By Stu Johnson, vice president of product marketing at Rootstock Software
At the start of the year, we had this idea…what if we could peek into the minds of leading manufacturers to find out what’s keeping them up at night? What if we could learn about their top concerns, key challenges, perspectives on trends, and key tech priorities?
If we understood these factors, we’d be better equipped to assist them with their digital-transformation (DX) journeys. So we decided to enlist a leading market-research firm to help us develop a survey of manufacturers, reaching various segments and levels of leadership among business and IT managers. The survey questions were designed to delve into their psyches, as we hoped to find out what they saw as risks, what they wanted to focus on over the short- and long-term, and what they hoped to achieve in terms of system modernization.
Now, the results are in, and the findings are quite surprising.
What we didn’t realize at the time is this research would also provide manufacturers with valuable benchmarks against which to compare their own business and IT strategies. As a result, we’re offering to industry leaders the IDC InfoBrief, “2023 State of Manufacturing Technology Survey” so they can scrutinize the results and glean their own insights from peers.
In our own assessment of responses, we uncovered these four high-level findings:
1. You can’t save your way to growth. While many manufacturers have been saying they want to protect their profit margins, the survey shows they’re savvy enough to understand they can’t just solely focus on savings at the expense of strategic IT initiatives. In fact, more than three-quarters of manufacturers responding to the survey have plans to boost their software spending over the next 12 months, with more than one-third (37%) planning on double-digit increases.
Investments will focus on top-of-mind initiatives, such as improving operational performance, maximizing the value of data, and enabling collaboration across their enterprise. Contributing to these objectives, about two-thirds (63%) of respondents foresee needing to upgrade their ERP solutions.
2. Digital transformation is key to responding to ongoing market volatility. Not surprisingly, one of the biggest fears is continued uncertainty around supply chains. Nearly twice as many respondents said they were concerned about keeping pace with increased orders over those worried about diminishing demand. Being able to respond to unforeseen disruptions is paramount to them. And toward that end, manufacturers want greater visibility outside their four walls, so they’re connected to early supply/demand signals, and they’re able to monitor supplier performance. In addition, they want to engage in digital initiatives that can strengthen their ability to collaborate with suppliers when disruptions occur and to digitally source alternative and local suppliers for greater resiliency.
3. Data: the oil that needs refinement. British mathematician Clive Humby coined the expression “data is the new oil” and said that, like oil, data needs refinement to be turned into something useful. This notion explains the reasoning behind some of our survey results. When manufacturers were asked what they feared most if they didn’t progress further on their DX path, their biggest concern was the disconnection that would result from ongoing data silos. As a result, many are prioritizing cloud applications and cloud ecosystems on their DX initiative lists; they view these projects as the means to centralize data and extract the value from their data oil fields. On the horizon, AI, machine learning, analytics, and IoT are also technologies of interest, which will help manufacturers further refine for insights.
4. Cloud fears are unfounded. Going forward, cloud may be the proverbial air that manufacturers breathe. The survey shows that most tech-savvy manufacturers are already on the cloud, as they recognize the value and competitive benefits cloud-based software and cloud platforms provide. A few manufacturers still expressed concerns over moving to the cloud, but those fears were shown to be unfounded. This is because many manufacturers that had already transitioned to the cloud had experienced benefits—such as security, centralizing and integrating infrastructure, and the ability to customize and adapt—which were the exact factors that slow-to-adopt respondents feared would be jeopardized in the cloud.
Insights for future success
The manufacturing tech environment is evolving faster than ever before. Manufacturers have encountered many challenges along the way to becoming resilient, but what’s clear is those focused on leveraging the right software and technologies in their digital-transformation journeys will be better equipped to address and respond to future disruptions. And—spoiler alert—there will be more.
Cloud-based solutions and platforms are standing out as ways to help build that resilient infrastructure so they can thrive in the face of ever-changing market conditions. Since some manufacturers may lack the digital competencies to transform, they may want to lean on solution providers and consultants for added technological expertise.
