Priorities for Adopting an Exponential IT Mindset in the Durable Goods Manufacturing Industry

Adopting Exponential IT is critical for business growth and sustainability.

Analyst perspective

Enable value creation through Exponential IT.

From digitizing service models to computerizing operations and the new influx of artificial intelligence processing, information technology has drastically changed organizations.

Opportunities are multiplying at an exponential rate thanks to the rapid pace of technological change. To make the most of this impending opportunity, IT executives will need to transform into business leaders who can unlock advanced value and insights for their company while assisting with reducing risk by implementing an IT transformation. But in the world of Exponential IT, where new skills and capacities are needed, innovation readiness is often still a mystery.

The manufacturing industry is urged to rapidly inject an Exponential IT implementation into its roadmap to address potential industry disruptions.

It is essential for businesses to grasp the main priorities of Exponential IT transformation to stay competitive in today's challenging environment. Recognizing and integrating core foundational capabilities are considered crucial initial steps in starting a successful Exponential IT transformation, resulting in the generation of value in the industry.

Kevin Tucker
Advisory Practice Lead, Data and Architecture
Info-Tech Research Group

Executive summary

Your challenge

It is increasingly difficult to evolve and enable human-machine processes and capabilities to remain competitive and relevant.

IT leaders struggle to identify what skills are needed and where to get specialized knowledge to keep up with the exponential shifts taking place across their industry.

Increasing competition from non-traditional manufacturing businesses is pushing the manufacturing industry to prioritize transformations to compete and sustain the business.

Common obstacles

Customers are demanding personalized services and transparency, which is difficult for manufacturing organizations due to complex and costly legacy infrastructures.

Real-time data-driven capabilities are becoming increasingly critical to provide dynamic adaptability during market shifts and competitive pressures.

The need to develop sustainable and environmentally friendly business processes and policies for the new world.

Info-Tech's approach

Recognize the urgency of adopting Exponential IT within the manufacturing industry to combat industry disruptions.

Comprehend the four priorities of Exponential IT transformations in the manufacturing industry that are being adopted today to remain competitive within the market.

Acknowledge the foundational capabilities and maturity required to begin an effective Exponential IT transformation, resulting in value creation.

Info-Tech Insight

Organizations in the manufacturing industry are facing challenges in maintaining their competitiveness due to heightened competition, the use of legacy equipment, and traditionally large amounts or technical debt. Enabling innovation is crucial for improving the business' competitive positioning, where IT leaders need to be recognized as valued business partners to empower the organization to embrace exponential technologies.

What is Exponential IT?

• Exponential IT is a framework defined by Info-Tech Research Group
• The technology curve has recently bent exponentially.
• Generative AI has been the catalyst for this sudden shift, but there are more and more new technologies emerging (e.g. quantum computing, 5G), putting significant pressure on all organizations.
• Speed is now imperative. All IT leaders and organizations are at risk of falling behind if they do not adopt new technologies fast enough.
• Our framework instructs all IT leaders on how to transform their organization and elevate their value-creation capabilities to close the gap between the exponential progression of technological change and the linear progression of IT's ability to successfully manage that change.
• This research provides IT leaders with industry-specific priorities for Exponential IT and how to begin an effective Exponential IT transformation, resulting in value creation.

Your Exponential IT Journey

To keep pace with the exponential technology curve, adopt an Exponential IT mindset and practices. Assess your organization's readiness and embark on a transformation journey. This report will provide greater insights to help you build your Exponential IT Roadmap.

To access all Exponential IT research, visit the Exponential IT Research Center
Go to this link

The pace of technological change will continue to increase exponentially in Manufacturing

IT must solve the problem of rapidly and exponentially increasing expectations.

Organizations are adopting exponential technologies at an accelerated rate due to the rapidly changing landscape. Traditional linear IT is no longer viable to sustain IT's place as the leading technology provider for their organization.

Failure to launch will leave you far behind. The chasm between the organization's desire to harness technology and IT's ability to deliver it will continue to widen.

