Accenture’s Aidan Quilligan recently shared insights on two crucial factors for developing and scaling innovation at the Dassault Systèmes 3DEXPERIENCE FORUM that took place earlier this week in Las Vegas.
“For reinventing your business, you should reinvent your product first,” said Mr. Quilligan who knows that this initial step is key. Digitization will not only change how we make things—it will also change the things we make. Value chains are already shifting away from mere hardware products, to hyper-personalized experiences and even outcomes, driven by digital services, software, and connected products. Dassault Systèmes refers to this—among other things—when they speak of the Internet of Experiences.
Within the automotive industry, the shift to connected, software-equipped, and AI-enabled vehicles is already resulting in enormous challenges. While the business model of making and selling cars is now under pressure, an Accenture study predicts the growth of a new, digitally enabled mobility market to go beyond 122 billion dollars as early as 2030. In other words: digital is changing both the notion of what a product is, and of what value is.
The share of value derived from hardware components is already falling, whereas the share of digital services and software is rising. Companies will have to push beyond the ideal of digitization just to increase efficiencies.
A smart factory with 10 times more efficiency sounds great, but you must understand the new values your market expects. Consequently, automotive manufacturers should think beyond increasing the efficiency of building cars by 10. As strategy shifts towards mobility, manufacturers must plan to seize shares in the mobility market. They need to determine what value will be created first and go from there.
Faurecia, a French supplier in the automotive industry, has set an example by digitally reinventing its products and services.
This idea of digitally powered product reinvention has also enabled Keurig to go beyond the line. The leader in specialty coffee, coffee makers, teas, and other beverages in the U.S. created the Drinkworks Home Bar. It is a vending machine to use at home that prepares carbonated and non-carbonated cocktails and beer at the optimal temperature, and also captures the consumption data to support auto replenishments and promotions.
Scale your reinventions
A recent Accenture survey of 1,350 C-level executives shows that their companies were spending considerable amounts of money to scale their digital innovations efforts. However, only 22 percent of the sample were scaling successfully. Why? The 22 percent were found to consistently pay attention to these three key actions:
- Defining the value guiding digitization efforts
- Driving internal organizational change and external digital value
- Building in-house innovation factories to hard-wire innovation and digital capabilities in the core of their organization
, and into the much more promising ones of Industry X.0 and the Internet of Experiences.”