RETHINK, REINVENT, REALIZE. - Accenture · 2019. 9. 19. · RANK 3 3D printing 3D printing Cyber Security Protocols Mobility AR/VR Cloud ASIA-PACIFIC RANK 1 Mobility Quantum Computing

RETHINK,REINVENT, REALIZE.How to successfully scale digital innovation to drive growth

INTOTHE NEW

UTILITIES – GEO CUTS

Copyright © 2019 Accenture. All rights reserved. 2

OUR PREMISE AND RESEARCH QUESTION

When it comes to digital transformation,

scaling innovation pilots is critical.

Yet many clients tell us that they are struggling with

this very step – and feel that they might get stuck with

“piecemeal projects” that don’t deliver significant value.

THE IDEA: FIND INDUSTRY X.0 BEST PRACTICES!

Can we find key best practices that

could help them overcome their

challenges, and drive real change,

for real new growth?


UTILITIES GEOS AT-A-GLANCE

Source: Accenture 2019 Industry X.0 Survey

NORTH AMERICA APACEUROPE

n=34companies with

1bn+ in revenue

62%C-suite respondents

2countries

n=55companies with

1bn+ in revenue


7countries

n=31companies with

1bn+ in revenue


4countries


OUR KEY FINDINGS

A SURPRISE! (we didn‘t expect to find that many

companies trying to scale!)

THE REASON TO READ! (these best practices are what

readers will come for)

Companies are scaling nearly

60 percent of all digital PoCs,

but only about four out of ten

companies are doing it successfully.

What’s the difference?

• North America leaders clock the

highest RODI

• European leaders are best at

estimating their RODI

• APAC has the highest proportion

of Champions.

Following the four best practices

of these “Champions” is a recipe to succeed at innovating for

digital transformation.

THE RESULT: IT’S ALL A MATTER OF MANAGEMENT!


Q:

A: THINGS ARE SPEEDING UP –IN SURPRISING WAYS.

WHAT’S THE CURRENT STATUS IN SCALINGDIGITAL INNOVATION?

Copyright © 2019 Accenture. All rights reserved.

NORTH AMERICA AND EUROPEAN UTILITIES FOCUS ON DIGITALLY SECURING THEIR ASSETS


15%

18%

9%

15%

32%

12%

5%

20%

11%

15%

31%

18%

26%

16% 16%

13% 13%

16%

Product and Service Design& Development

Production & Operations Supply Chain & Logistics Sales & Aftersales Service Digital/Physical Security Continuous CustomerEngagement

INNOVATION PRIORITY


APACNorth America Europe

LOW SCALING INTENSITY OF NORTH AMERICAN UTILITIES CAN BE ATTRIBUTED TO THEIR HIGHER DIGITAL MATURITY


* “scaling intensity” = ratio of avg. number of proof of concepts scaled to avg.

number initiated in each business function, across discrete and process industries.

47,4%49,2%

54,0% 54,1%

38,8%

47,0%

65,8%

61,8%

55,4%

59,8%61,8% 62,3%

60,4% 60,9%

51,9%53,9%

64,6%63,2%

Product & Service Design Production & Operations Supply Chain & Logistics Sales & Aftersales Service Digital/Physical Security Continuous CustomerEngagement

North America Europe APAC

SCALING INTENSITY*


Top 10 outcomes targeted by Utilities companies through scaling of digital PoCs in different regions

ANOMALY DETECTION AND IMPROVED ASSET UTILIZATION ARE KEY OUTCOMES FOR UTILITIES COMPANIES…

Copyright © 2019 Accenture. All rights reserved. 8Source: Accenture 2019 Industry X.0 Survey