The challenges with traditional linear IT:

1. Slow to adapt to more modern service delivery models
2. Processes and decision-making that can't accelerate to meet demand
3. Transactional arms-length relationships with organization units and vendors
4. Insufficient funding and focus on technology innovation
5. Locked into a siloed and hierarchical operating model

The Case for Exponential IT

IT needs to fundamentally transform the way it is operating in the following ways:

Build an Adaptive Delivery Model: Enable flexible and efficient delivery of products and services.

Optimize & Autonomize Operations: Maximize efficiency while mitigating risks through intelligent automation and data-driven decision-making.

Broker Strategic Relationships: Strengthen and build both external and internal relationships to better align IT capabilities to organizational goals.

Embrace Digital Innovation: Evaluate and adopt solutions that drive consumer value, enterprise growth, and innovation.

Cultivate Workforce Flexibility: Dismantle traditional jobs and hierarchies, normalize new collaborative ways of working, and adopt a federated and hybrid IT operating model.

The durable goods manufacturing industry has significant challenges in adopting Exponential IT

Manufacturing Skills Gap

• The challenge for many companies is how to evolve their services and technology in a market that is demanding new technology skills and better cost management. The overall projected cost to business because of the missing jobs is over $1 trillion.
• Attracting and retaining talent in the manufacturing sector requires new ways of thinking about how they can be flexible to make manufacturing attractive to the newer generations of workers.

Technology Hampering Growth

• While companies are investing in modern technologies, fear is growing as the bad actors continue to wage their assault on businesses through cyberattacks that may become increasingly sophisticated with the use of generative AI.
• While companies are seeking to gain a deep understanding of Exponential IT, 93% of CEOs agree that generative AI is a double-edged sword that offers tremendous benefits and increased risks.

Electrification and Net-Zero Carbon

• Society is moving toward a cleaner future, which is supported by government legislation and funding totaling above $270 billion of climate incentives in the USA.
• The sticking point for manufacturers is that consumers have lost belief in electric vehicles as the first wave of early adaptors has been depleted and the mainstream has had excitement replaced by anxiety.
• As companies like Ford have cut their defect-riddled EV production back in favor of gasoline vehicle output, there is a broad negative impact to all climate-based manufacturing initiatives.

*National Association of Manufacturers

Imperatives for Exponential IT adoption in durable goods manufacturing and how to navigate disruption

Market expectations and obstacles

1. Predictive and prescriptive analytic manufacturing solutions
   • In predictive processes, we use current and historical data to make predictions about what may occur if we don't make some adjustments to processes.
   • For prescriptive instructions, we leverage the predictive analytics and historical corrective actions to then provide recommended actions to be taken to solve issues.
2. Extended reality and skills mastery
   • Immersive training, virtual collaborative diagnostics/repair, inventory count/auditing, and virtual product development are advanced technology opportunities that elevate employee skills, generate higher quality, and avoid costly downtime.
3. Innovative, simple, collaborative, and safe human-machine processes
   • Over 70% of manufacturing businesses surveyed are planning to conduct Industry 4.0 initiatives in 2024 (Wipfli, 2023).
   • 21% of manufacturers completed digital transformations in 2023, and 33% of manufacturers are now using cloud ERPs. Manufacturers are now seeing how digital transformation can automate and address the skills shortage by covering 63% of the tasks and avoiding 60% of the knowledge losses (Aptean, 2023).
4. Sustainable and resilient zero-carbon technology
   • Zero Carbon Industry by Jeffrey Rissman outlines how clean hydrogen, heat pumps, more durable products, better policies and a five-step transition process can help manufacturers become green (1. Clean Investment, 2. Grid Expansion, 3. Higher Efficiency, 4. Electrification, 5. Leverage Government Incentives).
   • Showcasing the financial value and overall impact such as ROI is challenging due to the siloed work culture within the industry.

Info-Tech Insight

We are experiencing exponential change as the market is shifting to focus on automation, intelligent processing, sustainability, and human-centric business processes. AI and ML will ensure simple, reliable, cost-effective, efficient, and engaging ways to attract and retain employees.

Business opportunities are developed from industry disruptions

Challenges