Manufacturers know digital transformation is essential, but are falling behind due to ‘option paralysis’ and unable to capitalise on advancements in their industry.

 

This is according to new research from IFS, a leading technology provider of enterprise cloud and industrial AI software. 

 

The study surveyed 815 global manufacturing leaders and found that while they all admit their businesses cannot survive without the right technology, fewer than 10% qualify as digital leaders. 

 

A striking 65% of respondents labeled themselves as ‘laggards,’ falling dangerously behind and stalled at the early stages of digital transformation with no firm plans in place.

 

The clock is ticking on resilience

The IFS research sounds an alarm: 82% of manufacturers say their business won’t survive more than 1-3 years without a stronger commitment to technology. The urgency is clear - market turbulence, supply chain disruptions, and the looming impact of climate change make digital transformation a necessity for survival, not a choice.

 

By contrast, digital leaders are confident they can weather future storms with over a quarter (28%) believing they can last up to five years without new investments. And while a promising 39% are actively developing ESG initiatives, most manufacturers (71%) lack a credible ESG strategy, even though 28% identify climate change as a top concern. 

 

‘Option Paralysis’ hindering the industry's future

The research blames a debilitating state of 'option paralysis.' When asked to prioritise technologies, more than 80% of respondents listed every option as essential, underscoring the confusion that prevents decisive action.

 

The ‘option paralysis’ experienced by manufacturers is exacerbated by the fact that each job level is pulling in a different direction. Almost all (94%) C-suite executives believe that cloud computing is the most important technology to digital transformation efforts, however, operations personnel saw digital twins (85%) and AI (84%) as their priority technologies. Those at the VP level were most likely to believe that IoT (81%) is the most important technology to focus digital transformation efforts on. This indecisiveness is widening the gap between digital leaders and laggards.

 

Digital leaders – those at the forefront – are more than just ahead; they are winning. They invest 45% of their budget on digital transformation, driven by clear strategies and ROI-focused investments. Meanwhile, laggards continue to fall deeper into the digital abyss, paralysed by too many choices leading to the inability to evaluate new technologies.

 

A fifth of respondents said that change management (22%) and IT complexity (21%) are the major barriers. Without overcoming these hurdles, manufacturers are setting themselves up for failure.

 

Building a brighter future

Despite the challenges of embarking on digital transformation projects, manufacturers remain optimistic about their future prospects with the benefit of next-generation tools. When looking at supply chains, for example, almost all (98%) of manufacturers are considering geographic strategies to optimise supply chain resilience, opting for closer or politically stable sourcing destinations. In this regard, digital leaders use advanced strategies, such as advanced scenario simulation, while laggards rely on stand-alone risk assessment tools.

 

On the topic of carbon footprints, manufacturers are particularly hopeful about the impact of ESG on their businesses. With the sentiment shifting from ESG being just a compliance-driven activity to one that can drive significant positive changes in lead time and quality while enabling new business models, like circularity.

 

Guiding manufacturers from digital paralysis to leadership

“The manufacturing industry is at a crossroads. Many understand the urgency but remain immobilised by indecision, waiting for proven results or guidance from a trusted partner before committing to action,” said Maggie Slowik, Industry Director, Manufacturing at IFS. “The longer manufacturers delay, the further they fall behind. In today’s volatile market, resilience and digital maturity aren’t just advantages - they’re essential for survival.”

 

“At IFS, we provide more than just technology; through our Industrial AI strategy we offer manufacturers the roadmap to becoming a digital leader. Manufacturers need to take decisive action now, or risk being left behind in a rapidly evolving market. Those that lead in digital transformation will emerge stronger, more agile, and better equipped to navigate future disruptions.”--TradeArabia News Service