Innovation Is Switching from a Product Focus to Differentiating the Customer Experience, With $1 Billion in Revenues Up for G...
November 29 2016 - 4:03AM
Business Wire
Leading companies are moving beyond products to
create a superior connected customer experience
A focus on distinct innovation and product development
capabilities is paying off for some companies as they deliver
between three and seven percent higher annualized revenue than
their peers, Accenture research shows.
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Accenture has quantified the economic and
financial impact of leading innovation and product development
practices for eight industries. (Graphic: Business Wire)
A survey of 351 G2000 companies across eight industry sectors
and nine countries -- Canada, China, France, Germany, Italy Japan,
South Korea, the United Kingdom and the United States -- shows that
leaders are evolving their approach to innovation by developing a
total customer experience that combines product, service, software
and hardware. Two thirds (66 percent) of companies surveyed
reported that their most successful innovations in the last two
years have been derived from improved customer experiences and
related new business models versus new products alone.
Accenture has quantified the economic and financial impact of
leading innovation and product development practices for the eight
industries below. The research and analysis identifies the specific
innovation and product development capabilities that correlate to
revenue increase and operating income lift in each of the eight
industries surveyed.
“It is no longer enough to build the next generation car, music
player, crane or plane to satisfy customers. Companies need to
provide a superior experience to their rivals, from the point a
customer shows interest in a product, through the research and
purchase, to long after they own the item, with a series of
services to keep the customer delighted,” said Richard Holman,
managing director, Accenture Strategy. “Companies across all
sectors are rewriting the playbook for how they innovate and
organize to drive growth, with leaders achieving between 3.5
percent and seven percent higher revenues that are attributable to
distinct approaches to innovation, product development and solution
development.”
The impact of applying innovation to all aspects of consumer
interaction, rather than just a product will be significant.
Accenture estimates for the automotive industry, the impact of
applying innovation in this way could see revenues increase by up
to $1 billion; for consumer technology the revenue impact could be
$633 million; for medical technology, it could be $581 million; and
for industrial equipment manufacturers, the industry impact of
innovation in this area could see a revenue increase of $567
million.
The research reveals the innovation and product development
capabilities on which leaders in each industry focus. For example,
in the Communication Equipment industry, the focus is on new
business incubation and integration, while in the Industrial
Equipment sector, the leaders focus on innovation and product
development. For the Consumer Goods sector, a focus on corporate
& product strategy alignment is the primary distinct innovation
capability focus.
Leading companies are differentiated by “innovating in the new”
versus “innovating in the core.” Traditional hardware companies are
being disrupted by digital technologies and are shifting their
strategies to focus on software and new connected experiences.
Industries ranging from sporting apparel companies, traditional
toys and games to refrigerators and other consumer durables
manufacturers are now enabling consumer services through higher
level of interactivity, personalization and functionality. For the
leaders, differentiation comes from being able to go beyond asking
customers what they want and instead targeting customers’ and
consumers’ unmet needs.
Based on the survey data, Accenture has segmented four distinct
categories of innovators: Early Innovator, Value Maker, Market
Share Protector and Efficient Executor. All of the leaders fall in
either the Early Innovators or Value Makers category.
“The leading innovators, who Accenture defines as ‘Early
Innovators’ and ‘Value Makers’ are focusing innovation to deliver
differentiated outcomes, solutions and experiences, at a strategic
level. They are seeing higher revenues as a result,” said Eric
Schaeffer, senior managing director and head of Accenture’s
Industrial practice. “Only 20 percent of those companies surveyed
fell into these two categories, with the vast majority falling into
the other two categories, typified by a more tactical approach to
differentiated customer experience. ‘Value Makers’ find new ways to
connect with customers through platforms and ecosystems, in which
the product or service is just one dimension of a much larger value
proposition.”
Methodology
Accenture analyzed the innovation practices and value
performance of 351 businesses from the Global2000 across eight
industries (automotive, industrial equipment, consumer goods,
medical technology, enterprise technology, consumer technology,
communications technology and software) and nine geographies –
Canada, China, France, Germany, Italy Japan, South Korea, the
United Kingdom and the United States. Interviews were carried out
with Chief Technology Officers, Division Presidents and Division
Vice Presidents of engineering and innovation, or their equivalent.
The results confirm a clear, empirical correlation between distinct
innovation capabilities and company growth. Leaders benefited from
a 3.5-7.0 percent annualized revenue lift and a corresponding
operating income growth compared to their industry peers. Leaders
were identified as the top 20 percent of all companies as defined
by their industry-specific financial performance along with their
advanced innovation approaches and capabilities.
About Accenture
Accenture (NYSE:ACN) 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 384,000 people serving clients in more than 120
countries, Accenture drives innovation to improve the way the world
works and lives. Visit us at www.accenture.com.
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AccentureAnthony Hatter, + 44 7810 756
138anthony.hatter@accenture.com
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