A few weeks ago I shared our insights on the 5 manufacturing trends driving the need for an industry cloud.
However, many have reached out to me to say there’s an even more compelling reason to accelerate digitization of manufacturing data, and digitalization of manufacturing processes.
Manufacturing’s growing digital divide
According to research conducted by IDC Manufacturing Insights, McKinsey, and many others, the pandemic accelerated the ‘digital divide’, widening the gap between the leaders who had already embarked on their digital transformation journeys, and those that were less prepared to deal with business continuity and cost optimization challenges during the supply chain disruptions of 2019 and 2020.
First the good news. According to IDC’s COVID-19 IT Impact Survey, from a high of 17 percent in May of 2020 we’ve dropped to less than 10 percent of manufacturers still focused on business continuity challenges, and there’s been almost a doubling of the number of manufacturers who are now focused on growth and innovation in the ‘next normal’ (50 percent).
Now for the bad news. A ‘digital divide’ has formed between two types of companies, with digitally enabled manufacturers feeling less of an impact and further along in their recovery efforts. These manufacturers are those now focused on innovating and trying to capture market share, while non-digital manufacturers are still focused on cost-cutting and selling off high-risk projects.
Mergers and acquisitions (M&A) will widen the digital divide
IDC Manufacturing Insights Research Director, Reid Paquin, postulates and presents research evidence for the growing digital divide and the potential for increased M&A activity in a post-COVID manufacturing environment (IDC is forecasting M&A-related spending will more than double in manufacturing in 2021).
It will be digitally enabled manufacturers that will lead the charge in making targeted investments, using M&A to further their transformation efforts. While those non-digital manufacturers that are still struggling will continue to fall further behind.
By bringing together released and new manufacturing capabilities on Microsoft Azure, Microsoft 365, Microsoft Dynamics 365, and Microsoft Power Platform, the Microsoft Cloud for Manufacturing is striving to empower your business to accelerate pandemic recovery, create operational resiliency, and help close the digital divide.
Stay updated on Microsoft Cloud for Manufacturing
Below are five trends that COVID-19 has accelerated in 2020 and that we expect to see persist in 2021 and beyond, that have contributed to the growing digital divide. These are areas where we believe Microsoft and our partners can help you connect the dots across your manufacturing operations, workforce, design and engineering processes, customer engagements, and the end-to-end value chain with the Microsoft Cloud for Manufacturing.
- Trend #1: Securing factories and field assets is essential
- Trend #2: The frontline needs retooling and reskilling
- Trend #3: The journey to product-as-a service is accelerating
- Trend #4: Partnerships and ecosystems are critical to manufacturing
- Trend #5: Resilience and sustainability are top-of-mind for all manufacturing stakeholders
Follow Microsoft Manufacturing on social and visit our Microsoft Cloud for Manufacturing website to get the latest on how Microsoft and our partners are helping manufacturers create a more resilient and sustainable future.