Skip to content Skip to footer
Search

Industrial products

Industrials pursuing cloud value in product innovation, improved customer service

Manufacturers were well on their way toward Industry 4.0 before COVID-19 struck. The pandemic pressed the fast-forward button, accelerating digital, market, workforce and regulatory trends already in motion. With changing customer expectations, industrials are adjusting quickly and increasingly adopting a digital agenda.

Accordingly, executives of industrial companies recognize the importance of cloud on numerous fronts, especially to drive rapid product and service innovation. But they have yet to realize it as an engine of innovation. Our PwC US Cloud Business Survey indicates that while nearly half of industrials (44%) are “all-in on cloud” and have scaled it throughout their businesses, the sector lags the cross-industry average of 50%. Just 19% of industrial sector executives say cloud has added substantial value to innovating products and services. This reflects that, while industrials understand they need cloud to capture all sorts of value (smart-factory transformations, growing portfolios of IoT-connected products, enhancement of customer experience), they also struggle to find where they’re yielding value at scale.

Bar chart -  Industrials capture cloud value in employee experience, product innovation and profits

Q: To what extent have you realized value in those areas to date? Substantial value Base: 141

Half of the industrial sector executives say just measuring cloud value is the biggest barrier to achieving that value. And, for most of them, cloud has been relatively peripheral to the core business, with just one in four agreeing that cloud is central to their business strategy and critical to revenue growth (e.g., advanced service design capabilities, deep product expertise, optimized workload differentiation). These findings suggest that there’s an enormous amount of potential value that industrial manufacturers can unlock beyond using cloud simply for infrastructure migration — things like accelerating product development and leveraging cloud in IoT- and software-related services tied to their products. 

 

As they race to develop smarter IoT-connected products and services, some industrial sector executives see cloud as key.

Nearly a third (29%) of industrial products leaders agree that faster innovation and delivery of new digital products and services is the primary method of measuring cloud value. Breaking the responses down by executive role (across industries) tells a different story about the lack of consistent alignment on cloud value: CIOs (39%), board members (23%), COOs (24%) and CFOs (19%). The apparent misalignment surrounding cloud value at the executive level could help explain why industrials aren’t fully realizing cloud value. When asked whether cloud adds substantial value to product innovation, for example, 40% of CIOs across industries agree that it does, compared to far fewer COOs (22%). There appears, then, a need to close the cloud-appreciation gap between certain leaders (particularly CIOs) and others, including board members and tax leaders.

Looking ahead, CIOs in the industrials sector are prioritizing cloud capabilities around cybersecurity (with 55% saying they’re doing so), which is unsurprising given that the increasing adoption of IIoT technologies has in turn increased the number of potential entry points for cyberattack. Transforming customer experience is also in their sights, with a third of industrials expecting cloud technology to drive better customer experience. Indeed, cloud will likely be integral to industrials as they seek to digitalize the customer experience by rapidly building (or expanding) their B2B and B2C e-commerce platforms over the next three years.

Fast forward your business with cloud. Ready to get started?

PwC’s Cloud Transformation solution

Learn more

How can tech leaders maximize cloud ROI?

Tune in to The CIO Imperative webcast series to learn how you can get cloud payback.

Watch now

Jenny Koehler

Partner, US Cloud & Digital Leader, PwC US

Email

Next and previous component will go here

Follow us