NORTH AMERICA EUROPE ASIA-PACIFIC

RANK OUTCOMES %* OUTCOMES %* OUTCOMES %*

1 Lower manufacturing cycle time 59% Physical site security 49% Greater use of generative design 55%

2 Higher capacity utilization 56% Lower number of prototype iterations 45% Lower energy utilization 52%

3 Improved supply chain efficiencies 56%Automated systems anomaly

detection44% End-to-end material tracking 48%

4 Improved data privacy 56% Reduced conversion costs 44% Greater plant flexibility 48%

5Digitized purchase order

management53%

Zero workplace accidents/Increased

worker safety44% Improved asset utilization 45%

6 Better end-of-life services 53% Improved asset utilization 42% Pervasive ecosystem-level security 45%

7Automated systems anomaly

detection53%

Greater modularity in product/service

design42% Better end-of-life services 45%

8 Digital, interactive user interfaces 53%Management of entitlements across

product lifecycle42% Automated systems anomaly detection 42%

9 Reduced time to market 50% End-to-end material tracking 42%Greater modularity in product/service

design42%

10 Faster prototype iteration 50% Higher growth in service revenues 40% Reduced time to market 42%

*% of respondents achieving the outcome

Top 3 technologies leveraged to facilitate scaling, by function

…AND THEY ARE CHOOSING CLOUD, CYBERSECURITY SOLUTIONS AND AR/VR TO DRIVE THESE OUTCOMES


PRODUCT &

SERVICE DESIGN

PRODUCTION &

OPERATIONS

SUPPLY CHAIN &

LOGISTICS

SALES &

AFTERSALES

SERVICE

DIGITAL/ PHYSICAL

SECURITY

CONTINUOUS

CUSTOMER

ENGAGEMENT

NORTH

AMERICA

RANK 1 AR/VR 3D printingCyber Security

ProtocolsBlockchain

AI/AI-powered

AutomationAR/VR

RANK 2 Mobility Autonomous Vehicles Cloud Cloud Autonomous VehiclesCyber Security

Protocols

RANK 3Machine/Deep

LearningBig Data Analytics

IIOT Sensors &

TransmittersAI Assistants Digital Twin

Machine/Deep

Learning

EUROPE

RANK 1 AR/VR Blockchain Cloud CloudCyber Security

ProtocolsBig Data Analytics

RANK 2Machine/Deep

Learning

IIOT Sensors &

TransmittersAutonomous Vehicles AI Assistants

IIOT Sensors &

Transmitters

AI/AI-powered

Automation

RANK 3 3D printing 3D printingCyber Security

ProtocolsMobility AR/VR Cloud

ASIA-PACIFIC

RANK 1 Mobility Quantum Computing Blockchain Cloud Quantum Computing AI Assistants

RANK 2 Cloud Industrial RoboticsIIOT Sensors &

TransmittersDigital Twin

Cyber Security

ProtocolsAR/VR

RANK 3 Big Data Analytics 3D printingMachine/Deep

LearningMobility Blockchain

Machine/Deep

Learning

Q:

A: NO. SOME COMPANIES RACE AHEAD, OTHERS STRUGGLE.

WHAT ABOUT SCALING SUCCESS – DOES EVERYONE SEE IT?


34%

53%

13%

Very few North American Utilities achieve Champion status as investments are highly regulated by state regulators, making it harder to scale without a lengthy approval process and rate increase.

SO, WHO’S SCALING THE BEST?


EUROPE

*Percentage of champions in each geography = 100 x (The number of champions in a particular geography)/(Total number of companies surveyed in that particular geography)

**Percentage of champions in each industry = 100 x (The number of champions in a particular industry)/(Total number of companies surveyed in that particular industry)


12%

65%

23%

NORTH AMERICA

36%

61%

3%

APAC CHAMPIONS

Earn RODI higher than industry ROIC

and industry RODI; scale more than

50% of their digital Proof-of-Concepts

CONTENDERS

Earn RODI lower than industry ROIC and

lower than industry RODI; scale more than

50% of their PoCs

CADETS

Earn RODI lower than industry ROIC and

lower than industry RODI; scale less than

50% of their PoCs

Despite the low percentage of Champions, North America Champions earn a higher RODI compared to their peers from Europe and APAC

CHAMPIONS SET THEMSELVES HIGHER “RODI” TARGETS AND ACHIEVE THEM TOO.


