Digital disruption is no more a buzz word. It is the new wave driving industrial reinvention and is the key pointer for the sustainability and profitability of an organization. In this era of digitization, businesses across the globe are leveraging cutting edge technologies to reinvent their core operations, their associates, customer experiences and finally their business paradigms.
In this context, the impact of Artificial Intelligence (AI) cannot be underestimated; rather it has become the new driver of digital reinvention. When integrated with other digital technologies including machine learning, IoT and data analytics, it can create industry X.0* products that transform with their users and continually enhance the customer experience. If industrial leaders can implement such digital products in the market, it can drastically improve growth and enhance market capitalization.
Companies having a clear cut vision that AI is bound to transform the future of their products and processes are bound to be winners, wherein they can clearly appreciate the value it creates. They drive senior management and financial resources to create the necessary skills and tweak the business model to integrate AI.
In fact, a positive trend is most industrial companies recognize the potential of AI, based on a recent survey by Accenture across 500 manufacturers, hailing from six industrial sectors from six countries. Most of them were quite enthusiastic about AI, though way behind in comprehending the true value that AI could bring to their business. Among them, only a small group has been leveraging AI completely for creating value-based products and services. Again, within this group, the survey found that almost 98% have commenced embedding AI with other digital technologies (notably mobile computing and Big Data Analytics), generating higher operational efficiencies and superior customer experiences.
Though every industry has its own set of approaches to tackle the challenge of AI-powered industrial reinvention, however, the survey found that all successful companies had embarked on a sequential, four-stage journey as follows:
Stage 1: Faith
Digital reinvention is all about faith and conviction. Companies need to have faith in the power of AI to transform the future of their products and businesses and to integrate key stakeholders, along with them. As per the survey, it has been found that 70% believed in the power of AI, displaying high-level conviction.
Stage 2: Envision
Crossing the first stage, the second stage is all about converting this conviction into a commercially successful vision. However, miserably only 16% had turned conviction into a commercially marketable vision. Interestingly, in most of the cases, it’s the CEOs who had pushed the top teams to generate the investment and appropriate strategies to acquire, integrate and secure the data that is required to generate optimum value from AI. Moreover, these leaders had envisioned that the adoption of AI can enhance customer loyalty and generate deeper insights from product and service usage, apart from being vocal that smarter products and services coupled with high security and safety will be the key outcomes for their customers.
Stage 3: Commit
With a strong vision coupled with a data-driven strategy, the next step is to focus on the right management and financial resources, spanning two major areas such as:
a. Acquiring the skills required to ensure that there is no resistance with respect to the integration of new with archaic infrastructures.
b. Modifying the business model to integrate AI.
It is surprising to note that just 5 percent of executives, who have been surveyed, could reach this level and had the commitment to integrate AI.
Stage 4: Execute
Another interesting fact is that only 2% of those surveyed accomplished the scale required to spearhead the market value from their digitally reinvented products. For this, they had worked closely with their partners of their eco-system to identify in detail the appropriate AI elements, which they wanted to integrate with other digital technologies – currently and in the near future.
From the above discussion, it is evident that the re-invention of industrial products with AI flavor is still in the nascent stages and takes time to gain maturity that is quite challenging, though not impossible. However, the survey has thrown some positive outcomes which clearly imply that business leaders are slowly embracing AI, and their success rate is a great inspiration for other leaders to follow suit.
For AI to become a game changer for any industry, it is essential that the CEOs take the following actions:
Faith: Portray your faith in the digital transformation of the product and communicate authentically.
Envision: Explain the product you want to digitally transform, assess the value to be generated and owned, and estimate the outcome on top and bottom lines.
Commit: Push the senior management to commit itself to forge strategic and beneficial partnerships that drive value and alleviates risks.
Implement: Use your eco-system to transform, be open to experiments throughout the journey and empower your associates to design and service digitally transformed products throughout their life cycle.
Without any skepticism, it has to be admitted that industries are still immature to fully adopt digitally reinvented products and services. However, few are already at a mature stage of AI adoption and are slowly forging key partnerships and strategizing their investments for developing proactive and collaborative products and services. The future is AI, and when integrated with other digital technologies and leveraged at a strategic level, it can generate tremendous value for a business. Now is the right time to join the invigorating digital journey that can take you miles ahead of your competitors.
* A term coined by Accenture, one of the leading IT services companies.