New HFS, Hitachi Digital Services Report Warns: Most Enterprises Aren't Ready for the Human+Machine Era

NEW YORK, Dec. 16, 2025 /PRNewswire/ -- HFS Research, in partnership with Hitachi Digital Services, today announced the release of a groundbreaking report titled "The Human+Machine Era Will Reward Orchestrators, Not Integrators." The study reveals a striking disconnect between rapid enterprise adoption of emerging technologies and the operational readiness required to achieve real business outcomes. While organizations are scaling industrial IoT, digital twins, private 5G, edge computing, and AI at unprecedented speed, only one in five enterprise leaders believe their operating model is prepared for Human+Machine delivery.

Key findings from the study include:

• Only 20% of enterprises feel prepared for a Human+Machine operating model.
• Nearly 40% are scaling industrial IoT, digital twins, and private 5G.
• 60% say end-to-end process redesign is their biggest barrier.
• 59% cite weaknesses in data foundations, governance, and compliance.
• Fewer than one-third believe their current providers can support Human+Machine delivery.
• Planned investment increases include cybersecurity (71%), AI model development (63%), and AI-driven IT operations (61%).

In this study, Human+Machine refers to an operating model where people, data, AI, and physical assets function as a single coordinated system, connecting digital IT and physical OT so enterprises can sense, decide, and act in real time.

"Most enterprises are charging into the AI era with impressive ambition but insufficient readiness," said Phil Fersht, CEO and Chief Analyst at HFS Research. "They're obsessed with shiny tools but terrified of changing how they work. The winners will be the few brave enough to tear up their operating models and rebuild them for Human+Machine delivery; everyone else will be a spectator."

"Scaling digital twins, edge, and AI means nothing if IT and OT remain disconnected," said Roger Lvin, CEO, Hitachi Digital Services. "Across industries, performance, resilience, and safety depend on unified orchestration and not fragmented integration. We're enabling organizations to converge their digital and physical operations so they can deliver outcomes that are measurable, valuable, and impossible to ignore."

The report, based on insights from more than 500 Global 2000 executives, reveals that while nearly 40% of enterprises are scaling technologies that merge digital and physical operations, most are still structured around outdated, integration-heavy workflows. This misalignment is creating what HFS calls a "readiness chasm," a widening gap between technological ambition and practical capability. The gap is even sharper in industrial, energy, and mobility sectors, where predictive maintenance, digital twins, and unified security only create value when IT and OT operate as a coordinated system.

A majority of enterprise leaders cite foundational issues, not technology itself, as the primary barriers to progress. Sixty percent identify end-to-end process redesign as their biggest obstacle, while 59% point to weaknesses in data foundations, governance, and compliance. Without addressing these foundational issues, the report warns that even significant AI investments risk stalling out in isolated pilots rather than driving enterprise-wide transformation.

"Our research shows that processes and data—not technology—are the biggest barriers to scaling Human+Machine delivery," said Ashwin Venkatesan, Executive Research Leader at HFS Research and lead author of the study. "If enterprises don't redesign workflows or establish trusted data foundations, even the most advanced AI investments will fail to deliver value. Orchestration is what unlocks the Human+Machine era."

The study also exposes growing dissatisfaction with technology service partners. Fewer than one-third of respondents believe their existing providers are equipped to support Human+Machine operating models. Instead of traditional system integration, enterprises are seeking partners capable of orchestrating data, AI, infrastructure, operational technology, and business processes into coordinated, outcome-driven systems.

"Bringing AI into the physical world is a fast-evolving space, so clients are best served by working with partners who can orchestrate complex physical-digital ecosystems, especially in industrial, energy, and mobility environments where IT–OT convergence determines real performance outcomes," said Hidetaka Sasaki, Chief Lumada Business Officer, Digital Systems & Services, Hitachi. "Organizations that align AI, data, and operational technologies around outcomes will take the lead in this new era."

Investment patterns further reinforce this shift. Over the next three years, enterprises plan to significantly increase spending on cybersecurity (71%), AI model development and operations (63%), AI-driven IT operations (61%), and data engineering. This reflects a broader reallocation of resources toward capabilities that support real-time intelligence, resilience, and convergence required for Human+Machine operating models.

The study further notes that outcome-linked commercial models are gaining momentum. More than half of enterprises now prefer performance-based, consumption-based, or value-driven engagement models, signaling a decisive move away from traditional labor-based pricing.

Fersht reinforced the urgency for enterprises to act decisively: "The winners will be those who turn convergence into resilience, speed, and measurable value. This is no longer about modernizing your stack, it's about rewiring your enterprise to operate at the speed of AI. Orchestrate or get left behind."

The full report is available here.

About Hitachi Digital Services
Hitachi Digital Services, a wholly owned subsidiary of Hitachi, Ltd., is a global systems integrator powering mission-critical platforms with people and technology. We help enterprises build, integrate, and run physical and digital systems with tailored solutions in cloud, data, IoT, and ERP modernization, underpinned by advanced AI. By combining Information Technology and Operational Technology (ITxOT), we drive efficiency, innovation, and growth across industries. With over 110 years of Hitachi Group's engineering and technology leadership, Hitachi Digital Services is powering smarter platforms for a safer, more sustainable future. For more information on Hitachi Digital Services, please visit the company's website at www.hitachids.com.

About HFS Research  
HFS Research is a leading research and advisory authority on enterprise transformation, serving Fortune 500 companies with fearless insights and actionable strategies. With unparalleled access to Global 2000 executives and deep expertise in AI, automation, and digital business models, HFS empowers organizations to make confident decisions that create sustainable competitive advantage. For more information, visit www.hfsresearch.com.  

SOURCE HFS Research