1. Digital transformation is a key priority for SME manufacturers
More and more manufacturers no longer see digital transformation as a ‘nice-to-have’ but as a necessity to remain competitive. Technology is becoming increasingly central to core business strategy. For example, a large majority of companies (89%) say that automating processes is one of their key strategic goals. Automation means working more efficiently, responding faster to customers and suppliers, and better addressing shortages in labour and materials.
Many companies, for instance, are automating their order processing and inventory management: webshops are directly linked to Enterprise Resource Planning (ERP) systems, saving time, reducing errors, and ensuring inventory and pricing information is always accurate.
2. People make or break digital transformation
New technology can be acquired quickly, but that doesn’t mean everyone automatically uses it. The results show that 67% of companies see technology adoption as a stumbling block. In addition, 61% experience internal resistance to change, and just as many struggle to find and retain the right people to implement and manage these technologies.
This is familiar territory for many manufacturers: a new ERP system that, for example, links production orders with procurement and delivery times; an Manufacturing Execution System (MES) that captures real-time production data; or a low-code app to streamline production processes – all valuable technologies that only make a real difference if the people on the shop floor can use them effectively.
Companies that handle this well typically adopt a phased approach: starting small, optimising processes together with users first, and ensuring systems are logically aligned with the way people work day to day.
3. ERP systems remain the foundation
ERP systems continue to be the backbone of the IT landscape for many SME manufacturers: 89% use an ERP system such as SAP Cloud ERP (formerly SAP S/4HANA) or SAP Business One for core functions such as financial administration, inventory management, and invoicing. Notably, many companies still mainly use their ERP for these basic processes, while integration with other business processes often lags behind.
For example, quality control or service tickets are still often handled in separate tools or spreadsheets. Without proper integration, this leads to duplicated data entry and increased risk of errors. By integrating these processes, companies can unlock the full potential of their ERP system and work more efficiently with up-to-date information.
4. Cloud is the standard – but not for everything
The benefits of working with cloud solutions are well known: it’s scalable, flexible, and software remains up to date. Yet the survey results show that only 21% of SME manufacturers currently operate fully in the cloud across all their processes.
Despite the clear advantages of cloud, a full transition is not yet feasible or desirable for many SMEs. Often, this is due to practical reasons: some production processes still run locally, or machines are not (yet) connected to a cloud platform. As a result, manufacturers often opt for a hybrid approach – a mix of cloud and on-premise systems – allowing them to modernise gradually without disrupting production.
5. AI is increasingly being used in practical ways
The use of Artificial Intelligence (AI) is growing rapidly in the SME manufacturing sector. Currently, 60% of companies are using AI or plan to do so within the next one to two years. In practice, AI is mainly being used for reporting and data analysis (69%), as well as to optimise production processes and automate customer interactions (60%).
Examples include predictive maintenance, where machines indicate when maintenance is needed to prevent unexpected downtime, and automatically responding to customer queries or predicting delivery times based on real-time data.
Digital transformation requires both courage and a considered approach
The findings from this survey clearly show that digital transformation is high on the agenda for many SME manufacturers, but success is not guaranteed. Technology alone isn’t enough – it must work for the people using it. That requires thoughtful decision-making, achievable steps, and broad organisational support. Companies that manage this well are already seeing the benefits and setting the standard for the future.
