Hello everyone, I'm Eli Plaskett, Senior Associate Editor with Modern Machine Shop. Welcome to today's presentation, Global Complex Manufacturing Outlook 2025. The presentation will be led by Frost & Sullivan CEO Hendrick Millan, as well as SYSPRO's Kelly Kucera and Gavin Verain. Hendrick serves as Managing Partner and Africa CEO at Frost & Sullivan with over 25 years of experience supporting both private and public sector institutions. Kelly is the Senior Vice President of Global Marketing at SYSPRO with over 20 years of experience driving growth for cloud tech brands. Gavin guides SYSPRO professional services teams in helping customers efficiently utilize the company's ERP product. If you have any questions, type them into the questioner pane of the webinar interface. We'll do our best to answer all of them at the end of the presentation. We'll also be sending a link to a recording in case you miss something or just want to revisit the topic. Now with all that housekeeping out of the way, let's get started. All right. Thank you and welcome everyone to our session today. Just to kick us off here, we want to talk about modern manufacturing, why it's complex and growing more complex. We conducted a research study with Frost & Sullivan where we surveyed small and medium-sized manufacturers to assess the current state of technology adoption and the emerging trends that were seeing today. Our aim is to provide an analytical overview of the state of complex manufacturing and the industry technologies that are required for adoption. We will assess the outlook of the sector and identify potential areas of growth as well as what are some of the barriers to those adoptions. We're going to talk through these things in more detail today. And with that, I'm going to turn it over to Hendrik just to explain a bit more about the process for the research study, if you would. Perfect, Giddy. Thank you so much. Great to be on the webinar. Yeah, so a bit of background with regards to the approach methodology. You know, we used a structured iterative approach to the study, which pretty much just means that we learn from some of the outputs and then adjust, of course, accordingly. We're going to be able to do the research in order to maximize some of the insights. Both primary and secondary research, you know, were integrated into the study. You know, not a lot of research that's necessarily available, you know, on the medium end of the complex manufacturing markets. So, you know, a lot of insights were drawn directly, you know, by speaking to some of the executives around the globe. We combined an in-depth interview methodology with a detailed survey, extracted a good 360 data points from the industry. In-depth interviews and just shy of 300 from the detailed survey. So, a nice and extensive study. Secondary research, you know, we used a lot of reputable reports in order to take a look at some of the trainings, et cetera, in order to also use some of the projected question techniques that we utilized in the interview process. You know, that we'll reference in the study for you as well, just for your convenience, if you'd like to read a bit more on the industry. And we topped all of that off with some of the market intelligence database insights, you know, from Frost & Silliman directly. So, a good all-around study. And I think, you know, it's going to be exciting discussion today around some of the outputs. Absolutely. And I love that we've got all levels reflected here from an executive perspective, as well as a great dispersion globally of respondents to give us statistically relevant data. So, with that, let's dive in. I want to set the stage before we get into the trends, the key trends identified by the survey, which is really around this industry 5 .0 and understanding why it's important. So, our visual here shows a depiction of the defining traits of industry 5.0. And Gavin, I'm going to head to you first on this one. Talk us through why this is important before we get into the key trends that are facing manufacturers right now. Thanks, Kelly. Yeah. You know, if you just take a step back and you actually take a look at how fast technology is growing and, you know, how important people are to the organization, you know, it starts to blend a lot closer between machine and human, you know. So, when you go back to the Industrial Revolution, you know, everything started with automation and, you know, and it moved into the world of autonomy, right? Everybody wants this manufacturing plant. Everybody wants this manufacturing plant that they turn off the lights and the plant just goes. But what Industry 5.0 suggests to us is that we need to bring back the human element into manufacturing. In that way, we will now harmonize, you know, the interaction between people and technology, of course. You know, Industry 5.0 really marks that transformative evolution in manufacturing, you know, as we blend human, the creativity that we get from humans and the creativity that we get from humans and then the processing power and the technology that we get from machines, right? And so, when we combine that and we create human invention with machine innovation, you know, that's when you're now going to start seeing a lot more benefit to the manufacturer in that world. And as we take a look back, you know, you'll see that manufacturers or executives are are prioritizing industry 4.0, right? And so, that gives them that really nice springboard or platform from which they can actually move into Industry 5.0, you know, and that then creates those transformative opportunities within the manufacturing space, right? Creating that human-machine collaboration that we might refer to as cobots. So, you know, so, you know, so, you know, so, as you invest, you know, as organizations invest in Industry 4.0, you know, it does give us that starting point for the collaboration between machine and human. And I think that the value centricity there is super important to note, especially as we move into these trends, right? Because we've always had to balance no matter what business you're in, and especially with complex manufacturing where you've got to manage your supply chain and you've got to manage your processes and your people. You're still balancing quite a bit against the external world. And we're going to go into that in a lot more detail here in a couple minutes. Hendrik, anything you would add before we get into the trends? Hendrik, anything you would add to that in a lot of the trends? Hendrik, anything you would add to that in a lot of the trends? I mean, I completely agree with Gambon, obviously, but I think, you know, it's the context within which future technology investments really need to be evaluated with it. You know, I think the, you know, when we as Ross and Sullivan do evaluations of new technology investment, we simply take a look at that technology roadmap, that three to five year cycle of being what kind of technology we're talking about. And it's like the registrations and R&D lab focus, academic papers being published, et cetera, et cetera. But the intention is obviously to limit the risk of being, being disintermediated by some other technology over the productive life cycle of the assets. You know, so industry 5.0 