Study reveals key barriers to digital transformation

More than four in five (83%) British manufacturers now recognise digital transformation as a key objective. but face significant barriers according to new research by enterprise information management specialist, OpenText.

The research – commissioned by OpenText and carried out by Sapio Research – provides a snapshot of the current level of digital transformation and Industry 4.0 implementation across the UK manufacturing sector. It also highlights the key impediments facing organisations attempting to implement these technologies to counteract the impact of digital disruption.

Digital transformation today

Encouragingly, 40% of UK manufacturers have already implemented Industry 4.0 initiatives and almost half (47%) are undergoing digital transformation. In fact, digital transformation is now being discussed at board-level in 84% of companies in the British manufacturing industry, while just over a quarter (26%) confirm that implementing digital transformation is a primary business objective for the boardroom.

Strong progress has been made to combat digital disruption with the implementation of digital transformation and Industry 4.0. Yet, while around 70% of UK-based businesses have had plans in place to counteract the impact of digital disruption for at least a year, 79% of organisations say digital disruption is still making an impact on their business. Almost half (47%) describe this impact as ‘major’.

Transforming business operations

Today UK businesses identify the following top three key business benefits of digital transformation: improved decision making (33%), enhanced connectivity (28%) and greater business agility (28%). 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.

While UK manufacturers are making good progress when it comes digital transformation, significant barriers do exist:

  • Growing data volume: analysing and handling the volume of data being generated, and acting upon it, is the most significant challenge (30%).
  • The skills gap: Two in five (40%) respondent find it difficult to recruit people with digital analytics skills compared to more traditional skills, such as design, engineering and maintenance. Additionally, 30% are struggling to recruit analytical decision makers
  • Political instability: Half (50%) believe Brexit is making it harder to justify an investment that is necessary to implement digital transformation.
  • Budget: more than a quarter (28%) find that the levels of investment required cause problems when attempting to adopt a digital-first approach, while almost a third (29%) are held back by an inability to prove ROI.

Thomas Leeson, industry marketing strategist, manufacturing sector, OpenText.
Thomas Leeson, industry marketing strategist, manufacturing sector, OpenText.

Thomas Leeson, industry marketing strategist, manufacturing sector, at OpenText, explained: “Manufacturers in the UK recognise the value of digital transformation, but our research reveals major barriers are still holding them back from fully embracing this approach and turning it into their advantage. Faced with a severe skills gap, uncertainty around Brexit and a daunting quantity of data, many are struggling to successfully implement these processes.

“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.

“Being able to quickly mine and interpret data in order to make fast, informed business decisions will be a challenge for many companies. However, this may well act as a crucial differentiator when it comes to making or breaking new market opportunities through digital transformation. The key to this will be ensuring that information is accessible, anytime and anywhere.

“For this reason, turning to cloud-based analytics solutions can enable organisations to make the most of the vast quantities of data collected through new ‘digital-first’ processes to drive competitive advantage.”

Don’t miss this Friday’s (7th April, 2017) webinar titled: ‘The Human Impact of Industry 4.0‘.

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