Todd Pruzan, HBR

Welcome to the HBR Video Quick Take. I’m Todd Pruzan, senior editor for research and special projects at Harvard Business Review. Accenture, a global professional services company with leading capabilities in digital cloud and security, recently partnered with Bosch, a German multinational engineering and technology company, on Bosch’s Digital Fluency Program, to deliver a sustainable digital transformation. Today, I’m speaking with Manish Chandra, Managing Director of Strategy and Consulting, the Supply Chain and Operations Lead in India, and Zero-Based Transformation Lead for Growth Markets, to talk about Accenture’s role in Bosch’s Digital Fluency Program and the areas where digital can deliver sustainable value for automotive and industrial companies. Manish, thank you so much for being with us today.

Manish Chandra, Accenture

It’s my pleasure.

Todd Pruzan, HBR

Manish, Accenture recently led a digital transformation study across industries and geographic regions. What were the key insights from that study?

Manish Chandra, Accenture

We covered close to 900 companies across geographies, and what we found was that the overall digital maturity has moved from 39% to 48% over the last two years, which is pre-Covid and post-Covid. However, there has been a significant bi-polarization between the leaders and the laggards. While the leaders have taken advantage of the crisis and significantly improved their maturity index, many companies have been struggling to scale up and move beyond their original score.

The auto, auto ancillary, and aerospace and defense industries came at the top in terms of the industry segments. What are these leaders really doing differently? First, they’ve set up a clear North Star for digital transformation. They have delivered 3x improvements in terms of performance, vis-à-vis the laggards, in terms of three key indicators, which are resilience, agility, and sustainability in terms of driving value through digital. They have been able to create significant revenues from digital services—really move from products to services to selling outcomes. They’ve used technologies like digital twins, to build simulation and scenario planning capability so that they can drive resilience in their operations.

They’ve also monitored the ESG performance of their tier n suppliers—not just tier I or tier II, but the tier III suppliers—so that they can drive sustainability. They’ve also created an agile organization which can flex with disruption, truly building capabilities of remote expertise and design-anywhere capability. But above all, they are focused on digital fluency. They’ve really focused on the people element, and not just the technology element, of digital transformation, really creating a digital mindset in the organization and building the capability of their people to drive this transformation and setting digital fluency as a foundation for successful transformation.

Todd Pruzan, HBR

Fascinating. Thank you, thank you. Manish, how critical are digital fluency and re-skilling in delivering a sustainable digital transformation, and what was Accenture’s role in the Digital Fluency Program at Bosch?

Manish Chandra, Accenture

See, our research indicates that only 22% of the companies have achieved targeted returns out of their digital transformation journey. While companies make a huge investment in technology, one of the key reasons why they are not able to get the complete ROI of their investment is because they miss out on the people, or the human element, which is key to success in the digital transformation journey. Bosch, on the other hand, really gets the people at the center of the digital transformation journey.

They worked with us to enhance the digital fluency of close to 4,000 people across functions and created 120 digital pioneers who are going to spearhead the digital transformation journey in the future. We partnered with Bosch to accelerate this journey and co-create customized learning journeys for every function across the three management levels. We drove online training through leveraging Accenture Academy. 90+ courses from Accenture Academy were curated to drive online learning of these 4,000 people.

We drove subject matter expert sessions, where we got the global subject matter experts from across Accenture to really run these sessions for each of the functions. We drove about 40+ live demos showcasing digital in action, and brought in startups and alliance partners to run deep dive sessions. But more importantly, we drove learning by doing through action-learning projects. We selected about 150 action-learning projects, of which 15 were finally selected and undertaken during this journey. And these 15 action-learning projects not only helped in capability-building but also drove 3x ROI and created huge business value for Bosch.

Todd Pruzan, HBR

Well, that’s really interesting. Manish, what were the key challenges and success factors for such a large-scale program of 4,000 employees across functions? And what did the program achieve?

Manish Chandra, Accenture

Trust me, this was a really challenging program, because it was done in the peak of Covid. And as a result, it was run fully virtually in an online mode. The reason we were successful are that we developed very customized and curated content for every function at every level, not just generic training. Additionally, we conducted art-of-the-possible workshops for every function. And based on those art-of-the-possible workshops, we created these customized learning journeys, as well as selected which action-learning projects are going to deliver value for that function and help the function reach the North Star in terms of digital transformation.

In addition, we also had a dedicated program management team, both from Accenture and Bosch. We identified functional sponsors from each function from Bosch’s side, who took ownership of driving the digital transformation in that function. There was absolute top management commitment. We had a steering committee with the Bosch top management completely involved in the exercise.

If you ask me one thing which was most successful, was the communication—communication about the strategic importance of the program to the larger organization, both in terms of benefits to the organization as well as benefit to the individual, because individuals could really understand that this program is not only helping the organization but also helping them enhance their capability and improve their capability, and taking it to the next level. Change management was of significant importance. Top management ran multiple town halls and created an in-house microsite, published multiple newsletters, mailers, etc. This communication was paramount in changing the mindset of the workforce, ensuring that people not only learned about digital and analytics as a whole but also get trained on Bosch tools. These methods helped ensure the adoption and enhancement of these tools, and that we received real value from the program.

Todd Pruzan, HBR

Great. Thank you, thank you. Manish, what are some areas where digital can deliver sustainable value for automotive and industrial companies?

Manish Chandra, Accenture

While there are many areas of delivering sustainable value, a few examples that come to mind are the challenges we are facing in terms of supply chain disruption. Auto companies should focus on investing in supply chain planning, supply chain simulation, and scenario planning capabilities to drive supply chain resilience. In addition, analytics can drive huge value in the area of sourcing and procurement, as that is about 60%-70% of the costs, manufacturing and automation in the manufacturing area, sales and marketing, because that’s where you can drive revenue enhancement using analytics, as well as helping companies move from products to services to selling outcomes, which is really selling digital services and not just product in itself. I think those are the areas that can drive key value. And I would say, in addition to investments in digital, digital fluency can play a very, very critical role in driving sustainable transformation.

Todd Pruzan, HBR

Manish, this has been a great discussion. Thank you so much for being with us today.

Manish Chandra, Accenture

Thanks a lot. It’s been my pleasure.

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