Alphabet/Google is now the most innovative company in the world according to BCG, unseating Apple’s 13-year dominance of their annual rankings.
- Alphabet/Google is now the most innovative company in the world according to BCG, unseating Apple’s 13-year dominance of their annual rankings.
- Strong AI innovators are over three times more likely to have deep expertise in Big Data Analytics.
- The ten most innovative companies in the world extensively use AI and platforms today to grow faster than competitors and markets.
- T-Mobile, Dow DuPont, Vale, Stryker, and Rio Tonto join the list of the top 50 most innovative companies for the first time this year.
- Fastest movers include Adidas, who jumped from 35th to 10th, SAP who increased from 42nd to 28th and Phillips who improved from 49th to 29th.
These and many other insights are from the Boston Consulting Group’s 13th annual report defining the world’s most innovative companies in 2019. The Most Innovative Companies 2019: The Rise of AI, Platforms, and Ecosystems is a fascinating glimpse into the rising importance of Artificial Intelligence (AI) and of platforms that support innovation. What makes this survey noteworthy is how it captures how AI’s use is rapidly expanding and how enterprises are relying on platforms to scale their efforts in this area. BCG is providing an Interactive Guide that compares the 50 most innovative companies in the world, sortable by industry, company and year. There’s also interactive analysis of Steady Innovators or those companies who’ve appeared on the list every year since 2005. There are breakouts of New Entrants, Returnees, and Movers for easier analysis. The report is available for download here (28 pp., PDF, free). Forbes also has an annual list of the world’s most innovative companies you can find here. The methodology Forbes uses is explained in the post, How We Rank The Most Innovative Companies 2018. Key insights from BCGs’ most innovative companies of 2019 include the following:
- What differentiates the world’s most innovative companies are their creation and use of AI and platforms with Alphabet/Google, Amazon, Apple, and Microsoft leading all others. Each of them is actively creating and providing AI-based applications, platforms and ecosystems that enable enterprises to improve customer experiences, creating entirely new revenue streams, business models and competitive advantages. Alphabet/Google has defined its direction as an “AI first” company, intentionally creating a culture of AI-driven innovation. The following is BCG’s list of the most innovative companies of 2019:
- Enterprises who rate themselves strongest at innovation and better than average at AI base their self-evaluations on successfully changing customer experiences. BCG found that the most advanced enterprises using AI today are succeeding at changing customer experiences, creating new business models and measuring AI’s contribution to streamlining internal processes. 19.2% of all enterprises interviewed perceive themselves as being better than average at AI and strong innovators. The following graphic compares how enterprises rate themselves at AI versus their strength at innovation:
- Strong AI innovators are over three times more likely to have deep expertise in Big Data Analytics. Enterprises who perceive themselves as strong AI innovators based on their success using AI to improve customer experiences, create new business models and streamline operations are two times as likely to be faster at adopting new technologies. They’re also 65% more likely to be actively targeting technology platforms to scale their AI initiatives and strategies further. The following graphic compares strong and weak innovators’ relative levels of adoption across 15 different innovation and product development categories:
- Big Data Analytics, the speed of adopting tech, digital design, and technology platforms are the four areas enterprises who consider themselves strong innovators have the widest perceived advantage over weak innovators. When enterprises were asked which of the following 15 areas of innovation and product development will be the most impactful over the next 3 to 5 years, Big Data Analytics was far and away the most valued by strong versus weak innovators. Digital Design and Speed of Adopting Tech are two additional areas of innovation and product development that most differentiate the most and least innovative companies.
These and many other fascinating insights are from the Boston Consulting Group and MIT Sloan Management Review study published this week, Reshaping Business With Artificial Intelligence. An online summary of the report is available here. The survey is based on interviews with more than 3,000 business executives, managers, and analysts in 112 countries and 21 industries. For additional details regarding the methodology, please see page 4.
The research found significant gaps between companies who have already adopted and understand Artificial Intelligence (AI) and those lagging. AI early adopters invest heavily in analytics expertise and ensuring the quality of algorithms and data can scale across their enterprise-wide information and knowledge needs. The leading companies who excel at using AI to plan new businesses and streamline existing processes all have solid senior management support for each AI initiative.
