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Global connected products space presents big opportunity for manufacturers, says Capgemini report

June 26, 2018

The global manufacturing industry could see a value add of $519-685 billion to revenue by 2020 through smart, connected devices, says a report by Capgemini’s Digital Transformation Institute.


The research was carried out across 10,000 senior executives in manufacturing organisations across nine countries, namely - Italy, India, China, Sweden, Netherlands, Germany, France, United Kingdom and the United States.

As per recent estimates, about 50 per cent of manufactured products will be smart and connected by 2020. In fact, 18 per cent of manufacturers say that they plan to stop manufacturing products altogether and move to a pure service-based business model. Such a move will require enhanced capabilities.

According to the report, given that there has been significant increase in smart, connected products penetration and digitisation will further continue over the next two years, the need to invest in new technologies is too large an opportunity for manufacturers to ignore. Further, manufacturers will have to balance their priorities between sustaining their core businesses while investing in digital acceleration.

Meanwhile, manufacturers have started to refocus their IT investments. Around 50 per cent of manufacturers aim to spend more than 100 million euros in Product Lifecycle Management (PLM) platforms and digital solutions in the next two years.

The report highlighted that, 86 per cent of ‘novices’ do not have the sufficient availability for data management within their current capabilities; 95 per cent have insufficient skills for app design, and 94 per cent for artificial intelligence. Outside hires cannot completely fill the digital talent gap and so organizations will need to invest in digital training, tools and new collaborative ways of working for their existing employees.

Further, they would also need to capitalise on the data generated by connected products in their transition to selling services. As products shift increasingly towards connectivity, manufacturers will also need to integrate software capabilities into their product design processes.


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