Schneider Electric warns that closed automation systems are hampering industrial competitiveness and decarbonisation efforts

Schneider Electric’s new global research, Open vs Closed: The $11.28M Question for Industrial Leaders, warns that closed, hardware-defined automation systems are quietly eroding the competitiveness of industrial firms , particularly mid-market manufacturers , by restricting agility, fragmenting data and driving avoidable costs. According to the original report, produced for Schneider by Omdia from executive interviews and a 320-respondent plant‑level survey, mid-sized companies lose on average 7.5% of revenue annually to the combined effects of downtime, inefficiency, compliance retrofits and delays; for a company with about $150m in sales that equates to roughly $11.28m a year.

Industry data in the report shows losses scale with size: large enterprises average around $45.18m of annual impact, while smaller manufacturers face proportionally steeper effects, in some cases approaching 25% of revenue. The study breaks the headline cost into four operational buckets: $6.1m from impaired agility and resilience; $2.28m from optimisation and efficiency shortfalls; $1.2m from preventable quality failures and poor data availability; and $1.7m from sustainability and compliance remediation.

The root causes identified are familiar to plant engineers and digital teams: rigidity of hardware‑tied control architectures, proliferation of vendor‑specific platforms and siloed data that blunt predictive maintenance and real‑time decision‑making. The research found many manufacturers operate between two and ten different industrial systems on average, with 29% running more than ten discrete hardware platforms , a fragmentation that increases specialised support needs and amplifies skills shortages at a time when industrial labour pools are tightening.

According to the original report, 77.4% of sites still require physical, hardware changes to deliver functional updates; some modification activities are estimated to cost between $25,000–$50,000 per hour and can rise to $250,000 per hour at organisations worth more than $1bn. Only 28% of respondents reported access to real‑time insights, and around half said 20–39% of critical data was not available in real time , deficiencies that directly undermine optimisation, energy management and emissions reduction programmes.

The study recommends a transition to open, software‑defined automation to decouple application logic from proprietary hardware, enabling multi‑vendor interoperability, faster change cycles, and improved data ownership. Schneider says customers often start with asset‑level pilots before scaling to full‑plant or multi‑site deployments, realising benefits in quality control, cost transparency and protection of legacy investments. For organisations targeting industrial decarbonisation, the shift promises more effective energy monitoring, faster rollout of efficiency measures and clearer compliance traces.

Schneider’s executive vice‑president for industrial automation, Gwenaëlle Avice Huet, said: “This research echoes what our customers tell us every day: industrial systems must adapt as fast as their markets.” Omdia’s principal analyst Anna Ahrens added: “In a world where product lifecycles shrink, supply chains fracture, and talent gaps widen, agility and flexibility aren’t optional. They are survival.” Both statements are cited in the report.

For B2B readers charged with industrial decarbonisation, the study underscores three immediate priorities: identify legacy bottlenecks that block energy and emissions data flows; pilot software‑defined control layers where change frequency or product variability is high; and quantify the business case in avoided downtime, faster product changeover and lower compliance retrofit spend. The report stresses that each quarter of delay compounds losses, turning deferred modernisation into forgone investment in efficiency and low‑carbon projects.

According to the original report, the opportunity is not purely technical but economic: modernisation can unlock direct savings that are redeployable into innovation and decarbonisation initiatives, while reducing the operational risk profile that increasingly attracts regulatory and customer scrutiny.