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38%
of firms surveyed are yet to create a roadmap for digital transformation
37%
of firms feel resilience and sustainability are key driving factors of digital transformation
54%
of firms are showing an upward implementation trend towards adopting analytics and AI
3 years
or less is the average payback period for the technology deployment use cases
Supply Chain disruptions, shifting customer preferences, new distribution models, geopolitical uncertainties, a shift towards environmental, health and safety issues as well as demands connected to non-financial reporting (ESG disclosures) are rapidly transforming the manufacturing ecosystem in India.
To stay relevant, organisations are compelled to focus on long-term sustainable solutions with resilient business models and transparent practices, enabled by a robust digital transformation initiative. Our research found most Indian organisations unprepared to start the digital transformation journey despite it being high on the agenda. Moreover, most companies have seen moderate to low returns irrespective of high investments due to lack of digital strategy and business strategy alignment.
Creating the digital backbone is the starting point and organisations have taken the leap towards it. While analytics and artificial intelligence are becoming crucial for driving business outcomes, it is important to lay down the appropriate infrastructure and technology backbone to capture the data. Though the technology adoption rate is promising for Indian organisations, the right organisational set up and strategy are prerequisites for success. Our survey-based research on digital factory transformation of Indian organisations along with a comparative analysis of global organisations, highlights today’s challenges and suggests the way forward for creating value and realising the vision for tomorrow.
This is a very interesting time for organisations, specially in India, who have embarked upon the digitisation journey. The return on investments will be governed to a large extent by how organisations are using the data to generate insights and take timely decisions.
The research highlighted that every company is at a different stage of evolution in its digital transformation journey. While beginners are focusing more on strategic planning to create the right digital ecosystem for themselves, champions are leading the way by early adoption of digital technologies and creating a level playing field for them to compete at a global level.
38% of the Indian companies that had participated in the survey revealed that they do not have any plans to adopt digital technology for their businesses. According to the research, digital champions from across the six sectors in India believe that being resilient, transparent and sustainable will prepare them for future growth. However, they also opine that greater innovation and faster time to market will help them to stay relevant in the competitive landscape in the coming days.
*Source: PwC Digital Factory Transformation Survey 2023
Indian manufacturing companies currently prefer to adopt one standardised digital solution across plants compared to global companies which prefer one standardised digital solution with different functionalities or modules. Indian companies are showing an upward trend towards adopting analytics and AI with a current implementation rate of 54%.
*Source: PwC Digital Factory Transformation Survey 2023
The average payback period is less than three years for the technology deployment use cases. Shorter payback period encourages organisations to invest in technological solutions. Though investment in digital technology remains a challenge, lack of planning for aligning digital transformation with the organisation’s objectives and implementing digital technology remains a greater problem.
Indian companies tend to focus more on people, policies and mindset while the global companies prefer to build up the right system for driving any transformation. Successful digital transformation demands elements of centralised standard-setting to establish best practices and guidelines, accompanied by centralised teamwork for local implementation.
*Source: PwC Digital Factory Transformation Survey 2023
Though there is no single model for success, companies should frame a transformation blueprint having key questions to answer before committing to a digital transformation path. This survey has recommended key strategies for successful digital transformation of factories and drafted a strategic route focusing people, process and technology.
About the survey section
PwC India conducted a survey in early in 2023 to understand the current digital landscape in the Indian manufacturing industry and assess the prospect of laying down the future roadmap. CXOs of organisations in the domestic market, including multi-national companies (MNCs), were interviewed to gain insights into the digital transformation trends of the manufacturing sector broadly comprising six segments – retail and consumer goods, high tech and electronics, chemicals and process industries, pharma and MedTech, automotive and transportation, and industrial manufacturing – with a sharp focus on industrial manufacturing.
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