Key takeaways include the following:
- 72% of respondents in the technology, media, and telecommunications industry expect AI to have a significant impact on product offerings in the next five years. The technology, media and telecommunications industry has the highest expectations for AI to accelerate new product and service offerings of all industries tracked in the study, projecting a 52% point increase in the next five years. AI-based improvements are expected to deliver Business Process Outsourcing (BPO) gains in the Financial Services and Professional Services industries as well. The following graphic compares expectations for AI’s expected contributions to business offerings and process improvements over the next five years by industry.
- Customer-facing activities including marketing automation, support, and service in addition to IT and supply chain management are predicted to be the most affected areas by AI in the next five years. Demand management, supply chain optimization, more efficient distributed order management systems, and Enterprise Resource Planning (ERP) systems that can scale to support new business models are a few of the many areas AI will make contributions to the in the next five years. The following graphic provides an overview of operations, IT, customer-facing, and corporate center functions where AI is predicted to contribute.
- 84% of respondents say AI will enable them to obtain or sustain a competitive advantage. 75% state that AI will allow them to move into new businesses and ventures. The research shows that AI will be the catalyst of entirely new business models and change the competitive landscape of entire industries in the next five years. 69% of respondents expect incumbent competitors in their industry to use AI to gain an advantage. 63% believe the pressure to reduce costs will require their organizations to use AI in the next five years.
- Despite high expectations for AI, only 23% of respondents have incorporated it into processes and product and service offerings today. An additional 23% have one or more pilots in progress, and 54% have no adoption plans in progress, 22% of which have no current plans. The following graphic provides insights into the current adoption of AI with survey respondents.
- By completing a cluster analysis of survey respondents based on AI understanding and adoption questions, four distinct maturity groups emerged including Pioneers, Investigators, Experimenters, and Passives. 19% of the respondent base is Pioneers or those organizations who understand and are adopting AI. The study says that “these organizations are on the leading edge of incorporating AI into both their organization’s offerings and internal processes.” Investigators (32%) are organizations that understand AI but are not deploying it beyond the pilot stage. Experimenters (13%) are organizations that are piloting or adopting AI without deep understanding. Passives (36%) are organizations with no adoption or much knowledge of AI.
- Pioneers and Investigators are finding new ways to use AI to create entirely new sources of business value. Pioneers (91%) and Investigators (90%) are much more likely to report that their organization recognizes how AI affects business value than Experimenters (32%) and Passives (23%). One of the most differentiating aspects of the four maturity clusters is understanding the differences and value of investing in high-quality data and advanced AI algorithms. Compared to Passives, Pioneers are 12 times more likely to understand the process for training algorithms and ten times more likely to comprehend the development costs of AI-based products and services.
- Organizations in the Pioneer cluster excel at analytics expertise versus competitors and have exceptional data governance processes in place, further accelerating their AI-driven growth. Pioneers are excellent at change management, citing their senior management’s vision and leadership as a foundational strength in accomplishing their AI-based initiative Early adopter Pioneers are also adept at product development, capable of changing existing products and services to take advantage of new technologies.
- 61% of all organizations interviewed see developing an AI strategy as urgent, yet only 50% have one done today. The research found that regarding company size, the largest companies (those with more than 100K employees) are the most likely to have an AI strategy, but only half (56%) have one. The following graphic compares the percentage of respondents by maturity cluster who say developing a plan for Al is urgent for their organization relative to those that have a strategy in place today.
- 70% of respondents are personally looking forward to delegating the more mundane, repetitive aspects of their jobs to AI. 84% believe employees will need to change their skill sets to excel at delivering AI-based initiatives and strategies. Taking this approach provides career growth and a chance to become more marketable for many whose jobs that are being increasingly automated. Cautious optimism regarding AI’s effects on employment dominates early adopter organizations, not dire fatalism. The bottom line is that AI is providing opportunities for career growth that will only accelerate in the future. Those that seize the chance to learn and earn more will end up having AI removing the mundane tasks from their jobs, leaving more time for the most challenging and rewarding work.
- 93% of global product leaders say that predictive maintenance combined with real-time equipment monitoring enabled by integration is a must-have for factory planning today.
- 75% of global product leaders plan to implement factory of the future initiatives and programs in the next five years or less, starting with Industry 4.0
- 67% of automotive executives expect that new technologies enabled by real-time integration will enable their teams to reach and exceed lean management and continuous improvement goals starting this year and accelerating through 2030.
