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Accenture Articulates its ER&D Ambitions

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We were recently briefed by Accenture on the creation of Industry X.0 within its Accenture Digital organization. The discussion far exceeded the scope we were expecting of Industrial IoT, and it signaled Accenture’s expansion in Engineering and R&D discussions (ER&D), with bold ambitions not just from a product design perspective, but also from a manufacturing and product aftermarket perspective.

In 2017, Accenture made the following changes to the high-growth Accenture Digital:

  • Accenture Analytics integrated the AI capabilities of Accenture and was renamed Accenture Applied Intelligence
  • Accenture Mobility, which housed both mobile app development and IoT, was split. The mobile apps business was merged with Accenture Technologies’ Application Services unit, based on the rationale that this activity no longer requires to be incubated within Accenture Digital.

However, Accenture Interactive was left untouched, with its focus on service design, UX, CX, digital marketing, personalization, content strategy and development, and commerce services.

The creation of Accenture Industry X.0 was based on the IoT capabilities of the Accenture Mobility unit. It integrated several units from across Accenture, including its embedded systems capabilities, its PLM services units (both of which from Accenture Technologies) and its manufacturing-specific capabilities (MES services, and PLM services).

The combination of these units has implications: Accenture’s IoT services offerings were based on use cases, with the intention of creating a systematic map of use cases based on COTS or on its own software products. Industry X.0 has broader ambitions, both in product design and manufacturing:

  • In product design, Industry X.0 is emphasizing its digital and agile approach to products, using the now well-established mix of ideation workshops, design thinking/UX, and MVP. It is expanding its capabilities in embedded systems, as well as its mechanical engineering capabilities. Acquisitions are likely to further boost expertise. Accenture is expanding in the world of ER&D services, where the likes of Altran, Alten, and HCL Technologies dominate. The surprise is that Accenture Industry X.0 is taking a full capability approach; we were expecting a narrower emphasis on embedded systems, and IoT
  • In product manufacturing, Accenture Industry X.0 is taking a more defined approach. With its MES and SCADA systems capabilities, the practice addresses the IT side of manufacturing plants, and also manufacturing strategy.

Going forward, the strategy of Accenture Industry X.0 includes deploying analytics and AI, looking at use cases such as product quality and production throughput improvement. Product quality is a high priority for using deep learning, e.g. image recognition to identify defects within products.

Product design is the revenue growth part of Accenture Industry X.0’s value proposition, whereas with product manufacturing the emphasis is on achieving cost savings. Accenture is emphasizing its prototype to manufacturing approach, helping clients create prototypes that can be moved to the production phase. Accenture also has a sourcing branch in the Special Economic Zone of Shenzhen, close to Hong-Kong. It is also ready to do short series manufacturing, either directly or through contractors.

Finally, along with product design and manufacturing, Accenture Industry X.0 is also starting to develop its ‘support’ services, e.g. applying new hardware such as robots and drones to reduce the reliance on human-intensive activities.

Accenture is taking a well-articulated and comprehensive approach to the ER&D services industry that we have not often seen with its peers. Apart from the vision, can Accenture deliver on its product design and manufacturing strategy, given the fact that ER&D service specialist vendors have a well-established geographical presence and a track record in the industry? Accenture certainly has a track record in execution. Also, it is likely that M&A will be an important element of its growth strategy. With >70k vendors operating in the ER&D services industry, Accenture certainly has space for its ambitions.

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