Global Research: The Connected Industrial Workforce

Global Research
The Connected
Industrial Workforce
April 2016

2Copyright © 2016 Accenture All rights reserved.
• Background
• About the research
• Executive summary
• Key findings
• Recommendations
• Connect with us to know more
• Appendix
– Country highlights
2
Agenda

Digital revolution is transforming manufacturing
By bringing machines and artificial intelligence into the workforce, digital is
enabling an increasingly adaptable, change-ready, and responsive working
environment: a Connected Industrial Workforce in which men and
machines, working together, reinvent the production and service
processes by which manufacturing outcomes are achieved.
The Connected Industrial Workforce promises to boost manufacturing
productivity exponentially, as well as improving operational efficiency, and
enhancing safety and risk management. But are manufacturers ready to
embrace it?
Accenture conducted a survey to research the awareness and perceptions,
challenges and readiness of industrial companies to implement a
Connected Industrial Workforce. The findings are based on the self-
perceptions of the executives surveyed.

About the research
COUNTRIES
(n)
China 101
France 100
Germany 100
Japan 100
Switzerland 10
United States 101
INDUSTRIES
%
Industrial
Equipment
51%
Construction
Equipment
25%
Automotive 24%
FUNCTIONS
%
CEO 6%
CIO 9%
COO/CSCO 10%
CTO 9%
Director/Head of
industrial
Engineering
9%
Director/Head of
Digital Strategy/
Chief Digital Officer
7%
Director/Head of IT
Department or
Deputy
9%
Director/Head of
Research &
Development
8%
HR Manager
(Concerned with
Digital topics)
8%
Other managerial
positions concerned
with Digital
9%
Factory Director 8%
Operations Manager 9%
REVENUES
%
Over $10 bn 6%
Between $5.1 bn
and $10 bn
19%
Between $1.1 bn
and $5 bn
42%
Between $500 m
and $1 bn
33%
EMPLOYEES
%
More than 50,000
employees
8%
10,001 up to 50,000 13%
5,001 up to 10,000 27%
2,001 up to 5,000 43%
1,501 up to 2,000 6%
1,000 up to 1,500 3%

Executive summary
In the next 5 years, the
manufacturing environment will
significantly evolve: from
human- to human-machine-
centric.
Manufacturing executives believe
that the main benefits of this
Connected Industrial Workforce
will be an exponential
improvement in manufacturing
productivity, improved
operational efficiency, and
enhanced safety and risk
management.
To realize the identified potential,
companies today spend on
average 18% of their R&D
budget on the Connected
Industrial Workforce. In 5 years,
this is expected to increase to
on average 24%.
Collaborative robots are the
preferred technology to achieve
the desired productivity
improvements: 63% of the
investigated companies already
employ collaborative robots to
boost productivity.
Shortage of skilled labor, data
security and system vulnerability
are the major challenges that
have to be overcome.
Digital Leaders are already
implementing Connected
Industrial Workforce solutions,
strong action plans and higher
investments.

Key findings

Awareness of a Connected

In 5 years, respondents expect the focus of technology in the production
environment to evolve from human- to human-machine-centric
The Augmentation-Automation spectrum
Manual Autonomous
Human-centric Machine-centric
Today
Future
Human with Tools
27%
4%
-23 pts
Machine Augmenting
Human
35%
11%
-24 pts
Collaborative
Machines
24%
29%
+5 pts
Human Augmenting
Machine
11%
30%
+19 pts
Autonomous
Machine
3%
26%
+23 pts
5 year
difference
Q: Which of the following best describes your understanding of the Connected Industrial Workforce today, and how do you think it will be
described in 2020?

