PwC Chief Technologist Chris Curran recently said that you can’t leave emerging technology to chance or luck, but that this was a trap many companies fell into due to resource constraints, competing priorities, and different views to how technology can lift a business.

He offered five practices a business leader could start with in preparing for Industry 4.0:

1.    

Rethink the way you experiment. Make sure that you evaluate technology through a business lens.  This will allow you to experiment with technology that can differentiate your company, with the aim of expanding capability so that you can do things your competitors won’t be able to do.

 

2.    

Engage with your emerging technology ecosystem. Identify the organisations and startups working with and researching the tech relevant to your industry, products, customers and markets. Establish working relationships where suitable, and keep an eye on all of them. For example, you could think about partnering up with a university or other suitable educational institution.

 

3.    

Build your own learning lab. If your enterprise is getting to a certain size, you should certainly start thinking about having an innovation team to get business value from ideas – perhaps through the creation of demos and prototypes. You can share whatever you create internally, or with selected partners and customers.

 

4.    

Develop a maker’s mindset. Curran said that enterprises should develop thinking which allows them to draw connections across technology and solve real-world problems. He says that ‘makers’ are willing to try, test and fail, get their hands dirty, and share and build on other people’s discoveries.

 

5.    

Established a process to scale emerging technology. Curran believes that regular enterprise working processes, such as building a business case and planning projects with the financial benefits in mind, won’t work for tech-driven innovation. He suggests processes with shorter stages that includes advancing ideas, developing prototypes, market testing, and scaling.

 

Read more about the fourth industrial revolution's impact on the UK and further afield:


 

'Industry 4.0' was just a buzzword

 

A few years ago, business leaders in sectors like manufacturing may have considered Industry 4.0 as the latest technology buzzword, but research from PwC’s shows that many business leaders are already putting down investment, and that organisations that didn’t were at risk of being left behind.

PwC claims that Industry 4.0 will revolutionise industrial production, with businesses on average generating 3.6% p.a. cost reductions until 2021, driven by internal improvements and working more closely across value chains. They also expect to generate 2.9% p.a. in increased revenues by digitising products and services, as well as developing new digital service offerings.

33% of industrial companies say they’ve already achieved advanced levels of digitisation, while 72% of companies expect to achieve advanced levels of digitisation by 2020.

 

Driving productivity gains in the UK

 

According to the independent, industry-led Made Smarter Review, led by Siemens UK CEO Professor Juergen Maier, in the next 10 years industrial digitisation could boost UK manufacturing by nearly £340bn, increasing sector growth by 3% and creating a net gain of 175,000 jobs.

"Organisations needed to wake up quickly and make quick decisions on how they plan to adapt."

And recently, the Confederation of Business Industry put out a call to action to business leaders, to unite behind a ‘leapfrog’ industrial strategy to win with Industry 4.0. Again, the message was that organisations needed to wake up quickly and make quick decisions on how they plan to adapt.

Dean McGlone, Sales Director at Finance Automation company V1, said, “We’ve seen organisations embrace our technology to automate financial processes in their finance department and in fact, across their organisation. Is it changing the face of the finance team? Absolutely.

“But the reality is that it is removing mundane tasks that can be effectively streamlined by cutting edge technology and driving productivity gains. These time savings can free up staff to focus on more high-value, strategic roles – such as ensuring the finance team provides the data-driven insight to the rest of the business about new opportunities and trends, so that businesses can make informed decisions based on the numbers.”

 

What have American manufacturers done so far?

 

The value that companies get from new technologies could (or should) be able to exceed low-single-digit cost savings. In the US, a report from Boston Consulting Group suggested that although American manufacturers recognised Industry 4.0 value, they are approaching the opportunity in piecemeal fashion and could miss significant business benefits. BCG said that to succeed, companies must set ambitious goals and capture value rapidly over a transformation spanning many years.

"The winners will approach the race to Industry 4.0 as a series of sprints, yet manage their program as a marathon.”

Justin Rose, A BCG Group partner and co-author of the report said, “Industry 4.0 stands out as a means of generating significant productivity gains. The real value is achieved when manufacturers maximise the impact of these advances by combining them in a comprehensive program.

BCG partner Vlad Lukic and fellow co-author of the report said, “Our findings point to the need for U.S. manufacturers to gain a deeper understanding of how they can apply Industry 4.0 and accelerate the pace of adoption. The winners will approach the race to Industry 4.0 as a series of sprints, yet manage their program as a marathon.”

 

It’s important to remember that the change being brought about by Industry 4.0 won’t be considered as ‘new’ and ‘cutting edge’ for very long.

Because ideas can spread at such a rapid speed, we’ll soon see multiple companies come up with their own versions of the same business products and solutions. Simply playing at innovation won’t be enough to separate your business from the competition – your organisation needs serious planning and strategy to avoid falling behind.