More manufacturers are talking the serious talk about digital transformation but walking the walk toward full implementation remains to be seen.
Digital transformation in manufacturing has evolved at a fast pace in recent years. The challenging market situation has increased the need for resilience and flexibility. This has led many companies to accelerate their transformation initiatives, implement digital applications, and increase their investments in advanced technology, says a new report from European ecommerce firm Copperberg and Valtech.
Today, 59%, of manufacturers describe themselves as ambitious, but only 3% give themselves the status of market leader, based on a survey of 300 manufacturing executives. “On the whole, the ambition level has dropped,” the report says. “This might have been caused by the fact that respondents have become more realistic about what being a digital leader really means.”
Budgets for digital transformation also appear to be shrinking. “The years of continuous growth of investment in digital for the vast majority seem to be over,” the report says. For 11% of survey participants, the budget has decreased by as much as 20% while for 39%, the budget has stayed the same. Those who are looking to catch up to their competitors, or get ahead of the curve, continue to increase their budgets. 47% of our respondents have increased their 2023 digital investment budget by up to 20%, compared to 63% in 2022, according to Copperberg and Valtech.
The number of respondents who increased their budgets by more than 20% has dropped from 20% last year to 3% now. For 44% of survey respondents, IT has the biggest say in how this budget is spent, closely followed by marketing (31%) and the sales department (27%). For 17%, finance and after sales/service departments are getting more involved in the process, the report says.
Many manufacturers have worked to align, expand, and consolidate their digital agenda across the organization. By establishing a digital foundation within their infrastructure, “they have created the opportunity to scale up and maximize their digital investments,” the report says. But when asked what statement best describes the structure of their organization’s digital strategies and initiatives, 63% revealed that they are operating with a companywide digital agenda. However, “it has not been implemented throughout the organization and does not yet cover cross-regional or cross-departmental alignment; the organization has varying levels of digital maturity, according to Copperberg and Valtech..