Today, 94% of executives consider a Connected Industrial Workforce
essential to their business strategy, but only 22% have taken steps to
implement it
Connected Industrial Workforce and business strategy
Q: Do you consider the Connected Industrial Workforce to be an important component of your business strategy today?
Q: Which statement best describes what drives how the Connected Industrial Workforce is formulated within your business strategy?
Q: Which statement best describes the maturity of your company’s Connected Industrial Workforce strategy?
94% say Connected Industrial
Workforce is an essential
element of their business strategy
62% of those companies want
to actively set the agenda for the
But only 22% have already
implemented Connected
Industrial Workforce measures

Workforce evolution leads companies to dedicate a higher portion of their
R&D budget to a Connected Industrial Workforce
Current and future Connected Industrial Workforce budget
Q: Please estimate your current investment requirements and requirements in the next 5 years associated with the Connected Industrial
Workforce within your company. Please state the amount as a percentage of the overall R&D (Research & Development) spending of
your company.
Today, companies spend on
average 17.6% of their R&D budget
on Connected Industrial Workforce.
In 5 years, companies will spend on
average 23.6% of their R&D budget
for Connected Industrial Workforce.
Connected Industrial Workforce budget as % of annual R&D spend

Benefits of a Connected

The majority of respondents expect benefits in the areas of improved
productivity, operational efficiency and safety and risk management
Top 5 benefits of adopting the Connected Industrial Workforce
Q: Over the next five years, what are the biggest benefits that will drive adoption of the Connected Industrial Workforce within your
industry? % ranked in top 3
Improved productivity
Improved operational
efficiency
Improved safety and
risk management
Optimized asset
utilization
Additional competitive
advantage
51
%
36
%
35
%
33%
30%
49
%
46
%
32%
32%
24%
53
%
53
%
29%
26%
30%
52
%
47
%
31%
29
%
28%
Automotive
(n=123)
Industrial Equipment
(n=263)
Total
(n=512)
Construction
Equipment
(n=126)

Exemplary Case 1: How the Connected Industrial Workforce helps to
unlock the value potential of digital along the OEM value chain
Partial Digitization Strategy – EBITDA Potentials per Digitization Lever
Note: This Exhibit is based on a fictitious automotive brand with an industry average of 50.0 b€ in revenue and 5.0 b€ in EBITDA. Its product portfolio only consists of passenger cars.
Source: Accenture Strategy. Digital Value Creation in the Automotive Industry. Accenture Research Analysis.
Manufacturing
& Supply
Marketing &
Sales
Research &
Development
715 m€115 m€ 415 m€ Aftersales 225 m€
05. Asset Efficiency
01. Analytics-based PLM
Improvement 65
02. Virtual Product Deve-
lopment & Prototyping
04. Digital-enabled
Manufacturing 250
03. Digital Supply Chain
Management 125
50
40
50 b€ Brand
Revenue impact = EBITDA potential of 6.50 % (130 m€) Cost impact = EBITDA potential of 23.0 % (460 m€)
08. Analytic-based Media
Spend Optimization
10. POS Digitalization
25
11. Online Sales 55
09. Centralized Digital
Content Management 100
07. Digital-enabled
Lead Management 195
06. Predictive &
Personalized Offers 235
100
5
14. Digitization of Face-2-
Face Experience
16. Over the Air
Features
17. Digital-enabled
Workforce 30
15. 3D Printing of Spare
Parts 5
13. Personalized After
Sales Offers 90
12. Predictive
Maintenance 30
10
25
18. Aftersales Online
Store 35
Connected Industrial Workforce as a value lever to unlock the full potential
Example:
According to our respondents,
improved operational
efficiency and optimized
asset utilization are two of the
most important benefits of
the CIW.
Our survey results and analysis indicate that the Connected Industrial
Workforce is able to leverage an EBITDA potential of almost 500 m€
$

