The Internet of Things is changing how energy and other manufacturers should approach their business.
The Internet of Things (IoT) environment is fast developing and fast moving. A changing energy market with new innovators and new innovations, and consumers increasingly demanding on demand interaction and information, is requiring incumbent players such as utilities and product and service developers to respond at a similar pace.
As a example of a response, Schneider Electric, with the help of management consultant Accenture, has developed what it calls a ‘virtual’ factory aimed at enabling it to rapidly build and scale new offerings in areas such as predictive maintenance, asset monitoring and energy optimisation.
The virtual, or Digital Factory, is staffed with professionals from Accenture and Schneider Electric, and gathers data from millions of connected assets across the latter’s infrastructure and customer sites, in order to speed the development of the new products and services.
“We are driving the digitisation of our businesses, and the Digital Factory will significantly speed up our efforts,” says Cyril Perducat, Executive VP of IoT & Digital Transformation at Schneider Electric.
“With new capabilities like analytics, design thinking, rapid service prototyping and iteration, we are now able to bring new services to market much, much faster.”
That “much, much faster” is envisaged as a reduction in the time from product ideation to market launch from three years to less than eight months.
The Digital Factory provides a range of services, including generating and incubating new ideas, designing and testing potential offerings, and deploying and scaling solutions, as well as providing the analytics and IoT capabilities to accelerate their development.
The collaboration is part of a five-year contract that Accenture was awarded by Schneider Electric in January 2016 to support the ongoing rollout of industrial IoT-enabled solutions and digital services.
In addition to supporting the development of the Digital Factory, Accenture is providing a range of services around innovative ideation and customer-centric solution development, business model development and analytics, and the ‘new digital service lifecycle’, which combines customer analytics with agile, iterative service development and delivery.
Such an approach is supported by recent research from Accenture, which found that industrial manufacturers believe digital technologies are vital for their future, but that they risk losing market share and profits because their levels of digital adoption and their ability to innovate is low.
Indeed, two-thirds of industrial companies that Accenture surveyed said they are feeling the impact of digital disruption, but half of them are not yet comprehensively investing in this area as part of their overall business strategy.
The energy sector comprised just 2% of Accenture’s survey base. Nevertheless, and despite the highly innovative nature of many industry players in the sector, the findings in the form of five key trends are insightful.
One of these is the growing role of artificial intelligence in technology interfaces, which is pointing the way to how future ‘interactions’ and ‘experiences’ will take place.
Another is the leveraging of digital partnerships with third parties to move beyond platforms and build out new ecosystems that can secure future strategic growth.
Broadly coupled with this is the trend of legacy workforce models and hierarchies being replaced with open talent marketplaces with teams that adjust to the job at hand.
A fourth trend is of technology being designed specifically for individual human behaviour, which in turn will redefine the way people work and businesses interact with their customers.
The last is the need for businesses not only to develop new products and services but also to take a central role in shaping these ecosystems with standards, rules, etc.
What are some of the implications?
Accenture predicts that in five years, more than half of customers will select services based on a company’s artificial intelligence instead of its traditional brand.
The majority also will be purchasing goods or services through digital ‘middle men’ such as messaging platforms, connected devices or smart assistants.
New dominant industry leaders will have business structures based on small cores and powerful ecosystems, while performance-based contracts between two or more parties will exclusively be smart contracts that self-govern and self-execute.
On-demand labour platforms will emerge as a primary driver of economic growth.
“The continuously evolving digital culture creates challenges and opportunities for organisations worldwide,” states Accenture in its report.
“With our world in a state of change at every level, being a leader isn’t just about incorporating new technologies. It’s about finding a place in the next evolution of society, by empowering people –whether they are customers or employees – and becoming a partner, embedded throughout everyday life.”