Expecte

d

Achie

ved

Achie

ved

23,8%

5,5%

16,1%

30,5%

5,3%

16,6%

RODI expected

RODI achieved

RODI expected

RODI achieved

RODI expected

RODI achieved

NORTH AMERICA


CHAMPIONS

CONTENDERS

CADETS

20,7%

6,1%

14,7%

23,5%

4,6%

10,1%

RODI expected

RODI achieved

RODI expected

RODI achieved

RODI expected

RODI achieved

EUROPE

15,5%

4,9%

3,0%

23,5%

4,9%

1,0%

RODI expected

RODI achieved

RODI expected

RODI achieved

RODI expected

RODI achieved

APAC

Returns on Digital Investment (RODI) = Returns on Investment (Net Gain/Total Investment) from scaled digital POCs across

all the key business functions. We asked executives about the average RODI they expected before scaling digital POCs, and the RODI

they finally achieved.

Q:

A:LIKE CHAMPIONS, CONTENDERS AND CADETS TOO FACE ALIGNMENT AND INFRASTRUCTURE DEFICITS. WHILE CHAMPIONS OVERCOME THESE, OTHERS CONTINUE TO GRAPPLE WITH THEM.

WHAT’S STOPPINGCONTENDERS AND CADETS FROM BECOMING CHAMPIONS?


SECURING FUNDING FOR DIGITAL REINVENTION PROJECTS FROM THE BOARD IS STILL NOT EASYExtent to which securing funding from the board for digital reinvention is a challenge


0%

11%

13%

20%

13%

5%

20%

25%

40%

9%

2%

5%

11%

18%

25%

Not at all

To a limitedextent

To a moderateextent

To a largeextent

To a greatextent

Europe

RANK

TOP 3 REASONS WHY BOARDS OF UTILITIES

COMPANIES REFUSE TO FUND DIGITAL

REINVENTION

NORTH

AMERICA

1. Lack of a clear digital roadmap

2. Inadequate ROI from digital investments

3.Lack of a digital-native mindset among Board

members

EUROPE

1. Lack of a clear digital roadmap

2.Poor understanding of digital reinvention within Top

Management

3.Lack of a digital-native mindset among Board

members

APAC

1. Failure to scale digital PoCs in the past

2. Shortage of and difficult access to digital skills

3. Foreseen immaturity of technology


APAC

North America

Utilities executives’ top picks* for “biggest challenges to scaling digital PoCs”

ALIGNMENT CHALLENGES AND LACK OF INFRASTRUCTURE ARE OF PRIMARY CONCERN (1/2)


• other options which weren’t picked s often included: “Inadequate infrastructure to innovate relevant digital value with speed”, “Inadequate infrastructure to combine multiple digital technologies”, “Absence of culture to stimulate technology driven cross-functional innovations”, “Lack of partnerships to handle deep data towards building a high-quality unified view of the customer and their needs”, "Lack of partnerships to bridge digital gaps across processes," "Inadequate metrics to systematically track digital technology investments“, “Drive in relevant lessons from applications of digital technologies”.

PRODUCT & SERVICE

DESIGNPRODUCTION & OPERATIONS SUPPLY CHAIN & LOGISTICS

NORTH AMERICA (NA)

EUROPE (EU)

ASIA-PACIFIC (AP)

NA EU AP NA EU AP NA EU AP

CHAMPIONS (CH), OTHERS (OT) CH OT CH OT CH OT CH OT CH OT CH OT CH OT CH OT CH OT

Inability to align top and middle

management to innovate customer value

Inability to align in-house innovation with

agile digital ecosystems

Inability to align top management view on

'digital value’

Inability to align talent pools and IT assets

across key business functions

Inadequate infrastructure to innovate with

digital technologies and platforms

Lack of skills to identify and articulate

business case for digital

Biggest challenge

Second biggest


Utilities executives’ top picks* for “biggest challenges to scaling digital PoCs”

ALIGNMENT CHALLENGES AND LACK OF INFRASTRUCTURE ARE OF PRIMARY CONCERN (2/2)


SALES, AFTER SALES SERVICE

DIGITAL / PHYSICAL SECURITYCONTINUOUS CUSTOMER

ENGAGEMENT

NORTH AMERICA (NA)

EUROPE (EU)

ASIA-PACIFIC (AP)

NA EU AP NA EU AP NA EU AP

CHAMPIONS (CH), OTHERS (OT) CH OT CH OT CH OT CH OT CH OT CH OT CH OT CH OT CH OT

Inability to align top and middle

management to innovate customer value

Inability to align in-house innovation with

agile digital ecosystems

Inability to align top management view on

'digital value’