Exemplary Case 2: For the automotive supplier, the Connected Industrial
Workforce impacts 8 value levers with an EBITDA potential of 220m€
Partial Digitization Strategy – EBITDA Potentials per Digitization Lever
Note: This Exhibit is based on a fictitious automotive supplier with an industry average of 20.0 b€ in revenue and 2.0 b€ in EBITDA. Its product portfolio is limited to automotive. .
Source: Accenture Strategy. Digital Value Creation in the Automotive Industry.
Manufacturing
& Supply
Marketing &
Sales
Research &
Development
19 m€150 m€ 250 m€ Aftersales 33 m€
01. Analytics-based PLM
Improvement 20
02. Virtual Product Deve-
lopment & Prototyping
05. Digital Supply Chain
Management 60
20 b€ Brand
Revenue impact = EBITDA potential of 7.25 % (145 m€) Cost impact = EBITDA potential of 22.0 % (440 m€)
Connected Industrial Workforce as a value lever to unlock the full potential
Our survey results and analysis indicate that the Connected Industrial
Workforce is able to leverage an EBITDA potential of more than 250m€
$
03. Model based Product
Development
04. Virtual Product
Development 20
65
40
5
07. Connected Machines
06. Assisted Operators 30
09. Smart Factory
10. Virtual Testing 10
08. Connected Products 70
50
20
10
Example:
Together with Collaborative
robots or AGV’s the smart
factory will come to alive.
According to our respondents,
these are the most important
productivity levers which the
CIW implementation promises.
12. Digital Marketing 13
11. Digital Customer
Management 6
14. Analytics for aftersales
(OEM, Wholesaler, SC) 14
13. B2C Online store 4
15. Warranty Analytics
(OEM & Wholesaler) 15

Collaborative robots are the preferred technology to achieve the desired
productivity improvements
Top 5 applied technologies/devices
Q: Which technologies are most important for productivity improvement in your industry?
Collaborative robots
(e.g., Baxter or YuMi)
Automated Guided Vehicles
(AGVs) (e.g. unit loads)
Augmented reality devices
(e.g. Smart Helmets)
Tablets
Smart Watches
71
%
72
%
56
%
39
%
31%
Automotive
(n=123)
56
%
45
%
52
%
49
%
33
%
62
%
49
%
48
%
52
%
40
%
(n=263)
63
%
54
%
51
%
48
%
36
%
Total
(n=512)
Construction Equipment
(n=126)
Collaborative Robots Automated Guided Vehicles Smart Devices

Today, injection molding is commonly assigned to collaborative robots,
but respondents see the highest future potential in assembling
Assigned tasks to collaborative robots*
Q: Which tasks does your company currently assign or plan to assign to collaborative robots in the next 5 years?
*Note: Only Respondents who employ collaborative robots
Today, injection molding is the
most commonly assigned task
to collaborative robots.
The highest potential is seen
in assembling with 39% of
companies planning to assign
this task in the next 5 years.
In the next 5 years, gluing and
welding will be the most
common task assigned to
collaborative robots with 72%.

Challenges in the adoption of a

More than two thirds of companies are concerned about the availability
of the right skills and about data and system vulnerability
Importance of each risk associated with the Connected Industrial Workforce
Q: How do you assess the importance of each of the following potential risks associated with the Connected Industrial Workforce?
27%
29%
30%
32%
36%
38%
31%
42%
44%
34%
35%
40%
29%
25%
30%
Medium Risk No RiskHigh Risk
Shortage of skilled workers
Data vulnerability
(e.g. privacy threats, corporate data
security)
System vulnerability
(e.g. system breakdowns due to
complexity)
Employment legislation or
labor union objections to Connected
Job losses

Security concerns are seen as the most important challenge when it
comes to adopting a Connected Industrial Workforce within a company
Challenges for adoption
Q: What are the 3 greatest challenges of adopting the Connected Industrial Workforce within your company? % ranked in top 3
Q: What are the 3 most important security challenges for your company when you think of the Connected Industrial Workforce? % ranked in top 3
Top 3 Challenges
Top 3 Security Challenges
Security concerns
Implementation complexity
Legacy equipment (e.g. no
connectivity or embedded
sensors)
Network security
Corporate data security
Cloud security
34%
31%
28%
42%
39%
35%

Readiness to implement a

Automotive companies consider themselves to be leaders in digitization
Industry assessment
Q: How would you assess the current degree of digital or digitization for your industry overall?
Note: Digital Laggards (1-6); Digital Followers (7-8); Digital Leaders (9-10)
24%
24%
23%
23%
51%
55%
58%
55%
25%
21%
19%
22%
The automotive
business is already
disrupted from several
angles. It is already
realizing the huge
potential of a digital
automotive industry.
Automotive
(n=123)
(n=263)
Construction
Equipment
(n=126)
Total (n=512)
Digital Leaders (9-10)Digital Followers (7-8)Digital Laggards (0-6)
In 2020, we estimate that the Connected Industrial Workforce could be helping to unlock as much as
€500 million in profitability for an automotive manufacturer with annual revenues of €50 billion.

