Swiss industry: Digitization is neglected at the strategic level

Swiss industry is neglecting digitization at a strategic level. But there is very much positive news: A large proportion of manufacturing companies in Switzerland have already implemented numerous digitization projects. These are often optimizations of operational processes. This usually marks the beginning of all digitization efforts. Accordingly, 44 percent of the participants in a survey conducted by the "Digital Strategy" working group of the "Industry 2025" initiative in the 2nd half of 2020 rate the digital maturity level of their company as "medium". Only 13 percent live digitization as an integral part of their corporate culture, while 17 percent have already implemented a digital roadmap and clearly defined processes and tools.

Swiss industry lacks formulated digital strategies

Just how operationally Swiss industry is still on the move when it comes to digitization is reflected in the fact that almost two-thirds do not yet have a fully formulated digital strategy. Although digitization is one of the top three strategic topics for more than half (55%) of the companies and even the number one strategic topic for 12 percent, one in five companies (22%) does not yet have a formulated corporate strategy or digitization is not a strategic topic in it.

The survey, in which the AWK Group played a key role with Dr. Boris Ricken, Head of Manufacturing, acting as co-leader, shows that industrial companies are still focusing strongly on the digitalization of their internal processes. 70 percent describe the automation of production and processes as an "important" or "very important" strategic challenge. This is also reflected in investments: 40-50 percent are making "high" or "very high" investments in the automation of their core processes (production, sales and marketing, service and customer service, development). Another important investment topic is new digital products and services. 46 percent said they were investing a lot or very much here. By contrast, significantly less money is being invested in the digitization of support processes (procurement, logistics, HR / admin).

High investment in business software

From a technological perspective, the companies surveyed invest by far the most in information technologies (ERP, CRM, MES, PLM). 61 percent said they were making "high" or even "very high" investments in this area. Other important technologies are the Internet of Things and data analytics. In contrast, industrial companies invest little in blockchain technology, smart contracts and communication technologies. It is surprising that despite the numerous cyber attacks on industrial companies in 2020, only 20 percent of all respondents said they had "high" or "very high" budgets for security technologies.

Leveraging Corona's digitization push

Corona changes this snapshot considerably. Almost three quarters (70%) of respondents agreed with the statement that digitization has become even more important to them as a result of the Corona crisis. Only a fraction of survey participants (6%) anticipate an extensive halt to digitization projects in their own companies due to Corona. Dr. Boris Ricken, co-author of the survey, points out: "Corona has made digitization even more important for industrial companies. However, the working group's survey also shows that there is still a lot of work to be done for Swiss industry. For example, a large proportion of companies do not yet have a strategy for digitization. In addition, the focus is still very much on internal process optimization. However, we strongly recommend that the other fields of action for digitization also be taken into account: Where are opportunities for new digital products and services? How can we inspire our customers even more with digital solutions and bind them to the company?"
Philip Hauri, Business Manager Industry 2025, adds: "Our Swiss industry has some catching up to do. The Corona crisis is also a catalyst that picks winners and losers based on their ability to digitize. We recommend strategically reprioritizing the portfolio when resources are scarce. Digitization is a top management issue that needs to be driven at executive management and board level."

113 companies in Swiss industry surveyed

113 Swiss manufacturing companies took part in the survey, which was conducted in the second half of 2020 by the "Digital Strategy" working group of the "Industry 2025" initiative. 82 percent of the participants are in upper management, of which 50 percent are members of the executive board and 32 percent are at department management level. Half of the companies are active in mechanical and plant engineering (including suppliers) and 17 percent in manufacturers of electronic, optical and electrical products. 61 percent of the companies surveyed employ 1 to 249 employees, 12 percent 250 to 999 employees and 27 percent more than 1000 employees.

Source: AWK Group and Industry 2025