The latest report from the Capgemini Research Institute unlocked the opportunity of a connected business reveals that more than 80% of organizations acknowledge that the shift to software and service-based models is a key trend impacting their industries.

From connected cars to remote health monitoring to smart home services, and more, organizations are shifting their focus to service innovation. Nearly 90% of organizations expect to see revenue from intelligent services in the next 3 years, and 87% say that intelligent products and services are crucial to their business strategy.

The research highlights that organizations feel ill-equipped to manage the shift from a product- to a service-based business model, and many organizations are yet to reap these benefits: half of those surveyed reported they are currently at the pilot stage.

Just a small cohort of organizations (8%) are ahead in their transformation journeys. These organizations have successfully strategized to transform their end-to-end value chains and operating models; actively focused on outcome-based or service-based business models; and moved away from legacy technology and systems.

Integration of new technology and existing systems and tools poses a challenge, the research shows that 56% of organizations agree that legacy technology remains a severe hindrance to progress.

Similarly, 76% of respondents cite data-related challenges, noting a lack of stable infrastructure to store the new data generated by intelligent products and services. This highlights the need for organizations to transform and invest in their digital infrastructures, ensuring access and robust management of data across the value chain.

The report recommends addressing these challenges by investing in talent to meet the demands of this developing growth area of their businesses. In fact, organizations reported more than 40% skill gaps in key roles such as data management and ana.