INDUSTRYX.0 DIGITAL REINVENTION OF INDUSTRY. Eric Schaeffer

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1 INDUSTRYX.0 DIGITAL REINVENTION OF INDUSTRY Eric Schaeffer

3 Current Level of Disruption INDUSTRY X.0 SUCCEEDING WAVES OF DIGITAL TECHNOLOGY ARE DISRUPTING INDUSTRY VIABILITY Automotive Manufacturers Consumer Tech Segment Median: 0.58 Construction & Engineering VOLATILITY Industries sub segments 0.80 Software Integrated Oil & Gas Home/Personal Care Machinery & Electrical Equipment Segment Median: 0.50 Enterprise Mkts Apparel/Dept Stores Consumer Durables Fashion/Luxury Building Materials Pipelines Metals Home Building Agribusiness Air Upstream Production Operations Generation/Energy Markets DURABILITY Rail & Road Aerospace & Defense Healthcare Insurance Susceptibility to Future Disruption VULNERABILITY 5 2 Efficiency Innovation Defenses Disruptors Performance Current level of disruption Susceptibility to future disruption Copyright 2018 Accenture. All rights reserved. 3

5 DIGITAL IS REINVENTING THE PRODUCT WITH SOFTWARE BECOMING THE CONNECTIVE TISSUE FOR VALUE CREATION 5% 5% 10% 20% 20% 100% 30% 70% 20% 40% 40% 40% 30% 70% 60 s 80 s 2000 s 2010 s Future Source of value: Mechanical Electronic Embedded Software Digital Technologies Copyright 2018 Accenture. All rights reserved. 5

6 AND IT S REDEFINING THE VERY NOTION OF THE WHAT, HOW AND WHY OF THE PRODUCT YESTERDAY s PRODUCT Features THE PRODUCT OF TOMORROW Experiences Mechanical Mechanical Services Electronic Data Electronic Software Platform and Ecosystem HMI Software Digital Copyright 2018 Accenture. All rights reserved. 6

7 AI IS BECOMING THE KEY TECHNOLOGY IN TRANSFORMING AN ORDINARY PRODUCT INTO WHAT WE CALL PRODUCT X.0 INDUSTRIAL, ELECTRICAL & HEAVY EQUIPMENT AUTOMOTIVE Robots & AI MANUFACTURERS (6%) AND SUPPLIERS CONSUMER DURABLES Machine Learning Investment 5% Big Data Analytics (7.0%) GE s AI WORKFORCE AND PREDIX 73%of Industrial companies see AI penetrating at pace industrial products and services SIEMENS AI LAB AND ROBOTS CATERPILLAR CAT CONNECT Autonomous Driving (11%) Collaborative Robots (8%) MERCEDES SMART TRUCK BYTON Smart Cars (13%) FAURECIA COCKPIT OF THE FUTURE AI BMW Alexa Embedded Cars Smart Home (9%) Digital Factory (12%) HAIER U+ PLATFORM (SMART HOME) BLACK + DECKER SMARTECH RANGE Smart Cities (3%) Smart Buildings (9%) Collaborative Development 2% Remote Diagnostic (7%) Other Consumer Products Intelligent Health Solutions 3% AMAZON ECHO Source: Accenture Research Quid Copyright 2018 Accenture. All rights reserved. 7

8 BUT FOR MOST INDUSTRIAL MANUFACTURERS THE JOURNEY IS ONLY JUST BEGINNING 44% 100% 44% 68% 44% 16% 44% 5% 44% 2% ALL COMPANIES BELIEVE BELIEVE & ENVISION BELIEVE, ENVISION & COMMIT BELIEVE, ENVISION, COMMIT & EXECUTE Copyright 2018 Accenture. All rights reserved. 8

