- Industry X.0 embraces constant technological change and profits from it
- Combines technologies and customer experiences to create a new business core
GLOBAL management consulting firm Accenture revealed its latest study on industry transformation that involved 931 senior executives across 12 manufacturing and production industries in Australia, Brazil, Canada, China, Denmark, Finland, France, Germany, India, Ireland, Japan, Mexico, Norway, South Korea, Singapore, South Africa, Sweden, Switzerland, The Netherlands, United Kingdom, and USA.
The study showed that companies need to completely reinvent their operating models, production, and value chains, to become what Accenture calls Industry X.0.
“Industry X.0 incorporates Industry 4.0’s core operational efficiencies and also leverages on combinations of advanced digital technologies to continuously create new, hyper-personalised experiences in both the B2C and B2B context,” said Accenture managing director-consulting David Hovenden.
The report shows that only 13% of companies have successfully managed to simultaneously drive both operational efficiency and new business growth from the 44% of companies that fully drove new growth and 34% that transformed the core.
Accenture Indonesia managing director technology consulting Leonard Nugroho said that industries in Indonesia that have started to adopt Industry X.0 are consumer goods, agriculture, automotive, logistics, and fintech.
“The players in these industries started to digitalise from their back-end systems, and now, they need to see what they can serve in the front line.”
One example would be brick and mortar companies starting to work with startups to help them in crowdsourcing for research and development.
Leonard, however, pointed out that the healthcare industry is lagging in transforming digitally.
“Although there are many initiatives in healthcare now, this industry is facing challenges in receiving suppliers and even talent.”
Accenture Indonesia digital lead R. Robby explained that industries which requires more regulation will lag too.
“But the good thing in Indonesia is that the government allows players to execute their initiatives first, while regulations are formulated later.
“An example is fintech where the players were coming out a few years ago. After they boomed, the government’s Financial Services Authority (OJK) drafted regulations for them.”
Hovenden, Robby, and Leonard agree that Indonesia still faces challenges in changing the mindset of management. It also has problems with cultural change and a lack of talent.
“The aim is to get the right partners where we can share our concerns and decide wisely on the things that need to be done,” said Robby.
Bloomberg recently released a report on the 50 most innovative countries in the world, but Indonesia was not ranked among them.
Leonard however, feels that we should see the status of each country and its potential individually.
“Whatever their rank is, there should be efforts to thrive and this ranking should not be the main denominator.”
Indonesia may want to learn from other countries such as, South Korea.
“A few years back, South Korea was a developing country without a powerful economy. However, they managed to develop and build their people’s capabilities by strengthening their education system, supported by government policies to boost some potential companies to come up big in the world market,” explained Robby.
Robby and Leonard both agree that with Industry X.0, Indonesia has the same potential as South Korea and could grow GDP, nurture unicorns, see large companies going regional, have a people-focused government and harvest a demographic bonus.
Elevating business to another level
The report also indicated six imperatives that Industry X.0 companies must address:
- Transform core business
- Focus on experience and outcomes
- Innovate new business models
- build a digital-ready workforce
- Re-architect new ecosystem
- Pivot wisely
In transforming the core business, companies need to drive new levels of efficiency around the digital era.
By connecting digital and physical aspects, both machines and software systems need to be synchronised to unlock cost efficiencies that could drive up investment capacity.
Focusing on experience and outcomes means investing to drive new, hyper-personalised experiences for customers, via multiple “smart touch points” and helping to grow core businesses by enhancing customer engagement.
Innovating new business models will help companies to drive differentiated value for their clients and new revenue streams for themselves.
In building a digital-ready workforce, companies have to source, train, and retain talent with digital-ready skills and encourage active collaboration between people and machines.
Creating a robust ecosystem of suppliers, distributors, startups, and customers will allow them to rapidly scale new business models across the digital value chain.
Companies need to pivot wisely by continually balancing investment and resource allocation between the core and new business to synchronise innovation and growth.
“Industry X.0 embraces constant technological change and profits from it. They move beyond experimenting with IT bundles or social, mobile, analytics, and cloud (SMAC) stacks, combining technologies to drive both top and bottom-line growth,” explains Hovenden.
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