Industrial organisations across Asia-Pacific (APAC) are accelerating their adoption of digital thread technologies, yet many are still grappling with foundational challenges that hinder return on investment.
According to new research from Hexagon’s Asset Lifecycle Intelligence division, 70% of APAC businesses use digital thread or data connectivity technologies frequently or continuously, outpacing the US and closely trailing Europe.
However, 54% of APAC leaders say their digital transformation efforts have not yet delivered the expected ROI, with persistent issues around legacy systems, manual processes and workforce capability.
The report highlights regional trends and challenges that asset-intensive industries face in their digital transformation journeys:
- Australia faces integration challenges because of legacy systems and geographic spread, despite strong regulatory drivers in mining, energy and utilities.
- Japan leads in precision manufacturing and predictive maintenance, but disconnected systems make regulatory compliance difficult.
- Korea invests heavily in smart infrastructure, yet fragmented platforms and data localisation laws increase cybersecurity risks.
- Southeast Asia is scaling digital infrastructure rapidly, but skills shortages and limited cybersecurity maturity slow progress.
Despite the growing adoption of digital tools, APAC organisations are hitting major roadblocks. An overwhelming 75% cite skills and knowledge gaps as a hurdle, while 70% still rely on manual processes that slow progress and increase risk. Cybersecurity is another critical concern, with 66% of respondents flagging it as a top barrier, significantly higher than global averages.
Despite the rise in digital tools, 67% of APAC organisations still rely on paper-based information. This hampers efficiency and introduces risks around safety, traceability and compliance.
“Digital thread technology can provide end-to-end visibility, but without integrated platforms, skilled teams and clean data, organisations risk falling short. AI can only be as effective as the data it processes, and without a solid foundation of clean, standardised data, even the most advanced AI tools will fall short,” Hexagon APAC senior vice president Fabio Tada said.
With 69% of APAC leaders already using digital thread technologies, the region is well-positioned to lead the next wave of industrial transformation, provided it can overcome legacy barriers and build robust digital foundations.
Hexagon AB has proposed transitioning its Asset Lifecycle Intelligence division, along with several others, into a new standalone software company called Octave, which is expected to list on a U.S. securities exchange in the first half of 2026. Octave will focus on transforming data into actionable intelligence to help industrial and public sector organisations design, build, operate and protect more effectively.
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