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Pandemic Boosts Urgency of Digital Transformation for German Manufacturers Facing Competitive Pressures


ISG Provider Lens™ report finds enterprises accelerating digital development amid supply-chain disruptions, threats to international trade and growing need for local production

The COVID-19 pandemic has severely impacted the supply chains of German manufacturers, increasing pressure to virtualize production and bring it closer to customers, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2020 ISG Provider LensManufacturing Industry Services report for Germany said the country’s manufacturing industry, already undergoing digital transformation prior to the pandemic, has begun to compete on new dimensions, including the ability to detect and respond to rapidly changing customer demands and to provide products as a service. The events of the past year accelerated the trend toward digitization.

“German manufacturing was already undergoing rapid change and digitization before the pandemic upended production and supply chains,” said Christian Decker, ISG partner based in Germany and smart manufacturing lead for EMEA. “What the crisis has accelerated was already a trend at German companies preparing for the future.”

The global effects of COVID-19 hit the German manufacturing sector hard, raising the importance of having an efficient global logistics network, the report said. The effects of the pandemic came on top of other drivers to virtualize and localize manufacturing, including looming international trade barriers and Brexit. The U.K. is one of Germany’s top sales markets, along with the U.S. and China.

The crisis also forced German manufacturers to quickly change their priorities, in some cases building new production lines for goods required to combat COVID-19, including vaccines, masks and mobile hospitals, ISG says. Almost all of Germany’s major industrial companies and many mid-tier enterprises have been involved in these efforts.

Other global trends have also accelerated digitization efforts in Germany. The emergence of IT-driven automotive technologies such as hybrid systems, infotainment platforms and electric motors, heavily promoted by German automakers, are increasing the value share of digital components in vehicles. This creates more opportunities for digital engineering providers to offer services that are relevant to OEMs and Tier-One suppliers, the report says. Germany’s auto industry is also exploring how to be competitive in the emerging technologies for shared mobility, which will increase demand for software-controlled services.

As in other geographies, German manufacturers are responding to changing customer demands, accelerating product cycles and declining product loyalty by focusing more on providing products as a service, according to ISG. This requires companies to acquire and evaluate customer data more quickly, and German companies—especially in the mid-tier level—are already using the first analytics solutions to achieve this.

German enterprises are also exploring new networking possibilities coming with 5G cellular technology, with its higher throughput, lower latency and support for thousands of devices in a location, the report says. For example, German manufacturers are testing application scenarios such as the networking of robots in parallel that previously could not interact with each other.

The 2020 ISG Provider LensManufacturing Industry Services report for Germany evaluates the capabilities of 78 providers across five quadrants: Smart Manufacturing Services – Automotive, Smart Manufacturing Services – Hi-Tech, Production Automation Solutions, Manufacturing Virtualization Solutions and OT Security Solutions.

The report names ABB, Capgemini (Altran), HCL, IBM, LTTS, Siemens, Tech Mahindra and Wipro as leaders in two quadrants. It names Atos, Bertrandt, Bosch, Claroty, Dassault Systèmes, DXC Technology (Luxoft), eInfoChips, Empolis, FORCAM, Forescout, Gefasoft, Indegy (Tenable), Infosys, MPDV, Nozomi Networks, NTT DATA, PTC, Qualys, Rockwell Automation, SAP, SCADAfence, Schneider Electric and UST as leaders in one quadrant each.

In addition, Cognizant and iBASEt are named as Rising Stars—companies with a “promising portfolio” and “high future potential” by ISG’s definition—in one quadrant each.

A customized version of the report is available from FORCAM.

The 2020 ISG Provider Lens™Manufacturing Industry Services report for Germanyis available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Germany, Switzerland, the U.K., France, the Nordics, Brazil and Australia/New Zealand, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit

Will Thoretz, ISG
+1 203 517 3119

Jim Baptiste, Matter Communications for ISG
+1 978 518 4527

Source: Information Services Group, Inc.
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