Manufacturing industry lags behind as 32% of mid-tier companies hold back on digital

Mid-tier organisations are holding back on digital development until they can be more certain the technology is worth investing in.

Mid-tier organisations are holding back on digital development until they can be more certain the technology is worth investing in, found KPMG.

The professional services firm paired with research firm YouGov and surveyed mid-market companies and found that 32% are reluctant to invest in digital technology until they have seen it benefits organisations.

Although a third of UK organisations are digitally investing, only 14% of mid-tier organisations consider themselves digital leaders.

Nathan Beaver, customer and growth director at KPMG Enterprise, explained that this will lead to a “two-track Digital Economy” whereby certain markets will be more digitally advanced and others will be left behind.

“The likes of telcos, media marketing advertising and to a certain extent the financial services sector - those are people who either because the nature of the nature of the market or the sector they operate in do see a clear changing way in which the way the market is adopting and has made great strides to adapt and adopt any digital change.” said Beaver.

But he pointed out that other industries such as manufacturing and construction do not see what advantages digital adoption might have for them, leaving them falling behind.

“The consumer has now got an expectation in terms of the level of the service and the way in which they can engage with a company through digital channels because of what the leaders are doing in this space and if they don’t receive that from other sectors they begin to then become disillusioned or lose advocacy for that particular brand.” said Beaver.

The big problem for those who have found themselves left behind is the new market-entrants who have a different attitude to digital and will quickly adapt to what the market needs.

“These challengers can quickly and easily pick up that customer base that is losing advocacy for a brand that isn’t able to provide that same degree of service and that same degree of interaction.” Beaver explained.

Many firms (20%) are implementing digital for customer interaction, but for industries such as manufacturing in many cases the reason they are not adopting digital is because they think it is a purely customer-focussed practice designed to make it easier to interact with customers, and do not understand how it will help them internally.

Almost 20% of those asked felt the reason digital had not yet been implemented was because of lack of strategy and vision across the organisation.

“What they’re not thinking about, and where I think they’re missing out on an opportunity is the enablement of the organisation through digital, so how they’re using technology and detail means to enable their workforce and support their business.” Beaver explained.

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How Italian manufacturers Bticino and Raccorderie Metalliche are using BI to be more efficient and agile.

UK manufacturers spent £130m on outsourcing services in the first half of this year, with a big rise in functions being outsourced for the first time.


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