Inability to align talent pools and IT assets

across key business functions

Inadequate infrastructure to innovate with

digital technologies and platforms

Lack of skills to identify and articulate

business case for digital

Biggest challenge

Second biggest


• other options which weren’t picked s often included: “Inadequate infrastructure to innovate relevant digital value with speed”, “Inadequate infrastructure to combine multiple digital technologies”, “Absence of culture to stimulate technology driven cross-functional innovations”, “Lack of partnerships to handle deep data towards building a high-quality unified view of the customer and their needs”, "Lack of partnerships to bridge digital gaps across processes," "Inadequate metrics to systematically track digital technology investments“, “Drive in relevant lessons from applications of digital technologies”.

WHAT DO COMPANIES STAND TO LOSE IF THEY FAIL TO ORGANIZE FOR DIGITAL REINVENTION?


9%

15%

12%

9%

15%

9%

21%

15%

26%

26%

32%

26%

21%

21%

24%

29%

24%

38%

26%

12%

12%

15%

9%

21%

15%

3%

3%

9%

6%

No Impact 1-5% 6-10% 11-15% 16-20% Above 20%

7%

11%

9%

7%

5%

24%

18%

20%

24%

20%

33%

27%

38%

42%

42%

27%

38%

24%

20%

22%

9%

5%

7%

5%

7%

2%

2%

4%No Impact 1-5% 6-10%

11-15% 16-20% Above 20%

13%

10%

13%

10%

32%

35%

29%

29%

26%

19%

19%

23%

19%

32%

19%

19%

23%

29%

19%

13%

13%

10%

10%

23%

3%

3%

3%

3%

No Impact 1-5% 6-10%

11-15% 16-20% Above 20%

EuropeNORTH AMERICA APAC

LOSS IN MARKET CAP

FALL IN MARKET

SHARE

REDUCTION IN

REVENUES

INCREASE IN ATTRITION

RATES

COST ESCALATIONS

Utility leaders fear significant escalations in cost, alongside losing market share, if they

fail to overcome organizational challenges

Our analysis reveals how much incremental value, by percentage, in RODI could be achieved by overcoming these challenges


12,7%

8,4%

13,1%

6,0%

9,6%

3,7%

8,4% 8,4%

6,5%6,0%

4,1%3,7%

Alignment Deficit Infrastructure Deficit Skills Deficit Partnership Deficit Measurement Deficit Cultural Deficit

INCREMENTAL RODI POTENTIAL IF DEFICIT IS OVERCOME

Utilities Cross-Industry


HOW MUCH CAN COMPANIES GAIN IF THEY OVERCOME THESE DEFICITS?

Q:

A: WITH 4 SPECIFIC BEST PRACTICES.

HOW DO CHAMPIONS OVERCOME THESE CHALLENGES AND SCALE THEIR DIGITAL INNOVATIONS?



1.

DEFINING THE VALUE THAT GUIDES

INNOVATION EFFORTS

Champions assess the opportunities before them, and

narrow in on the market opportunities they want to

pursue. They then use that clarity to communicate

with middle management and direct their innovation

efforts to secure expected returns.

FOCUS ON INTERNAL CHANGE AND

EXTERNAL VALUE

Champions prefer a measured approach to blend

organizational change with digital transformation

initiatives, creating what we call an ambidextrous

organization. With a clear view of the customer value,

managers and employees are less likely to feel

blindsided by a digital learning curve that is too steep.

2.


3.

BUILD IN-HOUSE INNOVATION FACTORIES

WITH TARGETED INFLUENCE

Champions recognize the enormity of integrating rapidly

advancing technologies, along with talent and assets, back

into their organization. In line with their ambidextrous

approach, they take the vital step to re-rig the core of their

organizations, seeding and growing new digital innovations

organically within organizational boundaries.

MAP KEY INNOVATION ENABLERS TO

APPROPRIATE BUSINESS FUNCTIONS

Most manufacturers use the same enablers to drive

innovation, such as software applications to support

operations, or analytics platforms to generate better

insights. However, Champions alone are masters at

matching the support to the function that needs it

most and will use it best.

4.

