Four in five British manufacturers now recognise digital transformation as a key objective but face significant barriers in executing it, new research reveals.
A study of by OpenTech and Sapio Research found that manufacturers are struggling to prove ROI from digital transformation programmes and successfully analyse large volumes of data.
Four in ten UK organisations in the manufacturing sector have already implemented Industry 4.0 initiatives and almost half (47%) are undergoing digital transformation, according to the research.
Digital transformation was being discussed at board-level among 84% of the British manufacturers surveyed, but just a quarter said implementing digital transformation is a primary business objective for the boardroom.
Strong progress has been made to combat digital disruption with digital transformation and Industry 4.0 projects. Yet, while seven in ten UK-based businesses have had plans in place to counteract the impact of digital disruption for at least a year, 79% of organisations said digital disruption is still making an impact on their business. Almost half described this impact as ‘major’.
Transforming business operations
The UK businesses surveyed identified improved decision making (33%), enhanced connectivity (28%) and greater business agility (28%) as the top benefits of digital transformation.
In fact, Industry 4.0 and digital transformation are already changing the way UK organisations operate. Almost two-thirds (62%) have already moved towards digitisation while 60% are now using big data to provide insight.
But while the UK manufacturing sector is making good progress when it comes digital transformation, significant barriers do exist. Three in ten survey respondents pointed to analysing, handling and acting upon data as the most significant challenge in the digital transformation revolution.
Two in five said they find it difficult to recruit people with digital analytics skills compared to more traditional skills, such as design, engineering and maintenance. Three in 10 (30%) said they are struggling to recruit analytical decision makers.
Half of respondents said Brexit is making it harder to justify investment in digital transformation. Three in ten throught the levels of investment required caused problems when attempting to adopt a digital-first approach, and a similar amount said they are held back by an inability to prove ROI.
“Faced with a severe skills gap, uncertainty around Brexit and a daunting quantity of data, many are struggling to successfully implement [digital transformation],” said Thomas Leeson, industry marketing strategist, manufacturing sector, at OpenTech.
“Effective data management and analytics will underpin any digital transformation success. However, given the expected exponential growth in the volume of data gathered, businesses must ensure they are prepared to effectively categorise, manage and interpret this data.”