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This week has seen the world’s leading industrial show and one of the biggest trade fairs take place at the Hannover Messe in Germany. While digital technology that transforms and disrupts was omnipresent, professional services firm Accenture used the show to launch a good old-fashioned book, Industry X.O – Realizing Digital Value in Industrial Sectors, written by Eric Schaeffer.
It is a book with a thoroughly modern message though: that industrial manufacturers must begin to digitise their operations, products and services if they are to make the most of the Industrial Internet of Things (IIoT), artificial intelligence (AI) and other Industry X.O technologies.
It is not the first time this wake-up call has been issued to business leaders but supporting statistics are difficult to ignore. Accenture Research and the World Economic Forum found that industrial manufacturers could contribute to unlocking an estimated $100 trillion in value over the next seven years if they succeed in leveraging the power of the IIoT and digital.
Schaeffer warns that the ship has “clearly sailed” for digital sceptics, with the industrial sectors (which comprise two thirds of the world’s GDP) being changed beyond all recognition by digital technology, disrupting “decades-old business habits, conventions and operating models”.
The book puts forward six “no regret” capabilities required for industrial businesses to master digitisation in preparation for Industry 4.0 or the fourth industrial revolution. These are: having a superior approach to product lifecycle management; embedding software intelligence and connectivity; using analytics to gain insights; becoming agile; transitioning to ‘as-a-service’ business models; and creating and running ecosystems.
While much of this could apply to all sectors, at Rialto we concur with the belief that time is running out for those leaders who are passively standing by as digital disruption takes place around them: digital transformation is no longer the future but the present and you need to be fully prepared for it.
Many fears may be at the root of a leader’s apparent lack of drive when it comes to digital transformation including fear of the unknown, fear of change, fear of failing, fear of losing power or control, or fear of damaging the core business and more.
The sensible thing to do in life when experiencing such feelings is to discuss it with others and it is no different for business leaders trying to make sure their organisations are fit for the future in the digital era.
The final “no regret” capability on Accenture’s list is creating and running ecosystems. This will be key because, as Schaeffer points out, “no single” company will be in a position to own the whole digital value chain in the so-called outcome economy. “Co-ordinating ecosystems of suppliers, customers, technology partners, start-ups, academia, competitors and other stakeholders will become the norm.”
This also chimes with Rialto’s message in our white paper, Seizing opportunity in an unpredictable 2017, when we explored the rise of the frenemy; unlikely alliances and the importance of collaboration. It demands new styles of leadership and mindsets. Leaders must become far more collaborative and willing to seek help and advice and be prepared to contribute their own knowledge and skills to the greater good of an industry.
It is indisputable that the coming years are going to be difficult and uncertain at times but the good news is no leader has to face it alone.
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