A new report from ISG shows U.S. manufacturers are leading the global charge in adopting digital engineering practices, and the reasons for this trend.
The speed of new product introductions is on of several trends driving manufacturers to adopt digital engineering processes, according to a new report from Stamford Conn.-based technology research and advisory firm ISG.
The 2023 ISG Provider Lens Digital Engineering Services report says a growing number of organizations, especially in the U.S., are shifting away from traditional hardware-focused engineering approaches as digital user experiences become more central to products and services. The report describes Digital engineering as processes that encompass critical aspects, including quality planning, design for quality, process improvement, quality control, verification and assurance.
“Much of what enterprises are selling today is defined by software and connectivity,” said Gaurav Gupta, partner and global head, ISG Digital Engineering. “Digital engineering is essential to creating maximum value and differentiation.”
As an example, Gupta referenced how vehicles are now judged as much for the information and entertainment experiences they offer as for traditional driving performance. Indeed, automakers stand out by designing, delivering and supporting outstanding digital experiences.
However, this trend is pervasive throughout the manufacturing sector, from no-code/ low-code programming, monitoring and control of manufacturing equipment to standard industrial drives with embedded digital twins, it’s clear that the digital experience is guiding development and engineering across the spectrum.
The report says digital twin technology is powering digital engineering adoption in a number of ways: it helps in the accurate design and testing of products and systems, provides real-time data on physical asset performance, improves maintenance, refines data analysis and reduces downtime. Cloud technology providers such as AWS also play a key role in promoting engineering in the digital space by providing industry-vertical solutions. Furthermore, the best practices followed by the aging workforce in the U.S. can be identified and institutionalized through a digital UX on workstations and mobile devices.
According to the report, the benefits of adopting digital engineering services include:
Reusable models – Digital twin models can be saved and reused after suitable modification in the future.
Broad suite of industrial applications – These applications range from a plant to an entire company, which can be quickly designed and implemented.
Proactive maintenance – made possible by embedded IoT devices, which generate real-time sensor data.
User and CX monitoring – User and customer engagement can be better tracked using mobility solutions to optimize costs.
U.S. Manufacturers Lead the Way
ISG says this transition is global but is particularly advanced in the U.S. The report says more than half of US manufacturers have already begun to leverage artificial intelligence and Machine learning, Industry 4.0, IoT and cloud computing. About 40 percent of U.S. manufacturing companies have not yet adopted digital engineering services, which pivots around innovation by validating concepts, observations and analytics.
U.S. enterprises are seeking scalable, cloud-based digital engineering platforms that enable efficient development of applications, user experiences and ongoing operations, the report says. While elements of these platforms can be applied across multiple industries, leading providers are tailoring them to the needs of specific sectors and clients.
“Digital engineering requires a long-term strategy,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Service providers are demonstrating solid business cases for making it a sustained practice.”
Quality engineering (QE) is named in the report as a discipline gaining prominence, as it ensures standardized outcomes at every solution development point. The systematic approach, used by manufacturers to ensure the quality of products, services or processes throughout their lifecycle, involves the application of engineering principles, methodologies and tools to design, develop, test and maintain systems that meet or exceed customer expectations and regulatory requirements. Quality engineering aims to minimize defects, reduce variability and optimize performance while maintaining cost-effectiveness and efficiency.
Challenges to Adopting Digital Engineering
A new perspective: The first challenge identified by ISG is that manufacturers need to look at product development from the perspective of digital design. From ideating products and targeting expectations to designing, building and prototype testing. Customers’ expectations have evolved. Physical performance is a given; digital product design focuses on the customer experience layer.
Speed of innovation: Gone are the days when a company releases one new product per year. Digital design is driven by continual innovation. Clients expect to be fed new ideas, which makes disruptive innovation the new normal, while prototyping, testing and release cycles are faster.
Define what success looks like: Most enterprises are more than halfway through their digital transformation. While digital engineering of both products and processes results in nearly infinite innovation, manufacturers must learn how to sustain this transformation in a cost-effective way and find a strategic business case to justify the time and expense.
Moving Forward
As your digital transformation matures, ISG recommends manufacturers focus on platform system integration rather than point solutions. Long-term contracts mean you have long-term strategic relationships, which incentivizes providers to invest in their own long-term capabilities to provide strategic digital competencies for customers. This digital maturity curve between the demand and supply capabilities can be the difference maker for enterprises to take the next step toward sustainable digital high performance.
The 2023 ISG Provider Lens Digital Engineering Services report for the U.S. evaluates the capabilities of 34 providers across four quadrants: Design & Development (Product, Services and Experiences), Integrated Customer/User Engagement, Platforms and Application Services, and Intelligent Operations. The report names Accenture, Capgemini, Cognizant, GlobalLogic, HCLTech, Infosys, LTTS, TCS and Wipro as leaders in all four quadrants. It names Hexaware and LTIMindtree as leaders in three quadrants each and Harman DTS and Persistent Systems as leaders in two quadrants each. Cyient, IBM and Tech Mahindra are named as leaders in one quadrant each. Happiest Minds is named as a Rising Star—a company with a “promising portfolio” and “high future potential” by ISG’s definition—in three quadrants. Persistent Systems is named as a Rising Star in two quadrants, and Harman DTS and Infinite Computer Solutions are named as Rising Stars in one quadrant each.
The full 2023 report for the U.S. is available to ISG subscribers or for a fee from the webpage.