is providing us with that relevant technical and sometimes even commercial context within which we need to evaluate these investments. Because this is, you know, essentially the timeframe within which a lot of these investments will come to fruition. So it's a really important concept to understand and the trends and dynamics and various components of it, and especially the value-centric component or element, I think it's really critical in order to evaluate investment. And that's the experience that you will be in the experience that you will be making and implementing over the foreseeable future. Yeah, absolutely. So let's, let's get into those trends. I think today we're going to discuss in depth a few more of these trends or a few of these we'll discuss in more depth while acknowledging there are extensive insights in this report. And we would encourage all of the attendees, we're going to provide you a link to download at the end of this webinar. And please take a look, we go into, we go into, to much more detail in the actual report itself. But we're going to discuss into the emerging technologies, investments in sustainability, how that's impacting manufacturers. And then of course, very timely, the government policies and the geocentricity of what's happening around the globe right now. So diving into these, the research study specific, highlighted six, the research study specific, the website, and the research study specific, the site of what's happening in the future, and the research study specific, the research study is actually very much of what's happening in the future, and the research study that is really referencing what technologies and to what level they're being prioritized by manufacturers today. And the right side, and probably even equally as important or more important, is how they're being, being implemented through the lens of ERP solutions to drive objectives. So let's talk a little bit more about the use cases. Hendrik, can you kick us off with some more of the insights from the study itself? Sure. I mean, I think, you know, it's important to understand that what we're looking at are, you know, the priorities from a focus perspective, not necessarily what they're currently integrating into the organization, which is quite a big or stock difference quite often. So, I mean, you see, you know, some of the usual suspects on there, you know, industrial IoT, artificial intelligence, et cetera, et cetera. And, you know, I always like to take customers back to just a few years ago when we were all talking about cloud technology and, you know, everybody was very tired about talking about cloud by the time we saw any sort of significant adoption of cloud and we saw real adoption towards the end of the 2010s and then speaking during COVID. you know, you know, so if we start starting to look at artificial intelligence, et cetera, there's obviously a tremendous amount of hype around the technology and it came through the research as well as you can see on the screen. But, you know, for practical purposes, AI is still in very much an exploratory phase. It's important to explore because we do expect the adoption of artificial intelligence to be significantly faster than what we saw, you know, with the cloud. But most organizations are still running pilot projects and, you know, trying to create value creation, you know, case studies within the organization in order to prove, you know, that relationship between return and investment. So, no major surprise is a thing that you see on this slide, but very interesting to take a look at even, you know, with all the hype, industrial IoT, you know, still, you know, top of the pops. Yeah, and Gavin, let's flip this over to you to talk about through the lens of the SysPro customer ecosystem. You work very closely with our entire customer base. What are you seeing and how are they taking forward these technologies? You know, Kelly, this is always the question we get asked is about, you know, which technology should I use, right? And what we do is we often talk about the, I refer to them as the three elements that drive any business, right? You've got people, you've got processes, and you've got systems, right? And somewhere in between, there's this fourth layer that says data, right? And so what we find is that a lot of organizations, especially on the technology side, what they do is they love to have a technology roadmap, right? But they don't closely tie that back to their business objectives. Right? And that's why you'll notice on the little circle side, on the right-hand side of the slide, you know, you'll see that people are talking about integration, machine learning, you know, enhanced cybersecurity. And so what happens is technology gets picked before we actually know what its value is to the business, right? And so what ends up happening is when you get into a world where we now have to start creating harmony between these systems, right? What's the very first thing that people ask? Well, how are the, the systems or these new technologies going to talk to each other? You know, what's the true value of AI to my business, right? And so you'll start seeing that integration becomes a much bigger topic. But if you just roll back and we start off with saying, what is my business objective, right? And then what technologies are better suited to, in fact, support my business objectives, right? Now you're creating a bigger synergy between business process, business outcome, outcome, and systems, right? And then once we bring in the data, now we can start seeing how people are making data-driven decisions, right? And so this is, this becomes a harmonized orchestra of influences that drive particularly the business objectives. You know, I'm often asked the question, you know, we want to deploy AI into our business. And then I asked a very simple question. Do you automate accounts payable checks? Do you automate purchase orders inbound to your business and turn that into transactions or demand? You know, do you run MRP? And if the answer is yes, guess what? You're already using some level or some form of AI. The question we have to ask ourselves now is, how does that AI drive my business objective, right? And then, then we start getting into the conversation of how do I get machines to deliver data that I can make decisions against, right? And most organizations have those. But, but when we, when we hear the overall topics, of AI and IoT and all these wonderful things, it becomes this, this almost world of unknown, let's call it the world of unknown, right? And, and when we don't realize we're already using those technologies, we're already leveraging them. So we have a baseline from which we can, we can start. And so, so immediately, once we have those conversations with customers, it removes the fear, it removes the unknown for, from them, right? To say, okay, I understand, you know, AI helps me in this way. Then we can start putting a particular journey in place for the customer that, that drives them to extended use of, of those technologies. You know, the, the, the challenge is always, you know, you're sitting in a room with, with, with a group of folks and, and somebody says, you know, we bought this tool for the, for the shop