Boston Consulting Group’s recent article, The Factory of the Future provides insights into a recent global survey the consulting firm conducted of more than 750 manufacturing product leaders from leading companies in three industrial sectors: automotive (which includes suppliers and original equipment manufacturers, or OEMs), engineered products, and process industries. The survey’s objective is to define the vision for the factory of the future in 2030. Determining long-term benefits and the roadmap to implementation are also goals of the study Boston Consulting Group (BCG) and its research partner, the Laboratory for Machine Tools and Production Engineering at RWTH Aachen University, achieved. The Factory of the Future is a vision for how manufacturers should enhance production by making improvements in three dimensions: plant structure, plant digitization, and plant processes.
5 Ways Integration Fuels The Factory Of The Future’s Growth
Real-time integration based on intelligent objects that connect diverse enterprise systems including SAP, Salesforce and others is the foundation that manufacturing companies must adopt to excel in their Factory of the Future efforts. These real-time objects illustrate the future of Application Programmer Interfaces (API). APIs that will fuel and drive the Factory of the Future will enrich each real-time integration points across manufacturing networks. Intelligent Objects pervasively used today are the precursors to the most valuable APIs that will enable Factories of the Future tomorrow. With APIs continually improving and gaining the capability to provide insight and intelligence, the essential role of real-time integration in all factories of the future becomes clear.
The following are the five ways integration is enabling the Factory of the Future today:
- Real-time integration enables the value chains supporting the Factories of the Future to continually accelerate, excel and improve with additional insight that drives future growth strategies. Bringing greater intelligence into each integration point across the value chains supporting the Factories of the Future leads to new technologies delivering greater lean management benefits. Real-time integration will deliver strong benefits in the areas of lean management, predictive maintenance, modular line setups, and the orchestration and collaboration of smart robots.
- The Implementation Roadmap for the Factory of the Future shows how critical real-time integration is to the Factory of the Future’s vision being attained. Multidirectional layouts, modular line setups, sustainable production, the orchestration of smart and collaborative robotics and attainment of big data and analytics plans all are dependent on real-time integration. The following graphic from the study illustrates just how central integration is to the optimizing of plant structure and plant digitization.
- By integrating large-scale enterprise systems including those from SAP, Salesforce and others with legacy, 3rd party and homegrown systems, every area of production quality will improve. The most urgent need global manufacturers have is finding new ways to improve product, process and service quality without raising costs. Improving the quality of these three dimensions makes any manufacturer more trusted and successful in selling next-generation products. By aggregating data using real-time integration so that Big Data and advanced analytics can be used to find new patterns, some of the world’s most well-known manufacturers are excelling on product quality. To produce cylinder heads at its plant in Untertürkheim, Germany, Mercedes-Benz uses predictive analytics to examine more than 600 parameters that influence quality. Mercedes-Benz is an early adopter of using Big Data and advanced analytics to improve quality management and bring high precision to engineering. Bosch has implemented software that analyzes data about its production of fuel injectors in real time. The software monitors process adherence and recognizes trends. It automatically transmits information about deviations to operators, allowing them to improve the process accordingly.
- Real-time integration across and within manufacturing systems enables multi-directional layouts of production workflows. The Audi R8 manufacturing facility in Heilbronn, Germany, does not have a fixed conveyor so the teams there has greater multidirectional flexibility in building customized vehicles. Real-time integration across the Audi factory floor is essential to provide R8 production teams with the specifics of how they can best collaborate and deliver the highest quality vehicles in the shortest amount of time. Real-time integration is enabling driverless transport systems, guided by a laser scanner and radio frequency identification technology in the floor, which moves the car bodies through the assembly process. These systems enable assembly layout changes quickly with no impact on existing production. Enabling real-time integration often involves extensive field mapping between different systems, which is a lengthy and error-prone process. Integration technology provider enosiX has developed a unique, real-time integration technology that obsoletes the need for field mapping and supports bi-directional data updates.
- Enabling the Factory of the Future’s production operations to flex in response to rapidly changing customer requirements is entirely dependent on real-time, reliable integration of production and customer-facing systems. The implications of the study on the future of manufacturing underscore just how critical it is for manufacturers to be agile enough to create entirely new business models while gaining insight and intelligence into how they can continually improve lean manufacturing. When real-time integration unifies a value chain for any manufacturer, their speed, scale and ability to simplify the complex processes required to serve customers turns into a formidable competitive advantage.