European Manufacturers Pursue Connected Transformation

Industrial data, flexible production and product traceability gain importance as manufacturers rethink modernization, ISG Provider Lens^® report says

LONDON--(BUSINESS WIRE)--European manufacturers are seeking closer integration of engineering, factory and supply chain operations to improve productivity and resilience amid economic uncertainty and growing regulation, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.

The 2026 ISG Provider Lens^® Manufacturing Industry Services and Solutions report for Europe finds that enterprises are moving from isolated digital transformation projects toward connected industrial operations. High energy costs, geopolitical uncertainty and decarbonization requirements are changing technology investment priorities. Companies are prioritizing the integration of robotics, AI and big data technologies into existing operations to achieve measurable improvements in performance.

“European manufacturers are under pressure to demonstrate the practical value of technology investments,” said Sebastian Sybrecht, director, ISG. “Extending successful initiatives across production sites is becoming more important than carrying out one-off technology deployments.”

Manufacturers in Europe are adopting common industrial data foundations that make information from engineering, production, quality and maintenance systems available across functions. They increasingly expect operational data to support analytics, AI and decision-making beyond individual production sites. Predictive maintenance and production optimization remain important applications, but enterprises are also exploring AI-enabled engineering assistants and automated workflows. These developments are increasing the demand for industrial data engineering, system integration and governance capabilities.

Software-defined manufacturing is also gaining attention as European manufacturers pursue more flexible production systems. Enterprises are seeking to separate production intelligence from rigid automation architectures where this is feasible, enabling more flexible control and faster configuration. These priorities are driving the demand for industrial edge, cloud-native architectures, digital twins, simulation and orchestration capabilities, ISG says.

Sustainability and product traceability are becoming more closely integrated with manufacturing operations. Digital product passport initiatives are accelerating the need for consistent, traceable information throughout the product lifecycle. European manufacturers are bringing together data on energy consumption, materials and production efficiency to meet environmental requirements and improve resource utilization. These priorities are also elevating the importance of interoperable data systems that connect product design, manufacturing and lifecycle management.

“Industrial transformation must account for the realities of existing manufacturing environments,” said Srinivasan P N, lead author of the report. “European manufacturers need service providers that can understand legacy systems, local operating practices and safety requirements to transform promising technologies into scalable solutions.”

The report also explores other trends affecting European manufacturers, including the growing importance of scenario modeling and digital planning amid supply chain disruptions and the need to modernize the engineering and manufacturing knowledge base.

For more insights into the manufacturing-related challenges faced by enterprises in Europe, and ISG’s advice for addressing them, see the ISG Provider Lens^® Focal Points briefing here.

The report evaluates the capabilities of 58 providers across four quadrants: Engineering Research and Development (ER&D) Services, Physical AI and Smart/Digital Factory Services, Supply Chain and Aftermarket Services, and Technology, Transformation and Consulting Services.

The report names Accenture, Akkodis, Capgemini, Cognizant, HCLTech, Infosys, NTT DATA, TCS, Tech Mahindra and Wipro as Leaders in all four quadrants. It names Atos, Deloitte, Hitachi Digital and IBM as Leaders in three quadrants each. Cyient, LTM, LTTS and Quest Global are named as Leaders in two quadrants each, while ALTEN, Bosch SDS, DXC Technology, Genpact and PwC are named as Leaders in one quadrant each.

In addition, ITC Infotech is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in two quadrants. Bosch SDS, DXC Technology, Hitachi Digital and LTTS are named as Rising Stars in one quadrant each.

In the area of customer experience, Syntax is named the global ISG CX Star Performer for 2026 among service and solution providers in the manufacturing industry. Syntax earned the highest customer satisfaction scores in ISG’s Voice of the Customer survey, part of the ISG Star of Excellence^™ program, the premier quality recognition for the technology and business services industry.

A customized version of the report is available from Hitachi Digital.

The 2026 ISG Provider Lens Manufacturing Industry Services and Solutions report for Europe is available to subscribers or for one-time purchase on this webpage.

About ISG

ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments.