There is a growing urgency for organizations to embrace Big Data analytics to advance their Industrial Internet strategy, according to a new report from Accenture and GE. However, less than one-third of the 250 executives surveyed for the study, released at GE’s Minds + Machines conference last week, are using Big Data across their company for predictive analytics or to optimize their business.
The Industrial Internet Insights Report for 2015 — based on surveys of executives in eight industrial sectors across North America, Europe and Asia — looks in particular at the role that Big Data analytics plays in creating innovative solutions for the Industrial Internet. In an interview, Matt Reilly, senior managing director for Accenture Strategy, talks about the research and some of the insights it has generated:
Why focus on Big Data analytics in this study?
Reports suggest that by 2020 there will be 50 billion things connected to the Internet. With that kind of scale, and that much information available to companies, Big Data analytics is the primary way that we will actually derive value from all the data coming in from machines and devices. The Industrial Internet has the potential to drive trillions of dollars in savings, in addition to new services and overall growth. But to reap those rewards, industrial companies will need to first use insights about their physical assets and their customers to build new offerings, reduce costs, innovate and serve customers better.
What’s the most surprising thing that emerged from the research?
One of the most compelling things is that the vast majority of executives told us that they believe Big Data will change the competitive landscape in their industry, and fast. Eighty-nine percent said they worry that if they don’t develop an approach, they’ll lose market share. Another intriguing item was the level of urgency that executives feel about advancing their capabilities. A vast majority of executives — 84 percent, in fact — indicated that Big Data analytics could shift the competitive landscape for their industry just in the next 12 months.
How do the surveyed companies differ from one another in terms of their analytics capabilities?
A helpful way to understand this is to think of a maturity curve that begins first with connecting machines and devices, then moves up toward monitoring, and then analyzing. As companies get more sophisticated, they then move into more complex capabilities, like predicting and optimizing. A good example of this is a global energy company that is able to analyze tens of thousands of data points in its wind farms every second. Then they use the data to optimize the operation of their turbines.
What we found, however, is that most companies — about three-fourths of them — are still in the connecting-monitoring-analysis stages of development. About a third are already at analysis, and that’s a good sign. But clearly most companies have a ways to go when it comes to really getting the most out of their data and using it to advantage.
What are some of companies’ biggest challenges?
This is very interesting because one of the biggest concerns we saw in our research wasn’t technical but was instead about finding the necessary workforce talent to support their Big Data analytics strategies. As one of the executives we spoke to commented, it’s great to have the data but then you need the people to analyze it and generate insights. Better hiring is one obvious path to filling in talent gaps, but predictions point to a dramatic shortage of data scientists in the future. More than half of the companies we surveyed intend to combat that shortage by using skilled external talent who can quickly translate business needs into analytics solutions. It’s important that the machines are talking to each other, but more important that the humans know what to do with what the machines are saying.
What’s one recommendation you would make coming out of the report?
One of the biggest recommendations is to look at the Industrial Internet and Big Data as the means not only to improve operations and reduce costs, but also as a way to create growth through new offerings. For example, as companies generate insights from their data they have the opportunity to add digital services to the mix of what they sell. This is a point Accenture makes strongly in another report we recently released—that the Industrial Internet can be a huge innovation generator.
What makes this report different from others on the topic of Big Data?
There are obviously a lot of reports on Big Data analytics and the Industrial Internet out there. Many are focused on describing macro trends. We think what makes this report unique is that it reflects the specific, current sentiments and viewpoints of over 250 executives across multiple sectors and geographies about where they stand right now in harnessing analytics — and then what that means for the value of the Industrial Internet. The report gives executives not only a sense of what their peers are thinking but also the realization that, as yet, companies are only tapping into a small percentage of the potential value of the Industrial Internet.
Matt Reilly is a Senior Managing Director in Accenture Strategy, which operates at the intersection of business and technology. Accenture is a global management consulting, technology services and outsourcing company, with more than 305,000 people serving clients in more than 120 countries.