Industrial AI, servitization, and sustainability are redefining how manufacturers compete and deliver value.
IFS, a global leader in Industrial AI software, has unveiled its State of Service 2025: Manufacturing Transformation Report, revealing that manufacturers are shifting from a product-centric mindset to a service-led growth model. Conducted in partnership with Accenture, the study surveyed 800 senior manufacturing leaders worldwide, underscoring that servitization is now central to profitability, with 39% of respondents citing it as a key long-term growth driver.
The report highlights that Industrial AI, sustainability, and cloud modernization are reshaping manufacturing strategies. Although 96% of manufacturers use AI in service delivery, nearly three-quarters have yet to scale it across operations, signaling a significant opportunity for transformation.
“Manufacturing is undergoing a defining transformation. Service has evolved into a core profit engine,” said Mark Moffat, CEO, IFS. “Industrial AI and sustainability are now central to delivering smarter, faster, and more personalized service.”
Gert Müller, EMEA Intelligent Asset Management Lead at Accenture, added: “Service has reached a tipping point—it is now the front line of competitive advantage. With Industrial AI maturing rapidly, manufacturers can anticipate needs, personalize experiences, and extend service value like never before.”
AI, Workforce, and Sustainability Drive the Future
While 28% of manufacturers have fully scaled AI, many face challenges in data governance, cybersecurity, and legacy integration. The study also found that 98% report labor shortages, prompting investments in training academies, e-learning platforms, and automation to reskill teams for the digital era.
Sustainability has emerged as a strategic priority for 97% of respondents, with 79% tracking emissions from service operations and 37% doing so in real time. Manufacturers are increasingly adopting circular economy models—using refurbished components and predictive maintenance—to reduce waste and extend asset lifecycles.
Despite 95% of manufacturers reporting supply chain disruptions, only 32% express high confidence in resilience. The report concludes that companies that successfully scale AI, embed new service models, and modernize workforce capabilities will define the next era of industrial competitiveness.