floor. We bought this tool for the sales team. And eventually they're all sitting there and they, they, they, they, they have a bunch of siloed systems. And the only thing that brings everything together is they, we bought that tool for the, they re, they, they, they, they, they, they, they, theyδήers, and the 200x from different owners, Windows, and the five, three 구 Organizations are already walking. They've got automation in their systems. They've got machines that are doing their work, right? They program the CNC machine and off it goes, it does its job, right? It presents information that tells us, you know, the machine is ready to be serviced, right? All of that information is some level of AI. How we grow into the more autonomous world or bigger synergy or harmony between the organization and the systems and its people, that's kind of where we like to put our focus in. Hopefully that kind of gives you some idea of where we see our customers and how we sit down with organizations as we go through this. Yeah. And I think I want to underpin there something you said that's really valuable. AI for AI's sake, a mandate doesn't mean it's going to be effective or efficient or drive the objectives of the business of what you're trying to do at that period of time, whether it's sailing or it's operational efficiencies or it's upscaling the workforce or just making them more efficient with their time and using them. So, you really have to sit down and assess your why and then start to drive this. I will highlight for all of you that are out there sitting in on the webinar. It's not reflected here, but our research studies showed that what both Hendrick and Gavin have discussed already is this is a journey. 57% of our respondents are only partially implemented with new technologies with another 40% in proof of concept. So, the research really backed up the fact that the pragmatic way that our small to mid-tier manufacturers are able to do this is through the staged approach, making sure that the time and the resources they have are used in a valuable fashion to drive these. And we can't just take an AI mandate for AI's sake and run with it. It really has to be through a systematic logical process to see the value, make sure that value centricity comes back. Okay, so let's move on and talk a little bit more very of the moment, right? And as we move into 2025, we're seeing shifting geo-governmental policies, climate change and sustainability are very important. very prevalent, right? We can't turn on the TV without hearing something about one of these. So, on the left side of the diagram here, our research showed that approximately 50% of complex manufacturers globally are investing in sustainable technologies, that it is important, with 26% currently seeing a reduction in their carbon footprint through those selected technologies. So, when we shift to the right side. When we shift to the right side, when we shift to the right side, and we talk about these geo-governmental policies, we can see that the investments are really, they vary significantly by region, and how those are moving through the adoption. So, what we did see, and I'm going to ask Kendrick for you to go first on this one with the global perspective. And I think Europe in particular, is seeing this investment from the government. the government side. Can you tell us a little bit more about that? Yeah, I think, you know, the sustainability agenda has obviously been critical for a long period of time. A lot of momentum has been built, I think, you know, based on some of the current administration in North America kind of doing a bit of a U-turn on some of the, some of the policies, or expected, I guess, to do a U-turn on some of the policies. I think it'll be interesting to take a look at how things pay now. But Europe has really been leading the back, I think, to a large degree, not just complex manufacturing, but just industry in general becomes a sustainability. And you can see it obviously on the statistics on the slide as well. There is quite a big challenge though, in that the cost of doing business in places like Europe is becoming almost unbearable, especially for mid-sized businesses, and then came through the research quite clearly as well. You know, they are starting to clean up, and they are starting to reduce some of the red tape, but it's going to take quite a while, I think, to get to a point where, you know, we can drive a lot of innovation, in this space, because, you know, as we're at the study, quite a significant amount of companies are using technology in order to drive sustainable practices, which means there needs to be quite a lot of innovation associated with the technology around sustainability, and, you know, innovation requires agility, and it requires low cost of operations. You know, Americans spent 12 billion hours last year complying with federal rules, according to The Economist's recent article that helped the US and Europe, and Europe enacted twice the amount of laws during that same period, you know, there was a good case study that came out in Denmark that said that a mid-sized firm in Denmark currently spends about 300,000 euros on adhering to sustainability disclosures, you know, all the online disclosures, which is obviously legally binding, and that's just not sustainable in the longer term. You know, turning our attention to developing regions, you know, Africa in particular, which is kind of my home continent, to a large degree, Africa is governed by the demand market, so, you know, majority of the advanced goods that have been manufactured in the region are being exported, you know, so it'll be dictated to sort of by the demand markets in terms of sustainability, so measures and legislation. Africa's demand markets do largely lack scale, and hence, you know, we see a lot of initiatives like the African content or free trade area, you know, they're trying to get up and running, and they're making some good progress in order to create bigger scale, and not just sort of stick to individual markets, which is just not small enough in order to be able to drive that demand, and then also, like I mentioned, drive that level of innovation that we require, because it requires scale. And then, yeah, I mean, we'll have to see what happens in the North America, that's going to have a very significant impact on the industry, not the term, and the innovation, the industry, you can see the long term, and the expectation is either that consumers will work maybe with their money, you know, or manufacturing, because we'll willingly take on some sustainable practices, you know, just based on being good environmental stewards, which, you know, we are seeing, especially for the firms that operate, you know, across all the major regions around the world, which I think is good. Yeah, and you talked about the speed of technology in there, so Gavin, let's talk about the longer term effect that has in the Americas, if you would, please. Yeah, you know, so if you sit down and you start building a business plan as an executive, right, or you plan your business for the future, you generally look at things and say, what's my three-year plan, what's my five-year plan, right? And inevitably, some of those actually line up