We ask experts for their insight on how digital leaders can utilise Digital Transformation to help make optimised decisions.
The manufacturing industry faces a critical turning point as new research from IFS, a leading technology provider of enterprise cloud and industrial AI software, revealed a troubling trend: manufacturers know Digital Transformation is essential, but are falling behind due to ‘option paralysis’ and unable to capitalise on advancements in their industry.
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 labelled 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 one-to-three 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.
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.”
Frederik Janssen, Head of IT, Siemens Digital Industries
Digital Transformation is a complex journey, and one of the most critical lessons I’ve learned is the importance of focus. The sheer breadth of opportunities – from AI to Digital Twins to industrial IoT – can easily lead companies to spread their investments and resources too thin. Without a clear focus, many initiatives are started, but few are successfully completed or scaled. To ensure success, manufacturers must strategically prioritise their efforts and concentrate on what delivers the most value.
Start with value and focus on collaboration across IT and OT
Digital Transformation isn’t just about implementing new technologies – it’s about transforming the way we work across the entire value chain. At Siemens, we focus on aligning IT and OT to drive real business impact. For example, our Xcelerator platform enables seamless integration of IT and OT systems, helping manufacturers unlock productivity gains, ensure quality and improve sustainability. A robust and future-oriented enterprise architecture ensures that these solutions are scalable and adaptable to evolving business needs. By working together, IT and OT can deliver scalable, cross-functional solutions that address today’s challenges while laying the groundwork for future innovations.
Build on strengths and scale what works
One of the keys to overcoming option paralysis is building on proven successes. Manufacturers don’t need to reinvent the wheel for every facility or process. At Siemens, we’ve scaled AI-powered predictive maintenance solutions from pilot projects to global operations, demonstrating how incremental improvements can have a compounding impact. By starting with what works and scaling intelligently, companies can achieve measurable progress without losing sight of their long-term vision. By integrating these successes into a modular and flexible architecture like Xcelerator, manufacturers can achieve measurable progress without losing sight of their long-term vision.
Empower people with a clear vision
Digital Transformation is not just a technical challenge – it’s a cultural one. A strong, shared vision is the foundation for success, helping employees understand the ‘why’ behind change. At Siemens, we empower people through targeted change management initiatives, ensuring that employees are equipped to embrace new technologies and processes. Effective communication is critical to sustaining momentum, aligning everyone around shared goals and turning vision into action.
To accelerate Digital Transformation, manufacturers need to focus their efforts, leverage collaboration across IT and OT, and scale proven solutions through platforms and enterprise architecture. By empowering their workforce and prioritising alignment, they can drive meaningful progress today and multiply that success tomorrow.
Anthony Sayers, Edge AI and IoT Ambassador, EMEA Lead Solution Consultant, Lenovo
Digital Transformation presents manufacturers with unparalleled opportunities but can lead to option paralysis, where the vast array of technological choices hampers progress. To move forward, manufacturers need a focused strategy centred on clear goals, scalable technologies and measurable outcomes. The first step is aligning stakeholders across operational technologies (OT) and IT, breaking down silos that often hinder collaboration. Establishing a unified vision based on key business priorities, such as efficiency, sustainability and customer-centricity, sets the stage for meaningful transformation.
Edge Computing and IoT technologies are pivotal in this journey. By processing data locally, Edge Computing facilitates real-time decision-making and predictive maintenance. It also enables manufacturers to act swiftly while minimising latency and dependency on cloud connectivity. Pilot projects, such as retrofitting sensors on production lines or integrating cameras into quality control processes, can deliver quick wins, demonstrating value and building momentum for broader implementation. These technologies not only enhance uptime but also reduce costs and improve equipment longevity, making them ideal for achieving rapid returns on investment.
Smart business models like ‘Manufacturing-as-a-Service’ also play a key role in overcoming traditional barriers. This approach utilises connected, adaptive factories powered by IoT and AI, allowing manufacturers to switch production lines and respond to market demands with unprecedented agility. Such flexibility reduces upfront capital requirements, fosters collaborative innovation and expands opportunities for smaller players to compete in the global market.
Advanced tools like Digital Twins amplify these benefits by simulating production scenarios, enabling managers to test decisions without disrupting operations. Coupled with AI-driven automation, these tools optimise processes, enhance worker safety and reduce inefficiencies. However, addressing cultural resistance is just as critical as adopting the technology itself. Upskilling employees and fostering a culture of innovation will ensure the workforce adapts to change and contributes to long-term success.