Automotive is investing more than other industries in the Connected
Budget allocation in current and future Connected Industrial Workforce adoption
and implementation
Q: Please estimate your current investment requirements and requirements in the next 5 years associated with the Connected Industrial Workforce
within your company. Please state the amount as a percentage of the overall R&D (Research & Development) spending of your company.
The Automotive industry is leading in investing in the Connected Industrial Workforce
and will extend its lead over the next 5 years.
Connected Industrial Workforce budget as % of annual R&D spend

Digital Leaders dedicate more of their R&D budget to a Connected
Industrial Workforce and will continue to raise the bar over the next 5 years
Budget allocation in current and future Connected Industrial Workforce adoption
and implementation
14%
19%
23%
19%
25%
29%
Today, companies leading
in digitization spend
almost double the amount
than digital laggards.
In the next 5 years, digital
followers risk lagging
further behind due to the
continued increase in
investment of those
already in the lead.
Connected Industrial Workforce budget as % of
annual R&D spend
Today
Next 5 years
LeadersFollowersLaggards

In the next 5 years, Digital Leaders plan to implement a Connected
Industrial Workforce strategy, whereas Digital Followers will still invest in
defining it
Current and future investments in
Consulting Services
Q: In which kind of technology or professional service do you plan to invest?
28%
32%
27%
38%
33%
25%
Digital Leaders Digital Followers Digital Laggards
% of companies investing in
consulting services to implement their Connected
Industrial Workforce strategy
38%
20% 23%
39%
30%
22%
Digital Leaders Digital Followers Digital Laggards
% of companies investing in
consulting services to define a Connected Industrial
Workforce strategy
Digital Leaders are already one step
ahead and will increase investments
in consulting services to implement
the Connected Industrial Workforce
from 28% to 38%.
The share of Digital Followers
investing in consulting services to
define their Connected Industrial
Workforce strategy will increase from
20% to 30% within the next 5 years.
Today Next 5 years

In the next 5 years, more Digital Leaders will increase their investments
in collaborative robots and augmented reality devices
Current and future investments of Digital Leaders in Hardware
Q: In which kind of technology or professional service do you plan to invest?
Today, half of the Digital Leaders invest in autonomous guided vehicles.
In the next five years, more Digital Leaders will start investing in collaborative robots
and augmented reality devices.

Digital Leaders recognize the urgency and have the confidence to drive
adoption of the Connected Industrial Workforce
How to embrace the Connected Industrial Workforce
Support from leadership
Hiring new talent
External companies
to help
Training & new roles
0% 20% 40% 60% 80% 100%
Digital Leaders and
Followers have a strong
and balanced agenda to
embrace the Connected
within their company.
Digital Laggards lack
determination in closing
the gap to benefit from
the Connected Industrial
Workforce.
Tactical importance of actions to embrace Connected Industrial
Workforce
Digital Leaders Digital FollowersDigital Laggards
High importanceLow importance
Q: How important will the following be to help your employees embrace the Connected Industrial Workforce?

Over 80% of Digital Leaders have taken action to connect the workforce
in terms of hardware, software and people
Measures to “connect” the workforce
Q: To what extent does your company take any of the following measures to “connect” or “digitize” the existing workforce?
51%
46%
46%
39%
32%
33%
41%
36%
45%
51%
16%
13%
18%
16%
17%
Upgrading existing IT
hardware infrastructure
Increasing the level of
automation
Increasing the number of
connected tools
Upgrading existing
software landscape
Developing new modes of
job-related training and
skills
Measures taken by Digital Leaders to connect the workforce
Have started to use this measure on a pilot-program
basis
Have fully functional programs using this
measure
Have not started with pilots or have
not planned to implement
More than 80% of
companies leading in
digitization have already
implemented or are
currently piloting relevant
measures.
Half of Digital Leaders
have already invested in
upgrading their IT
hardware infrastructure
and in connecting their
devices.