9 INDUSTRIAL COMPANIES THAT SUCCESSFULLY EMBED AI IN THEIR PRODUCTS DISPLAY UNIQUE ATTRIBUTES THEY BUILD DATA DRIVEN BUSINESS MODELS WITH A LIFETIME PERSPECTIVE AIM TO DRIVE VALUE ACROSS THE TOP AND BOTTOM LINE FOR THEIR CUSTOMERS TO WIN THEIR LOYALTY BY PIVOTING TO A MIX OF AI TECHNOLOGIES BEST SUITED TO DRIVE CUSTOMER GOALS AND BUILDING THE NECESSARY DIGITAL SKILLS AND ECOSYSTEM INCREASED SAFETY 89% CUSTOMER LOYALTY 82% ANALYTICS 78% 56% DATA ANALYTICS/SCIENCE 89% SMART SOLUTIONS AND SERVICES 78% INSIGHTS ON PRODUCT AND SERVICE USAGE 82% COMPUTER VISION 56% 78% SYSTEM INTEGRATION 78% PREDICTIVE MAINTENANCE MAINTANENCE 67% COST REDUCTION 73% ROBOTICS PROCESS AUTOMATION 44% 67% CREATING DATA LAKES 78% NEW TO MARKET EXPERIENCES REMOTE DIAGNOSTICS 11% 44% INCREASED REVENUE OPPORTUNITIES COMPETITIVE ADVANTAGE 55% 73% DEEP LEARNING/MACHINE LEARNING VIRTUAL AGENTS CURRENT 33% 67% 33% 56% NEXT THREE YEARS DEVELOPING AI ENABLED HARDWARE CONSULTATIVE SELLING 56% 67% Copyright 2018 Accenture. All rights reserved. 9

12 COFFEE X.0 Improved Brand recognition Increased revenues Sell more tea/coffee Always on Machine for Increased customer satisfaction Reduction in Service Management Cost Copyright 2018 Accenture. All rights reserved. #13,000 smart and connected coffee machines across India 12

DIGITAL SERVICE INNOVATION GENERATING $MILLIONS OF INCREMENTAL REVENUES AND CUTTING

THERE IS STILL HUGE VALUE TRAPPED IN THE ENTERPRISE WHICH CAN NOW BE UNLOCKED BY DIGITAL TECHNOLOGY Savings in costs per Employee EBITDA EXPANSION in $m for $10bn of revenues - BY 2020 Chemicals 23%

14 THERE IS STILL HUGE VALUE TRAPPED IN THE ENTERPRISE WHICH CAN NOW BE UNLOCKED BY DIGITAL TECHNOLOGY Savings in costs per Employee EBITDA EXPANSION in $m for $10bn of revenues - BY 2020 Chemicals 23% in $m 250 Med Techs 45% 200 Pharma 42% 150 Electronics 31% 100 Automotive 14% 50 A&D 17% 0 Automotive Electrical Equipment Consumer Products 10% 20% 30% 40% 50% Digital Customer Experience Digitize Operations New Business Models Copyright 2018 Accenture. All rights reserved. 14

DRIVING EFFICIENCY IN ENTERPRISE IN MANUFACTURING FOR EXAMPLE ANALYTICS ON THE SHOP FLOOR WELDING OPERATIONS AR / SMART GLASSES ON ASSEMBLY LINE - CABIN

15 DRIVING EFFICIENCY IN ENTERPRISE IN MANUFACTURING FOR EXAMPLE ANALYTICS ON THE SHOP FLOOR WELDING OPERATIONS AR / SMART GLASSES ON ASSEMBLY LINE - CABIN SEAT MARKING SHOP FLOOR TO TOP FLOOR IT INTEGRATION - ENGINE PLANT AIVI FOR QUALITY INSPECTION - PRODUCTION LINE Copyright 2018 Accenture. All rights reserved.

16 START YOUR JOURNEY NOW. ROTATING TO THE NEW IS A DELIBERATE & PERPETUAL PATH, NOT A SINGLE EVENT TRANSFORM THE CORE Digitize and integrate engineering, production, and support for new efficiencies. INNOVATE NEW BUSINESS MODELS Invent new revenue streams for new sources of value. FOCUS ON EXPERIENCES AND OUTCOMES Create hyper-personalized value to differentiate and lead in the market. BUILD THE WORKFORCE Source, enable, upskill and protect the next generation of talent. RE-ARCHITECT THE NEW ECOSYSTEM Assemble and refresh the right partners to drive new innovation and new capabilities. MANAGE THE WISE PIVOTS Continually balance investment and resource allocation between the core and the new. Copyright 2018 Accenture. All rights reserved. 16

17 MAYBE ONE LAST THING INDUSTRY X.0 REALIZING DIGITAL VALUE IN INDUSTRIAL SECTORS READ GET READY FOR INDUSTRY X.0 Realizing Digital Value in Industrial Sectors AI is radically transforming business. Are you ready? ALSO AMAZON Editions - English / German / Chinese / Japanese / French Copyright 2018 Accenture. All rights reserved. 17

18 Thank You! Eric Schaeffer

19 ABOUT ACCENTURE Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions underpinned by the world s largest delivery network Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 435,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at Copyright 2018 Accenture. All rights reserved. 19