with certain political calendars, four years, six years, or however you want to line that up, right? But technology is moving so fast, right? In a cycle of three years, technology has probably changed exponentially, right, compared to when you built the plan. So sitting down and creating that agile technology strategy is going to give organizations that advantage, you know, as they start preparing for what may or may not change, right? So, you know, what we try and focus on during these times is instead of evolving the business as a whole, right, so generally, we'll take a business plan and we'll say, well, this is my three, five-year plan, and I will invest in technology that gives me that three- to five-year plan, right? Unfortunately, in today's world, that no longer may fly, right, because of that speed of technology. So what we look for is those technologies that are agile, that play well in a sandbox, right, a friendly ecosystem, right? And then that creates that agility that an organization can have so that when government does decide, look, we're going to come up with a new reason to ask you for information or another control to help manage cyber security, right? You know, we're able to easily adjust and be agile, you know, some agility in the organization to adapt to that, create pockets of data that gives me that information. You know, we've seen this in just as a single example, right, CMMC and NIST. You know, we're seeing that even though the framework has been placed out, right, we actually know what's in the framework, but there's very little known about how that framework is going to be action, right? What is an audit going to look like, right? So in anticipation of what that audit might look like, right, technology needs to be agile enough so that when that information becomes readily available, right, from government, that we're able to adapt very quickly to provide them that without changing our business direction or changing our business focus. So selecting those best practice technologies that we know will evolve, right? And then that way, we as an organization, as a manufacturer, I can continue to deliver my primary objectives, right? I want to grow my market. I want to sustain my business. I want to keep my customers. I want to keep people employed. I want to serve my community, right? So at the end of the day, when you bring all of that, excuse me, together, that's when you start looking at how quickly technology changes. And how am I want to adapt? And how am I going to adapt on that? So, and this is a really great segue into two of the next trends that we saw. And that really is around, I'm just going to call it uncertainty. I think underpinning so much of what we've seen in the last five, 10 years of our generation, right? Every generation will have what is transpiring in the world around them that really formulates the direction we're taking our businesses and the direction of technology. What we've heard, and this came directly from our customer, Gavin, if you recall, a couple years ago, one of our favorite customer executives really said, regardless of what the next Black Swan event is, it's my job to have the toolbox to make sure that we can understand that we can understand that we can understand that we can understand that we can understand and navigate that uncertainty. And clearly, you know, here sitting in North America, we're faced with the import-export tariff, some trade considerations that are very, very timely. And I think the research study here really showed that supply chain resilience is the key. It really is when we come in, especially with complex manufacturing. Now, one of the data points on here talks about the shortage of skilled workers or skilled professionals. That's still something that is transpiring across the entire manufacturing industrial base, regardless of which sector you're in. But let's go back to the supply chain real evaluation. And Hendrick, I think you had some really great global perspectives and practices that you were seeing that underpins this, you know, just in case, you know, just in case, you know, just in case, instead of just in time, right, the product as a service. Tell us a little bit more about that from the global perspective. Yeah, I think the, you know, generally speaking, the executives that we interviewed, I was experiencing significant increased amount of time, you know, think about supply chain flexibility and just risk in general, you know, we moved from COVID to Ukraine to China to Gaza, you know, you know, extreme weather patterns, you know, across the world, even in the United States, you know, quite recently. And I think fires in California is costing the US economy around 250 billion US dollars. I mean, that's the size of the New Zealand economy and the Greek economy. You know, that's about massive figures at the end of the day, you know, when it comes to national disasters and all the other sort of the socio-political and geopolitical tension that we see. So generally speaking, you know, there was quite a wide range of strategies deployed, you know, none of which I would necessarily lift out as best practice, but, you know, there's a lot more thinking going into creating that supply chain flexibility and de-risking you to the business because nowhere is safe. I think it's just one of those things where, you know, traditionally speaking, you know, over the last few decades, you know, if you were based in North America, you're based in Europe, business is relatively safe on political risk and to a large degree, from sort of environmental challenges, et cetera, et cetera, et cetera, you know, but that's not the case here when nobody's going to be spared, you know, in the disruption that we are going to experience over the next 10 to 15 years. Yeah, Gavin, anything to add? Yeah, you know, it's actually quite interesting how we look back at COVID, right? I know it's 2025, right? COVID's so 2020. However, the learning experience that we went through there is to say that the unexpected is going to happen, right? What we start seeing is businesses are expecting the unexpected, right? Supply chains are disrupted all the time. You know, we see the major elements, you know, weather patterns, we see wars come and go, right? We see, you know, politicians come and go, but at the end of the day, business is still business. And there is a consumer at the back end of all of this that is expecting a particular product of a particular quality, right? You know, we seeing this just as, I mean, a recent example, right? Eggs, right? Let's, I mean, you know, it sounds like a very, very humorous story when you talk about the fact that, you know, we're all talking about the price of eggs. But if you really think about that, that's another supply chain disruption from the source, right? So when you just think about how is it that we are actually looking at technology in a way that helps us understand what would happen if our supply chain got disrupted? What happens if something else happens? So that what if scenario is really where technology can come into play and start giving us, you know, data about, you know, ups and downs in our business, supply and demand issues, you know, today we've got tariffs, tomorrow we don't, you