-4848
hannah.m.unkefer@accenture.com
Source: Accenture
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