What are the major obstacles industrial manufacturers face in implementing digital initiatives?

October 17, 2017

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By Bobby Bono

The primary barrier to implementing digital initiatives is a lack of properly skilled teams, which was cited by 26% of the industrial manufacturing respondents in our latest Digital IQ® study. Other key barriers (each cited by 22% of industrial manufacturing respondents) to achieving expected results from current digital technology investments include ineffective project management, inflexible or slow processes, and poor integration of new and existing technologies. Often in our work with industrial manufacturers, we find companies are encumbered with outmoded data gathering and analytics systems, which increase the difficulty of integrating new digital technologies with legacy systems.

Looking ahead, 49% of industrial manufacturing leaders say the biggest emerging barrier to achieving results from digital initiatives is outdated technologies. Executives also expressed concern about the lack of integration of new and existing technologies and data (41%) and the lack of properly skilled teams to manage the adoption of new technologies (38%).

Both current and future concerns about digital technologies stem, in large part, from inadequate investment and lack of skilled talent. Unless investment levels pick up, manufacturers will be left with outdated technologies – the very issue they say is emerging as the top barrier. Investment is also needed to improve data-gathering and analytic systems, so they can be integrated with newer digital technologies.

Obtaining skilled labor also requires investment. With so many industries vying for similar talent, it helps to stand out from the crowd. Better salaries and working conditions undoubtedly play a role in attracting and retaining talent. But we can’t discount the need to create training programs that tailor skill development to organizational needs and provide the workforce with the skills necessary to use new digital tools. Also, companies may need to broaden the ways they search for talent, including forging closer ties to tech companies, start-ups, and university research labs.

There are a number of additional measures industrial manufacturers could take to improve their adoption of new technologies:

  • Establish teams of employees dedicated to digital innovation, and have those teams work collaboratively with other groups throughout the organization. Currently, only 55% of study respondents indicate they have dedicated innovation teams. Teams should include a cross-section of specialists who are in close contact so they can freely share ideas.
  • Actively engage with external sources to gather new ideas for applying emerging technologies. Only 58% of industrial manufacturers say they have already established these ties. This could include university relationships, accelerators and incubators, and crowd funding, just to name a few.
  • Create an environment conducive to learning and collaboration. This may require organizational and cultural changes that formalize responses to emerging technology, while giving employees more freedom to contribute and implement ideas.
  • Teach company leaders about the benefits of digital technology so they can understand how it can help or disrupt the business, including its effects on employees and customers.

The current skills shortfall noted by many survey respondents may reflect an ongoing and underlying problem that goes beyond the growing pains of digital adoption. But it’s only through its employees and customers that companies can reap the full value of their digital investments and create a culture that supports emerging technologies. And we know the human component will only become more critically important as emerging technologies define the next decade of digital and fundamentally change the way we work. The good news is that, unlike so many other aspects of technological change, companies have the power to shape the human experience, which will, in turn, drive innovation during a time of constant change.

 

©2017 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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