As technological, market and societal changes confront the manufacturing industry, CIOs must recognize external and internal factors to find the perfect innovation strategy.
Recent Gartner research found that more than one-third of manufacturing CIOs say growth is the top priority for their organizations. Yet the manufacturing industry tends to be focused on the present — companies staying on top of orders and making operations run smoothly. How will enterprises deal with disruptions in the future? To answer this question, manufacturers shouldn’t gaze into a crystal ball; they should check with the CIO.
“Technologically driven disruptions will cause the CIO to play an important role in forecasting the future,” says Pete Basiliere, Vice President Analyst at Gartner. “We already see developments that will change the manufacturing industry through 2023 — for example, uniform physical goods that are transformed into unique digital items through the use of information technology — so the time to act is now.”
Gartner has developed four scenarios for manufacturers in 2023. These have been designed to help CIOs determine whether they should be transforming their organizations now, and how to plan and execute IT initiatives.
Each scenario comes with its own benefits and risks
It is important to note that there are no “good” or “bad” scenarios here. They are all influenced by different external (customer requirements) and internal (approaches to change) factors that must be taken into consideration. “Each scenario comes with its own benefits and risks. Also, there might be a mix of scenarios alongside parallel ones playing out across different companies,” Basiliere says.
Systematic scenario: Protect the franchise
Companies in this scenario usually face uniform customer requirements and prefer a structured approach to change. They are well established, enjoy long-standing brands and market presence, and are fiercely protective of both. CIOs with innovation intentions must consider long planning cycles and high financial hurdles for technology investments.
Opportunistic scenario: Find the right things to do, better and faster
Opportunistic manufacturers also operate with uniform customer requirements, but their approach to change is much more fluid. In 2023, they will try to segment a uniform market to create different opportunities and improve their share. CIOs will find an open ear for new ideas and low ROI hurdles, but must remain cost-conscious to avoid endangering the competitive capacities.
Experimental scenario: Drive innovation with data
In 2023, manufacturers in this scenario will have a large portfolio of modular, value-based products and services that they can change or improve on the go without significantly changing processes or decreasing quality. Their success is based on data and analytics, and they rely heavily on data to make decisions and identify new trends. The executives know that they must innovate to stay competitive and the CIO is welcome to initiate technology disruptions on a small scale and grow the investment when the data supports it.
Unconstrained scenario: Pioneer new sectors
An unconstrained company is not unstructured. While it has a more fluid approach to change due to customers’ demand for unique products, it is very focused on establishing a role as a disruptor. Unconstrained manufacturers are willing to take risks to establish their brand and the CIO must play its part by focusing on technologies that increase logistical efficiency.
Gartner clients can read more in “Manufacturing Industry Scenarios in 2023: Leading Through Innovation” by Pete Basiliere, et al.
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