Q:

A: YES THERE IS…

IS THERE A ROADMAP TO MATURE AS AN ORGANIZATION TOWARDS SUCCESSFULLY SCALING DIGITAL INNOVATION?


23

PLATFORM

… WE HAVE BUILT ONE LEVERAGING

FIVE KEY ORGANIZATIONAL LEVERS

LEADERSHIP &

CULTURE

ECOSYSTEM

PARTNERSHIPS

SKILLSETS TECHNOLOGY



CO

NT

EN

DE

RS

CA

DE

TS

CH

AM

PIO

NS

Ecosystem

Partnerships

Skill Sets

Cyber Security Protocols

AI/AI-powered Automation

Cloud

Customer Experience Analysis

Digital Program Management

Quality Analysis

Network Architecture

Startups

Tech partners

Sustainability experts

Channel partners

Competitors

Academia

Product Lifecycle Management

Management Information System

Product DataManagement

Immersive Experience

Simulation Data Management

Application Lifecycle Management

Maturity curve of organizational levers

in the Utilities sector

Machine Learning/Deep Learning

Digital vision and value and execution roadmap

‘Easy-win’ collaborationsDigital experimenters

Strategic acquisitions to scale wisely

Digitally rotating to the new

Collaborations to scale more

Strong belief in digital

Digitally transforming core business

Reorganized

to Reinvent

Traditional

Organization

Leadership &

Culture

Digitally transforming and growing the core


Enterprise Resource Planning

Digital Sales & Marketing

Platform

UX Design

Technology

TOP 10 SKILL SETS FOR UTILITIES CHAMPIONS -NORTH AMERICA


Automation Expertise along with Agile/Scrum and AI/ML training are critical skills to

build and scale digital PoCs

38%

29%

25%

21%

21%

21%

21%

21%

21%

17%

29%

34%

31%

34%

34%

33%

28%

31%

33%

33%

Automation Expertise

Agile/SCRUM Expertise

AI/ML Training

UX Design


Digital Production Management



Customer experience analysis

Engineering

% of APAC Utilities respondents saying “Very Important”

Champions

Others

TOP 10 SKILL SETS FOR UTILITIES CHAMPIONS -EUROPE


Digital Sales & Marketing along with Quality analysis and Network Architecture are

critical skills to build and scale digital PoCs

22%

18%

16%

15%

15%

15%

15%

13%

12%

11%

24%

18%

28%

23%

24%

27%

14%

17%

24%

22%



Quality Analysis

UX Design

Data Analysis/ Visualization




Engineering

Digital Systems Engineering

% of European Utilities respondents saying “Very Important”

Champions

Others

TOP 10 SKILL SETS FOR UTILITIES CHAMPIONS -APAC


Digital Systems Engineering along with Quality Analysis and Customer Experience

Analysis are critical skills to build and scale digital PoCs

29%

27%

27%

26%

24%

24%

23%

23%

21%

21%

20%

28%

34%

28%

27%

31%

29%

30%

22%

33%

Digital Systems Engineering

Quality Analysis

Customer experience analysis

Data Analysis/ Visualization

Engineering

Digital Platform Management

UX Design



Automation Expertise

% of North American Utilities respondents saying “Very Important”

Champions

Others

TOP 5 PARTNERSHIPS FOR UTILITIES CHAMPIONS – NORTH AMERICA


Customers and Developer Community are critical partnerships to build and scale digital PoCs

42%

33%

25%

25%

25%

21%

17%

17%

20%

21%

Customers

Developer Community

Suppliers

Channel Partners

Research Clusters

% of Utilities respondents

Champions

Others

TOP 5 PARTNERSHIPS FOR UTILITIES CHAMPIONS – EUROPE


Suppliers and Startups are critical partnerships to build and scale digital PoCs

34%

32%

29%

28%

27%

22%

19%

27%

22%

24%

Suppliers

Startups

Competitors

Customers

Academia


Champions

Others

TOP 5 PARTNERSHIPS FOR UTILITIES CHAMPIONS – APAC


Tech Partners and Competitors are critical partnerships to build and scale digital PoCs

45%

38%

33%

33%

33%

29%

30%

28%

27%

26%

Tech Partners

Competitors

Customers

Research Clusters

Startups


Champions

Others

Q:

A: CHAMPIONS PRIORITIZE CERTAIN CAPABILITIES, AND INVEST HEAVILY IN THEM

WHAT CAPABILITIES DO UTILITIES COMPANIES NEED TO BUILD AS THEY NAVIGATE ALONG THIS ROADMAP?