By adopting a phased approach that prioritises integration, scalability and clear ROI, manufacturers can move beyond option paralysis and unlock the full potential of Digital Transformation. Technologies like Edge Computing and IoT are not just enablers; they are catalysts for reimagining manufacturing, making operations smarter, more sustainable and agile enough to thrive in an ever-changing landscape.
Nicolas Rousseau, Intelligent Products and Services Group Offer Leader, Chief Digital & Manufacturing Officer, Capgemini Engineering
Manufacturers today face a unique challenge: a wealth of technological options that promise transformative outcomes but often lead to a state of ‘option paralysis’. This hesitation arises from a mix of uncertainties – ranging from capability gaps and scalability concerns to fears of disrupting stable operations. Yet, inaction is becoming less of an option in industries where agility and innovation dictate survival. The solution lies in adopting a focused, holistic strategy that addresses these concerns while enabling decisive progress.
At the heart of overcoming paralysis is the need for clarity of purpose. Digital Transformation cannot succeed without a vision tied directly to business goals. Leaders must prioritise outcomes that deliver measurable value, such as improving operational efficiency, minimising downtime, enhancing employees’ experiences and ideally reducing an existing, well-identified cost. By aligning technology investments with these priorities, organisations can cut through the noise and focus on what matters most.
Fear of instability often compounds hesitation, particularly in industries where reliability is non-negotiable. This can be addressed by adopting a ‘start small, scale fast’ approach. Pilot projects – such as deploying predictive maintenance tools or optimising supply chains – offer a low-risk path to demonstrate value and build momentum. Overcoming the ‘proof of concept syndrome’, specific fit-to-purpose labs (usually third-party lab used as-a-service) can enable the enterprise-wide scaling, by enabling specific testing and modelling of each environment with no risk on production.
However, transformation is not just a technical challenge – it’s a cultural one. Overcoming silos within the organisation is essential. IT, operations and business leaders must work together to create cohesive strategies supported by shared KPIs. Collaboration fosters alignment, ensuring every function pulls in the same direction. At the same time, the workforce must be the cornerstone of this journey. Automation should empower employees and effective change management – rooted in communication and training – can ease adoption and build trust.
Data is at the centre of transformation. Investments in robust, real-time analytics platforms enable manufacturers to consolidate information from fragmented systems, turning raw data into actionable, impactful insights. These insights not only guide strategic orientations but also enable tangible decisions on the field, at the pace of operations.
Finally, manufacturers should really embrace collaboration with ecosystem partners. The complexity of modern technologies like AI, IoT and Digital Twins can be daunting, but trusted partnerships provide access to expertise, frameworks and tools that accelerate time-to-value.
Digital Transformation is both a challenge and an opportunity. By addressing the root causes of option paralysis and committing to clarity, collaboration and agility, manufacturers can move beyond indecision and drive meaningful, sustainable change.
Andy Coussins, Head of International, Epicor
In today’s fast-paced digital landscape, manufacturers often face option paralysis when it comes to Digital Transformation.To overcome option paralysis and accelerate Digital Transformation, manufacturers need clear, deliberate strategies that balance innovation with practical implementation. The key lies in identifying where technology can add real value and taking targeted steps to move forward.
One effective approach is to start small and scale gradually. For instance, pilot projects offer a low-risk way to test innovations like real-time data analysis or AI-driven automation. These early wins provide measurable outcomes, reducing risk and helping to build organisational confidence in adopting larger-scale Digital Transformation initiatives.
Another essential strategy is embracing practical human-AI collaboration. Advanced tools, such as AI-powered ERP systems, simplify complex processes, allowing workers to focus on creative problem-solving and strategic decisions. By taking on repetitive tasks, AI acts as a partner rather than a replacement, enabling manufacturers to get the best from their teams while driving efficiency.
When embracing human-AI collaboration, it’s important to make sure your workers are fully onboard with the end goal and that tools are framed as problem-solvers for day-to-day challenges and empowering them to spend more time on high value tasks.
Forming cross-functional, collaborative teams ensure AI initiatives align with business objectives, clear goals and KPIs, as well as people and processes. These teams should comprise of domain experts, AI specialists, IT professionals and shop floor workers. This collaborative mindset helps employees see technology as a partner, reducing any hesitation in transformation efforts.
And finally, once a strategy or tool is proved to be successful, it should be scaled rapidly to maintain momentum and avoid stalling progress internally. Quick wins inspire confidence across teams and encourages the acceleration of digital transformation initiatives.
By focusing on practical applications, manufacturers can move past indecision, accelerate progress, and position themselves for long-term success.