Recommendations

Envision the full promise of the Connected Industrial Workforce to get
started on your journey
Define the specific benefits that apply to you. Be bold in your
thinking. Leading companies already are.
Identify and address what’s holding you back. Is it Legacy IT
systems, data and systems security or the skills gap?
Raise your game. Dedicate higher proportions of your R&D budget to
build a Connected Industrial Workforce.
Define your journey and who owns it. Gain senior leadership support,
engage all stakeholders in the strategic plan, identify the value you
expect to drive and track it appropriately.
Identify new job profiles. Build, train or hire to acquire the right skills.

Connect with us to learn more
René Wiedemann
Industrial Equipment Industry
Lead, Switzerland
rene.wiedemann@accenture.com
Christian Hauke
Study Lead
christian.hauke@accenture.com
@AccentureInd
Read the full report
www.accenture.com/connectedworkforce
Eric Schaeffer
Global lead for Industrial
eric.schaeffer@accenture.com
Research Team
Georg Berger
Research
georg.berger@accenture.com
Matthias Wahrendorff
Industrial Research Lead
matthias.wahrendorff@accenture.com

Appendix

Country highlights

US company executives believe they are leading the way
The results clearly indicate
that the US is already working
on its transformation of the
industrial workforce.
US companies realize that the
Connected Industrial
Workforce will play a huge
role in staying ahead of the
competition within the
industrial sector.
28% of their R&D budget is spent already on
Connected Industrial Workforce. In 5 years, it
will be 40%.
28% of US companies can be seen as Digital
Leaders.
53% of US companies have
already implemented Connected Industrial
Workforce measures.
IT Security is considered the most important
challenge in adopting the Connected Industrial
Workforce in the US.
IT Security is considered the most important
challenge in adopting the Connected Industrial
Workforce in the US.

German company executives reveal they need to
boost their efforts
German companies are aware
that the Connected Industrial
Workforce is key to driving
future business in the
industrial sector.
Many companies are piloting
Workforce measures but they
are currently hesitant to
implement them.
15% of their R&D budget is spent
on a Connected Industrial Workforce.
In 5 years, it will be 20%.
Only 10% of German companies
can be seen as Digital Leaders.
71% of German companies are currently
piloting Connected Industrial Workforce
measures, but only 10% have already
implemented solutions.
Implementation complexity is considered the
most important challenge in adopting the
Connected Industrial Workforce.
Legal issues will not pose a challenge in
adopting Connected Industrial Workforce
measures.

French company executives reveal they are yet to
connect their workforce
Most French companies say
that they’re currently piloting
Workforce measures.
Only 12% are first movers
and have already connected
their industrial workforce.
on a Connected Industrial Workforce.
Only 8% of French companies can be seen as
Digital Leaders.
65% of French companies are currently piloting
Connected Industrial Workforce measures, but
only 12% have already implemented solutions.
IT Security concerns are considered the most
important challenge in adopting the Connected
Industrial Workforce.
Difficulty of migration/installation will not pose a
challenge in adopting Connected Industrial
Workforce measures.

18% of their R&D budget is spent on a
Connected Industrial Workforce. In 5 years,
it will be 23%.
25% of Chinese companies can be seen as
Digital Leaders.
73% of Chinese companies are currently
measures, 20% have already implemented
solutions.
Legacy Equipment is considered the most
important challenge in adopting the Connected
measures.
Chinese executives believe they are moving with
confidence
20% of Chinese executives
say they have already
implemented Connected
solutions. 73% are piloting
Workforce measures or
reviewing their pilots.
There is a high proportion of
digital leaders among
Chinese companies and
these are driving the digital
agenda in their respective
industries.

Japan’s industrial executives reveal they are yet to
realize the benefits
Most Japanese companies
say that they are currently
piloting Connected Industrial
Workforce measures. Only
11% are first movers who
have already implemented
solutions.
on Connected Industrial Workforce.
Only 4% of Japanese companies see
themselves as Digital Leaders.
61% of Japanese companies are currently
measures, but only 11% have already
implemented solutions.
IT Security and cost concerns are the most
important challenges in adopting the Connected
measures.

Global Research: The Connected Industrial Workforce

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