CHAMPIONS IN NORTH AMERICA WANT TO INVEST IN STRATEGIC DIGITAL ALIGNMENT AND RESKILLING FOR DIGITAL


100%

100%

75%

75%

75%

73%

67%

80%

67%

63%

Strategic Digital Alignment:

Reskilling for Digital

Integrating Hardware and Software:

Reinvention of The Product

M2M Synergies

% of respondents who will invest in these capabilities

Champions

Others

TOP 5 CAPABILITIES – NORTH AMERICA

This depicts their inclination towards skills such as Digital Platform Management, Digital Systems Engineering,

Digital Sales & Marketing and UX Design

CHAMPIONS IN EUROPE WANT TO INVEST IN AS-A-SERVICE BUSINESS MODEL AND MAINSTREAMING DIGITAL


84%

84%

79%

79%

79%

58%

61%

61%

58%

61%

As-A-Service Business Model

Mainstreaming Digital


Reinvention of The Product

Digital Roles


Champions

Others

TOP 5 CAPABILITIES - EUROPE



CHAMPIONS IN APAC WANT TO INVEST IN STRATEGIC DIGITAL ALIGNMENT INTEGRATING HARDWARE & SOFTWARE AND


91%

91%

91%

91%

91%

80%

80%

70%

65%

80%


Integrating Hardware and Software:

Automation Scale:

Big Data Analytics

Mainstreaming Digital


Champions

Others

TOP 5 CAPABILITIES - APAC




References:

David Abood, Aidan Quilligan, Raghav Narsalay, and Aarohi Sen (2019), Rethink, Reinvent, Realize, downloadable from here.

Striving to scale your own innovations?

Get in touch!

Whether you are seeking to start new initiatives the right way, help with scaling those you already have—we are ready to help you improve your outcomes by putting our knowledge to work! Please reach out to [email protected] or [email protected] at Accenture Research, or visit accenture.com/scaling-innovation

https://www.accenture.com/gb-en/insights/industry-x-0/scaling-digital

KEY CONTACTS

Aarohi Sen

Principal,

Thought Leadership, Industry X.0 [email protected]

36

Raghav Narsalay

Managing Director,

global Research lead, Industry X.0

[email protected]


Casey Wells

Senior Managing Director, Utilities global industry managing director [email protected]

TraceyCounryman

Managing Director, Resources Industry X.0 lead,

[email protected]

mailto:[email protected]

mailto:[email protected]

APPENDIX


SURVEY DEMOGRAPHICS – NORTH AMERICA (N=34)


EXEC PROFILE

ANNUAL REVENUE

62%18%

21%

C-SuiteSenior VP/EVPVP/Director

68%

26%

8%

US$1 - 10 Billion

US$11 - 30 Billion

US$31 - 50 Billion

GEO-SPREAD

97%

3%

United States Canada

SURVEY DEMOGRAPHICS – EUROPE (N=55)


EXEC PROFILE

ANNUAL REVENUE

40%

22%

38% C-SuiteSenior VP/EVPVP/Director

78%

15%

7%

US$1 - 10 Billion

US$11 - 30 Billion

US$31 - 50 Billion

GEO-SPREAD

SURVEY DEMOGRAPHICS – ASIA-PACIFIC (N=31)


EXEC PROFILE

ANNUAL REVENUE

55%26%

19%

C-SuiteSenior VP/EVPVP/Director

74%

19%

7%

US$1 - 10 Billion

US$11 - 30 Billion

US$31 - 50 Billion

GEO-SPREAD

About Accenture Research

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solutions for our clients.

For more information, visit www.accenture.com/research


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Documents

RETHINK, REINVENT, REALIZE. - Accenture · 2019. 9. 19. · RANK 3 3D printing 3D printing Cyber Security Protocols Mobility AR/VR Cloud ASIA-PACIFIC RANK 1 Mobility Quantum Computing