know, but at the end of the day, we still have to produce a product, we still have to make money. And at the end of the day, we still have to create this environment where there's an ongoing economy, right? And so I think that that that world of uncertainty has become certain for us, right? And so I sometimes wonder, you know, what's next? But as you mentioned, we sat down with a few executives a couple years back, and the one person really, CIO of quite a big organization said, look, I don't care that, you know, all I need from a technology is to give me enough capacity or bandwidth or control so that I can run my business at a 70-80% capacity if we get another black swan event, right? And so, so, so technology is not the be all and end all, right? What fills that 30-40% gap that they're talking about? That's where human and processes, right? So remember, we spoke people, processes and systems, right? It's that harmony between these three that produce data that we can make decisions against. And so when one fails, the other one has to step up. And I think that that is where we start seeing that we've lacked the ability to continually drive these technical expertise, you know? And so we want to grow. We need to grow people while at the same time grow technology, while at the same time make sure that our processes support how these things interact with each other so that we can produce data for decision making. Yeah, we're living in a wonderful world. You know, we experienced COVID in 2020. But since then, if you just look at the number of supply chain disruptions, I mean, we don't realize these things, but there are three or four major wars going on in this world, right? Not just the one in the Ukraine and the one in the Middle East, right? There's a big one going on in Africa. All of this creates this supply chain disruption. How we respond to that and what technologies we deploy and how we educate our people is what's going to make our businesses successful. Yeah, and I think maybe, sorry, Hendrik, you go ahead. I just wanted to sort of latch on to what Gavin said as well. And that is, I think there is a big recalibration of our risk perception that is about to happen and not just in the developing regions, but also in the developing regions. There's a really interesting case study in West Africa. It was presented to me quite recently by one of the development finance institutions that had an investment in one of the coup states. So if you take a look at West Africa, coup belt running right through from west of Africa right through to the other side of the continent. Made a major investment in one of the ports. Coup happened, they phoned up the sort of the main investor and asked them whether they're pulling out. And he said, well, I'm not pulling out. I mean, somebody, everybody needs a port. So whether it's the old government or the new government, you know, we need to readjust our perception around risk. But, you know, my gut feel is after six months, it's going to be business unusual. And guess what? It was. Six months later, they were operating just as they were, you know, as the normal. Yes, you know, challenges associated with the democratically elected government were still not in place and not a transition plan, et cetera, but the port was operating. You know, the asset was operating. Our perceptions around risk, you know, I can guarantee you will look significantly different in the next five to ten years and what it did five to ten years ago. You know, based on all this level of uncertainty and the fact that what we would categorize as developing regions, region risk is now spilling over into the developed region with developed countries around people as well. And I think that recalibration is a great word that is just, it's not a once and done. It's a, we're constantly recalibrating, right? What is the toolbox that we're going to have? What is the convergence of our people asset, right? Gavin, you touched on that a little bit more, but that skilled professional with the tech technology and blending it. And blending it for value centricity. So I think as we look at all these trends that are very of the moment, you know, you can kind of see every decade, these things are going to be just the next new iteration. And I love Gavin, if I go back to a couple of slides where you said, look, this normal is no longer in four or five year cycles. It's really every 12 months, 18 months because of these things. And just to note, right? When we talk about the price of eggs here in North America, they're now blaming the wind for the spread of the ovarian flu, right? So we're on shore, we've got the chickens and here it is the weather that is this vast spread of, don't anybody quote me on that. I did see it pop up in my newsfeed as one of the driving factors for the bird flu. All right. So let's talk about the barriers to the birds. All right. So let's talk about the barriers to this, right? Look, we've got IIoT. We understand there's very real business implications, but how do I get past it? Right? And that was what we saw really take a definitive approach here in the research, which talks about cyber security concerns in this increasing world of digitalization and digitization and connectedness. This is a super real concern. We kind of have five different barriers today on this, on this webinar. We're only going to talk about two of the biggest ones. Again, we can come back, download the report and you can go into more of the insights on, on the other trends. And just for the sake of time, I'm going to show you a couple statistics here to set the stage. so we have six to go into more of the impact on the world and that's a huge change in the world. So it's probably the biggest change with what we're looking at globally. So when we talk about technology, adoption, varying around the globe, when we look at what is the digital competitiveness, I want to call it here, you know, not surprising. The U.S. has a digital level of a hundred, right? When we, what are these top 10 countries, we see this, but circled here is China at an 84.41. Now, why this is particularly interesting, I think, is when we look at through the lens of complex manufacturing, where's the adoption of smart technologies really taking pace? And China actually leads, boosting, I think, 45%, well above and outpacing most of the other countries around the world. So, Gavin, give us a little insight from your perspective on that. You know, when we look at that previous slide and we see that, you know, 100% for the United States on technology, you know, that's all good and well because we're taking it from the expansiveness or the use of technology in our everyday lives, right? Cars, mobile phones, all these wonderful things, right? But when you actually look at the complex manufacturer, we start to realize that it's very much a different picture, right? You know, and I'm going to suggest that, you know, even though we're the leader on technology on that one side in the US, right? You know, how we adopt it into the complex manufacturing world is really very different. You know, and the role of technology professionals in manufacturing organizations are going to start playing a much larger role, especially in North America. you