India's growing manufacturing industry needs to balance its digital investment for revenue growth and improving the operational efficiencies, said a report. “Manufacturing Industry in India are keen to invest in digital technologies but are struggling to derive tangible business benefits due to an imbalanced approach to digital investments,” said a report from technology consulting firm Accenture.
Citing survey, report said 93 per cent of the executives, who represent 29 manufacturing and production companies in India with an annual turnover of at least $1 billion want to leverage digital for growth, with 76 per cent intending to use digital to create new, experience-driven revenue opportunities. However, only 31 per cent plan to use digital to drive greater operational efficiencies. The report said this lead to missing out on bottom-line improvements.
“There appears to be a singular focus on revenue growth, with businesses neglecting an important requirement of the digital era: the transformation of operations to unlock trapped value,” said Anindya Basu, geographic unit and country senior managing director – Accenture in India.
“Businesses in India must place equal emphasis on using digital to drive efficiencies at the heart of the business and using the freed-up funds to drive strategic investments in new products, customer experiences and business models that create long-term value,” Basu said.
Accenture claimed that it research has found that industrial equipment companies globally could reduce their total cost per employee by almost 20 per cent and increase their market capitalisation by nearly 25 per cent if they combine technologies such as autonomous robots, artificial intelligence, blockchain, big data and 3D-printing.
Accenture said that Indian manufacturers have been struggling to achieve globally competitive scale and productivity. While the industrial sector in India has grown 6 per cent annually since 2011, to more than $700 billion in 2016, the value addition per employee is one of the lowest in the world, at only $6,000.