Maggie Slowik (Senior Research Analyst, IDC Manufacturing Insights)

The manufacturing industry is changing faster than ever, with digital transformation (DX) underway at most manufacturers, and this is set to continue as organizations begin to feel the benefits that come with it. In the past, manufacturers have been focused on productivity improvements (how to achieve more with less), but that is no longer the best measure of success.


While efficiency gains are an important objective, forward thinkers are resetting their focus on innovation, the transformation of entire business models, and moving into adjacent markets. This market-disrupting shift is a common theme in IDC’s 2019 manufacturing predictions, which create a framework for IT and line-of-business executives to plan and execute technology-related initiatives in the years ahead.

IDC Manufacturing Insights has looked at the European implications of the worldwide manufacturing predictions, which launched back in November, and focused on two predictions which particularly highlight the continuum of change and digital transformation within the wider ecosystem of the manufacturing industry and global economy.

Pushed by the success of early adopters, 30% of Western European manufacturers will have enterprisewide digital transformation initiatives in place by 2021

Today, survival of the fittest is linked not to size or strength but to the ability to change — to move quickly, adapt, seize opportunities, and be agile. Capturing a piece of the digital transformation opportunity is at the center of business strategies today. Even though investment in DX is high (and the opportunity high), most manufacturers still approach it in a siloed manner, sticking to pilots or proofs of concept (POCs).

Competition, however, has never been stronger in the industry and failing to adopt DX is not an option for manufacturers. Those companies with DX implemented across the enterprise will be the ones that benefit the most from DX and give themselves an advantage over their peers. This success will drive the rest of the industry even further and provide best practices that others can follow on their own DX journeys.

Due to the more complex and fragmented business environment in Western Europe (given the range of countries, legislation, customer demands, etc.), IDC expects the region to proceed at a slightly slower pace than its worldwide peers when it comes to executing DX on a more holistic or enterprisewide level. That said, the European Commission has been investing heavily to support the European SMB sector, which accounts for a significant proportion of the overall industry. Examples include the U.K.’s “High Value Manufacturing Catapult” and France’s “Alliance Industrie du Future.”

By 2022, driven by rising customer expectations and competition from the platform economy, 15% of Western European manufacturers will be engaged in cross-industry collaboration, resulting in a 10% revenue increase

Manufacturers accept the fact that their customers no longer see them as just a supplier of a product and more as the potential source of an end-to-end solution. Product functionality as a service without the hassles of owning and maintaining it is going to be a new market for manufacturers. Customers also want personalized services at a competitive price, and this is a great opportunity for manufacturers to expand their existing market and serve new customers or meet the complementary needs of existing customers.

An example of such cross-collaboration is the automotive industry where, in an effort to maximize the overall driving experience and ownership, OEMs are investing in multiple or complementary products and services, such as in-car entertainment, route optimization, and parking assistance.

In Western Europe there are fewer opportunities for this type of cross-industry collaboration due to the size of the market and the smaller representation of large enterprises; the U.S. by comparison is a more developed market for the platform economy. Nonetheless, Western Europe is home to big manufacturing OEMs, many of which are in the automotive sector. Being digitally savvy already, they will certainly push for innovation beyond the manufacturing sector. According to IDC’s latest European Vertical Markets (EVM) Survey, 34% of Western European manufacturers think digital transformation will have a direct impact on customer experience — an opportunity not to be missed.

IT Impact

  • The proliferation of DX across the enterprise will require substantial investment in IT infrastructure, manpower, and support services for operational sustenance.
  • DX is driven by platforms and ecosystems, and IT will need to shift away from siloed enterprise systems.
  • IT will play a bigger role than just an enabler, and will take its place at the high table when it comes to discussing data-driven business models.


  • Build a realistic road map for your company’s DX journey — what does transformation mean to your business? What do you need to do to get there? But also approach DX in a holistic manner — get all stakeholders involved from the start so that pilots and POCs don’t fail.
  • Make the case to invest in a digital platform to serve as the foundation for your business’ transformation.
  • Scan the business landscape to identify partners for complementary data-driven offerings through collaboration. Reevaluate old-economy KPIs and assign responsibility and reward to create a data-driven business model.

While we have only provided a taster of our manufacturing predictions and their implications for the European market here, we hope they provide inspiration for your DX road map, no matter what stage you are at.

If you would like to learn more about IDC’s manufacturing predictions, see IDC’s WW Manufacturing industry predictions for 2019 – CLICK HERE. You can also access the complementary webinar here.