Market Impact Report

Overview

Most enterprises are sleepwalking into the Human+Machine era. Their operating models can’t keep up, and modernization alone won’t save them. Advances in AI, robotics, internet of things (IoT), and edge computing technologies, along with human capabilities, are propelling enterprises into the Human+Machine era faster than expected, driving real-time convergence between technology and human capability and delivering intelligence, agility, and resilience at scale.

This convergence is transforming the “adaptive enterprise” from concept to reality in organizations where people, data, physical assets, and digital intelligence coordinate into a system that responds dynamically to business needs.

For most enterprises, this shift to the Services-as-Software paradigm remains more aspiration than reality. Progress requires moving beyond an integration mindset toward a model of value orchestration by modernizing and combining disparate systems. Enterprises only realize true business outcomes when processes and data are at the center of the operating model fabric, guiding the design of technology portfolios, talent strategies, and sourcing relationships around them.

This research, based on a survey conducted by HFS and Hitachi Digital Services with 505 enterprise leaders across financial services, healthcare, industrial manufacturing, energy, and consumer goods, explores what it will take for organizations to evolve into adaptive enterprises and the scale of the current readiness gap.

Key findings:

• AI is fusing digital and physical worlds
  Nearly 40% of enterprises report scaling industrial IoT, digital twins, and private 5G networks. AI is the missing jigsaw piece—the orchestration layer—connecting IT (digital systems) and OT (physical systems) to enable truly adaptive enterprises.
• Tech portfolios are being rebuilt
  Data, AI, and cybersecurity have become engine rooms of technology services, with 71% of enterprises increasing their cybersecurity spending, 63% investing in AI model development and operations, and 61% expanding AI-driven IT operations.
• Readiness lags far behind ambition
  Enterprises erroneously conflate tech-driven modernization with value creation. Despite bold claims around emerging technology adoption, only one in five enterprises considers itself prepared for a Human+Machine operating model.
• Process and data are the linchpins
  Enterprise leaders cite redesigning processes (60%) and establishing robust data foundations, governance, and compliance (59%) as the biggest obstacles to Human+Machine delivery.
• Providers are falling short
  Fewer than one-third of enterprises believe their current partners are equipped to support Human+Machine delivery, underscoring the need for a new era of consulting, orchestration, and value-linked partnerships. Enterprise leaders must reset their sourcing practices and procurement models to prioritize value over inputs.

Enterprise leaders cannot afford to postpone this shift. Technology modernization may keep operations afloat, but it will not set enterprises apart from their competitors. Those who remain fixated on incremental upgrades will be trapped in vicious cycles of pilots.

The winners will be those who take on the harder challenge: rewiring ways of working by prioritizing processes and data, building Human+Machine operating models with embedded governance, fostering outcome-linked partnerships, and reskilling their workforce for trust and speed. These orchestrators will unlock the true power of their connected digital-physical ecosystems.

Complete the form to access the full report.

Authors: