Survey Results: The State of Digital Transformation

Transformation a function of region and industry

PTC has submitted this article.

Written by David Immerman, Senior Research Analyst at PTC

Accessibility to digital technologies is now widespread, yet some businesses are capitalizing on it at a more rapid pace and with greater success than others. The need for a mature digital program proved critical during COVID-19 where business continuity challenged every manufacturer’s value chain. Nearly all digital leaders (93%) claim digital investments made prior to the pandemic allowed them to be more agile in their response.

Some were likely not digital leaders before the pandemic, but now recognize the importance of it. Some will still have reservations when contemplating the potential complexities and obstacles enterprise-wide digital transformation (DX) strategies can present.  

Because of these complexities inherent to many manufacturers and their surrounding ecosystems, they are at different points of maturity in their digital transformation (DX) timeline.

PTC’s survey of 360 discrete and process manufacturing leaders for its State of Industrial Digital Transformation dove further into this digital adoption maturity trend and found critical nuances across regions and industries.

Below we’ll present data findings on these trends dictating DX maturity based on ‘where you are’ (region) and ‘who you are’ (industry).

Manufacturers Increasingly Reach Digital ‘Tipping Point’

Different regions of the world have dissimilar philosophies on business practices as well as implementing new technologies in everyday practice. To be on the later end of this adoption spectrum isn’t necessarily a criticism. Some companies over-eagerly turned to digital and sunk multi-million-dollar investments into failed projects or never-ending pilots. However, we are reaching a tipping point where the ‘digital leaders’ will soon surpass the ‘digital laggards’: 92% of manufacturers are at some point in their digital journey.

We’ve defined these different stages of maturity across three digital journey stages manufacturers are in:

  • Planning: Forming a business strategy and case internally to start a DX program. Includes the initial evaluation of digital use cases and aligning to top business pain points and the assessment of external partners to support the proposed program. â€‹
  • Piloting: Includes companies running proof of concepts, which aim to demonstrate the feasibility of a digital transformation project. Pilots are a formal test to prove if the project will work in a production environment.   â€‹
  • Rollout:  The actual implementation of one or several digital transformation use cases into production environments, whether it’s across the internal value chain or in customer-facing form. â€‹

Manufacturers are spread across these stages currently with over half still not reaching production. Still the largest single percentage (41%) are manufacturers with a full-scale or enterprise-wide rollout, which supports the DX ‘tipping point’ trend.  

These data findings are from a third-party research survey firm commissioned by PTC and do not illustrate a full representation of PTC’s customer base.

These data findings are from a third-party research survey firm commissioned by PTC and do not illustrate a full representation of PTC’s customer base.

Now that we’ve built this maturity benchmark we’ll delve into the noticeable differences across regions and verticals.  

North American Manufacturers Report High Levels of Digital Project Maturity

Over half (54%) of our North American manufacturing respondents claimed to be in the rollout stage of their DX program. This was considerably higher than the other regions who reported rollout rates of 35% (Europe) and 32% (APAC).

These data findings are from a third-party research survey firm commissioned by PTC and do not illustrate a full representation of PTC’s customer base.

These data findings are from a third-party research survey firm commissioned by PTC and do not illustrate a full representation of PTC’s customer base.

APAC cited the highest proportion of respondents in the piloting stage (44%), while Europe had a near balance across planning (30%), piloting (35%), and rollout (35%). Organizations across the world will move at a pace aligning to their unique project challenges and priorities.

APAC and EU respondents most frequently cited cost-driven goals (asset efficiency, workforce productivity etc.) for their DX programs, whereas North America mentioned customer experience (product quality, customer engagement etc.) DX initiatives by a marginal amount over cost and growth. APAC respondents claimed the highest proportion of Chief Digital Transformation Officers as the leaders of their programs while EU and NA both cited CEOs.

Although comprised of short intervals of measurable sprints of success and immediate short-term value, leveraging digital truly is a marathon to reshape your company’s position in the competitive landscape over the next decade.

Industrial Discrete Product Manufacturers Lead Digital Maturity

Digital transformation initiatives and correlating goals greatly differ on your organization’s unique characteristics and strategy. This also applies to specific industries- such as automotive who nearly half of (49%) prioritize cost-oriented DX program goals such as increasing asset efficiency in production facilities or reducing service costs in dealerships around the world. Contrast this with 42% of Chemicals & Pharmaceuticals electing for growth-driven initiatives including reducing time to market and introducing new products.

On the DX program maturity spectrum, there are noticeable differences between the seven industries PTC analyzed. Manufacturers of industrial products (heavy-equipment, factory assets etc.) have the highest portion of respondents in the rollout phase (57%) with other discrete manufacturers (medical devices, durable goods, apparel) reporting the second highest rollout rates (44%).

These data findings are from a third-party research survey firm commissioned by PTC and do not illustrate a full representation of PTC’s customer base.

These data findings are from a third-party research survey firm commissioned by PTC and do not illustrate a full representation of PTC’s customer base.

Successful DX initiatives in the industrial product category range from battery and equipment providers leveraging PLM and SaaS to reduce time to market and improve quality, wood processing system manufacturers using IIoT to bolster the OEE of their own operations as well as their customers, or an air and gas handling system provider tapping augmented reality for knowledge transfer across their industrial workforce, among many others.

In our other discrete manufacturers segment, medical device manufacturers turned to their DX programs in the wake of the COVID-19 crisis to ensure the uptime of their deployed healthcare products in mission-critical customer operators, typically hospitals.

The program goals, projects, and value achieved ranged across these industry segments, attributing to the broad applicability of DX.

It Isn’t Too Late to Digitally Transform

Some of these data points on DX maturity may be intimidating to some who are in the nascent stages of developing a digital program. The good news is it isn’t too late to rejuvenate a digital strategy and scale use cases out of planning, proof-of-concepts, and piloting stages.

Where you are on this DX maturity spectrum will likely dictate your pressing challenges and strategic priorities.

You can see the full report here: State of Industrial Digital Transformation.