know, we're starting to see that technology leaders are more in tune with the business than they were before, right? They now stand on their own. They've got their own, I don't want to use the word autonomy, but they have a particular deliverable to the business and to that business. It's really important that they drive technology from the perspective of driving the expected business outcome, right? You know, we start seeing that, you know, it's like I said earlier on, you know, buying a shiny new toy or buying technology for technology's sake is really why there's a lot of cybersecurity issues. There's a reason why there's a lot of integration issues, right? And so when those things start surfacing, that's when manufacturers pull back and say, I'm not so sure manufacturing or technology is going to work for me in my business, right? And having that agile technology, right? And having that agile technology strategy is really going to drive things. And that comes from the technology leaders in the business. And, you know, what we expect government to do is to say, you know what, we're going to bring out more cybersecurity rules. We're going to bring out more privacy rules. You know, it's because we've got so many pieces of technology. You just, you know, it's like a kid in a candy store. You walk in and you can pick one of 10 different things all doing the exact same thing. But the question is, does it bring harmony to my business? Does it bring harmony to my organization? And does it help me deliver my outcome to be a better business? Yeah. And I think the statistics really showed here, right? For APAC and North America, over 50% of our respondents said cybersecurity is a critical concern, right? So as manufacturers are innovating, they're integrating. They have to, alongside of that, prioritize cybersecurity. And they recognize that that is a priority. Yet, how? How do I do that alongside all of these things? So I know you talked about kind of the government side of this, Gavin, and where CMMC and NIST are involved here. Hendrick, what are we seeing around the world? Sure. Cyber fits, I think, in general, is going through the roof in all regions. I think whether you're talking about Africa, we're talking about North America, Asia, everybody's got the same problem. And I think the level of sophistication that we are seeing at a cybersecurity level is out of this world. So I think our average cost of reach sort of just went past 5 million US dollars for enterprises around the world, so based on some IBM reports. Cybercrime, depending on which report you believe, is going through the roof of the world. is somewhere in the region of about $10 trillion. That's the size of the German economy, just as, in a bit of a relative measure there. And frightening examples of where they use artificial intelligence. Deepfave Technology. There's this case study in Hong Kong that we picked up through the course of the interview process that a lot of people cited where the chief financial officer and some of the other colleagues were impersonated. They had deepfakes, essentially fighting a colleague, who had deepfakes. essentially fighting a colleague in Hong Kong and convincing them to transfer 25 million US dollars, you know, because of, you know, the instructions that they gave them based on emails and then obviously through confirming that through a phone call. So in short, it listed really high on everybody's agenda. Everybody's really concerned about it. And I think it's an area where especially I think the digital service providers can play a massive role in supporting. There was a lot of, I think, frantic thinking, not necessarily behavior, but a lot of franking thinking around cybersecurity that we picked up through the course of the interviews, you know, which need to be addressed as a matter of priority. Because I do think this is from a cost perspective and from a risk perspective, this definitely is up there with the highest ones. Well, and I think I want to move on here because these are barriers, right? So in light of, if I don't know what to do, I'm high, I'm very aware, right? I'm a manufacturer. I'm very aware this is a problem. So I'm not going to do anything yet. I'm not going to expose my business because I can't, I can't bring my production line to a halt because I've been hacked, right? So, so we're falling back on that. But Gavin, you just said something really important, the integration, right? So we talked really early on here in today's, discussion, discussion, that integration is part of Industry 5.0. That convergence has to come together. We know that we're adopting these technologies. Yes, cybersecurity, all these other things are barriers. But when we get into system integration difficulties, right? That's, I'm highly, you know, 43%, nearly half have said that's a reason that's stopping them. So we've got this thing I can't control necessarily with cybersecurity. Now here's something I can control and it's integration and nearly, you know, over 40% are saying that's still stopping me from moving forward here. So can you talk a little bit more around, because your team deals with this every single day here at SysPro, but talk to us a little bit more about that. You know, Kelly, as I said, you know, the whole thing comes down to technology for technology's sake. And so what ends up happening is as soon as an organization experiences one of these barriers, whether it's cybersecurity, whether it's integration, which are the big two, right? They start making fear-based decisions and not opportunity-based decisions, right? And so, so what we do is we, we, we see a lot of disparate technologies, right? And, and, and organizations are compartmentalizing their technologies. And, and, and they think that that creates a world of, well, if I only get, you know, inappropriate access in one area, it's not going to affect the other areas. But, but what we don't, don't always realize is that actually also diminishes our ability to perform at optimal levels as an organization. So, so when, when we've, when we see these disparate technologies, right? And data is being entered multiple times in multiple places, right? It, it, it now creates this world of human error. So then, then, then the, then the conversation starts to say, well, if I had integration, I wouldn't have human error. Well, at the end of the day, what we do is, is we encourage people to say, start looking for technologies that, that you know are like, you know, similar type technologies, you know, but drive it from a business process perspective. You know, if we, if we just look at the, the standard process of, of an organization from lead to sale, right? You've got a CRM system that manages your leads. You've got a, got an ERP system that manages your, your, your sales. And, and, and then you've got the manufacturing portion that runs on the, on the other side that actually delivers, right? And so you create demand, but if, if these three systems, so to speak, don't work in, in harmony together, you're going to start seeing these integration. errors, right? Or barriers, right? Or barriers, you know, you might find that somebody has picked a, a really great CRM product, best of breed, but at the same time, they may have a, another product that is also best of breed, but for some reason, these two just don't, don't play well together. Right. And so, so we start looking and saying to organizations, you know, how is it that we create these, these, these integration layers? And so we look for best of, best of breed integration layers, you know, how do we share data in an automated fashion, but it all has to drive, that single primary goal of us. And that's business success. Right. And so, so we see this all the time. A lot of this is related to the fact that technology is such a great thing. We all want the latest and the greatest. And when it doesn't work, we become scared and we say, well, maybe technology is not for us. No, technology is for everyone. And the right technology in the right hands combined in the right ecosystem is, is, is more valuable. than, than, than most organizers, organizations see. So that fear-based versus opportunity-based decision-making is, is really what we try and con, not convince, but, but try and walk people through a journey to say, you were burnt once, right? It doesn't matter that you've been burnt. How do we get you to the point where you can see the value of what you're trying to achieve? And yeah, by the way, is the best way to get there. Let's talk about that agile technology journey. Does that help? Yeah. And I think the degradation here, of the system performance, right? When we're trying to integrate all of this, that's, that's a very real concern. What I found interesting that from the, the actual data from the research though, is we've got this other bucket, nearly 30% in this other. Hendrick, what was in the other? Just, you know, for inquiring minds at all, what was the other 30%? There's always another, isn't there? There's always another. And some quick buckets got to go through all the responses in order to figure out what the other was. And this time around, it was my job. But anyway, it was very interesting because it, it, it kind of echoes, I think what Gavin has mentioned a couple of times, which is, you know, it is extremely challenging sometimes, especially with, with new technology to make that direct link between the investment that you need to make on the one side and the expected return on the other side. But, I mean, how many times have we heard that, you know, new technology being pitched, you know, you can do this, you can do that, you know, you can do something completely different, you can do it in a different environment, which is just not good enough, you know, the, the, the all investments, you know, should be able to prove a very clear and quantitative relationship between investment required on one side, direct and indirect, just by the way, and the expected returns, including the timeline of those returns. There's a lot of the responses were around that, that sort of this vagueness and, and, you know, kind of boils back to that, that sort of pure play business relationship that you need to essentially prove. Because I mean, technology investment is just the same as any other investment. When you're investing in a piece of infrastructure or investment in technology, you need to be able to prove that. So a lot of the pitches and we spend a lot of time on boardrooms, you know, evaluating some of these things. And to be quite honest, I mean, the, the pitches are somewhat vague on some of the quantitative benefits, especially when it comes to the timing associated with it. So, you know, looking at, at the solution to some of those things, you know, in our models, potential benefits must be still done. You know, typically do three things, the ability to reduce cost, the ability to generate revenues, or the ability to improve customer experience and reduce, if you cannot distill it down to those three elements, you know, you shouldn't be in the boardroom, you need to still be in pilot phase, and still be sort of exploring sort of which technologies you, you'd like to implement. And then sort of the final thought on that is that, you know, our governance processes in general need to change in order to be more adaptive and flexible in order to take a look at new technologies that need to be implemented for the medium term. So let's say that three to five year timeline, quite often in the innovation space, and I spent 30 parts of my career doing corporate innovation, it's not a lack of good ideas, it's not a lack of ideas around technologies and solutions. You know, the problem is that we're pitching business of today against business of tomorrow. You know, we are taking the business of today, we're saying, right, so this is what we've got. How, you know, will the business of tomorrow fare with this new approach? And the burger land will always win, you know, there's no chance that you'll be able to win those arguments. So there's a change management component to it, which kind of speaks to a lot of the responses from the other. But there's a very much as a governance problem that we also need to address at boardroom level and executive committee level, in order to figure out how do we advance some of these technologies and ideas, through the system up to the point that they are mature enough, in order to be evaluated in their own right, not pitch them against the business of today. And that's going to make, you know, these adoption changes, not just the one or two that we spoke about, but all of them. So significantly easier to evaluate and address some of the challenges just by taking a look at corporate governance. Right. And the ROI, it's got to come down to the ROI here, right? But again, how you evaluate it against the business of tomorrow so you're not left behind while your competitors are innovating and doing this, even in the small to mid tier, right? That is a big factor. So I think with that, you know, it's about time we get to the end here and allow for some Q&A. But we know that mitigating all of these challenges when implementing technologies really goes back to some core pillars. And then we saw that in our research where we have to have the pre-planning. We have to have the coalition internally to help us drive the change management, the selection, the implementation. Making sure that we have to have the team, making sure that we have this cross-functional team. So it's not a unilaterally driven initiative happening in a silo, which every company can fall prey to, right? But especially with these trends that are changing from the external environment to what we're driving internally to pull that together. And then obviously reducing risks through the people, the people side of this. So Gavin, I know you're always the people, the processes in the product, right? And the people still play an incredible role with Industry 5.0. I think that's the really cool thing where we're seeing this convergence. So just to leave our audience with some final thoughts. And again, here at the Q&A, we're going to have a QR code we can link and download the report. And that goes into substantially more data here. But the future outlook, we really are seeing through this research study that smart factories are poised to lead the complex manufacturing space. That these are not concepts. As long as you take your journey, you get the right people to help you with that, right? We're seeing AI, automation, IoT, digital twins, and ERP systems converging together to actually form a cohesive approach for these manufacturers. I think the study really identified with numbers that you can use as part of the product that you can use as part of that ROI to drive your own business case. The productivity gains that we can achieve if we can mitigate some of these barriers and making sure that we've got the analytics there to substantiate that ROI. I think the productivity improvement of 26 to 50% we've got here on the screen is a major driver for wanting to do this, right? It comes back to the Bay 600, as you just suggested. And we have to be mindful of what these barriers are. We can't just set an agenda and drive it through, as you said, Gavin. And finally, it will be new regional nuances. It mostly goes without saying we've got a very diverse audience with us today. And it will, what impacts you from your government and your external factors. Anything you gentlemen would like to add as we wrap up before we get to our Q&A? Not from me. Not from me. Thanks, Kelly. I think just two thoughts. I think number one, executives need to be obviously comfortable with a lot of these technologies and innovations, which assumes that their knowledge about these. And it's critical to invent a spirit of exploration into organizations. And that happens top down. That does not happen. We need to deliberately drive exploration. And I don't use the word innovation for a specific reason because it is very different. The way that we are going to identify the appropriate investments is through a process of exploration. We need to be curious to allow organizations to live on that level of curiosity. And I think, you know, we can create significantly more flexible and adaptable organizations and supply chains, you know, by embracing their technology in the right way. And final thought, as we said through the course of the session, principles of business have not changed. since the beginning of time. It's not about to, you know, so sound business thinking will still provide. Absolutely. I'm going to pop over here to some of the Q&A from our attendees today. And one is just, do you recommend selecting U.S. suppliers to reduce the long lead times and potential tariffs? So, Kelly, I'll grab that one. I'll grab that one. You know, I'm going to make this suggestion on that question, you know, without actually knowing what you do, where you get your product from. I think the key here is find those suppliers that are able to deliver you your raw materials, whatever else it is you're buying from these folks in a manner that keeps your market going, that keeps your business going, and at the same time, keeps your customer satisfaction levels where they need to be. Because slower, slower, and I know it's maybe not a direct answer, right? But the key is find the right supplier for the right purpose, right? It's, and when you start switching suppliers, that's when you're going to find yourself in a world where you're going to be adjusting too often, too many times, you're going to have too many cost fluctuations, right? We like a standardized type of costing. We like to get standard margins so we can predict, right? And if you don't go down this path, your predictability of your business outlook may not always be where you're going to be. I'm going to suggest, you know, without knowing your business and knowing your product, that's a very, very difficult question to answer directly like that. No, and I think many people would have that same process, right? Or same thought. What do I do? I just need to solve this, right? What should I do? And I think it comes down to, I'm still going to go back to the toolbox, right? Are you in a constant state of supplier evaluation and scoring and making sure that you've got the right mix to meet your customers because you don't want to meet your customers because you don't want to unwittingly cause disruption because you're trying to avoid a tariff, right? If you can, you have to take a look at the entire picture to your point, Gavin, and it's going to fluctuate based on where you actually are. Here's a great question. What's the first step a manufacturer, manufacturing company can take to implement some of these smart technologies? Where do they begin? Yeah, let me have a crack at that one. I think if you take a look at the basic innovation cycle or what we term it the growth cycle, it always starts with the exploration phase. It always starts with, you know, for the lack of, let's use common business terms, long list of, you know, need to understand what your strategy is and the strategy will dictate what the requirements will be for flexibility, you know, for diversity, for mass customization, whatever the requirement be, but the commercial strategy is always the starting point. From that, you develop a long list of solutions which might or not be technology based. You know, we've got a tendency of always migrating to the tech side as it's sometimes a bit easier and that's a fact to talk about, you know, but some of the solutions might be fairly rudimentary. I mean, on the previous point, geographic diversity is one of the answers to some of the complexities associated with supply chain. You know, that doesn't require technology necessarily through high stage yet. But it doesn't necessarily require technology. And once you've got an understanding of the solution, then you start to systematically taste those solutions, build the business cases, just like you would for a new plant or for a new piece of equipment or for a new piece of infrastructure. A new plant that you've been putting on a different continent, you know, you'll be doing extensive due diligence on it. Don't skimp on it just because of technology and there's a lot of hype around it and everybody is positive about this particular piece of kit or this particular shiny object as, as Kevin mentioned earlier. And if you follow that due diligence process associated with your typical innovation cycle, you know, within an organization, you're going to end up with good answers at the end of the day. The key thing is to not skip the steps and the key thing is not to diverge away from the core value proposition and the core strategy of the organization. Technology should follow strategy and not the other way around. Yes. Absolutely. The technology for the sake of, as we said earlier, AI for the sake of AI is not going to drive you. The business and the results that you're looking to achieve, which are still the same regardless of which technology state you're at. Well, with that, we had one last question on cybersecurity, but I think we answered that throughout the course of our discussion today. I've left up here on the screen, the QR code so that you can download the full report. I want to thank Hendrick and Gavin for joining me today to really discuss in a little bit more detail some of these trends and where we're going. And for all of you that joined us on the webinar today, thank you. You will be receiving a link to where you can download the video itself, as was mentioned earlier. And we're excited that we got to share these results with you today. Thank you very much. Thanks everyone. Thanks everyone.