A global energy and automation firm, Schneider Electric, has unveiled a new global research titled ‘Open vs. Closed: The $11.28M Question for Industrial Leaders’, revealing how closed industrial automation systems are quietly eroding competitiveness, costing mid-sized organisations an average of 7.5 per cent of their revenue.
The research, conducted by Global Analysts firm Omdia, highlighted how these costs stem from operational inefficiencies, downtime, compliance retrofits, and delayed production, issues often masked by the perceived reliability of legacy automation systems.
For large enterprises, losses average $45.18 million, while smaller manufacturers face even steeper proportional impacts, losing up to 25 per cent of annual revenue, according to the report.
The study further revealed the key cost areas, breaking it into four critical parts, with the largest cost in Operational Agility & Resilience, seeing $6.1 million lost due to outdated and inflexible hardware systems that require costly modifications and complicate integration.
“Optimisation& Efficiency inefficiencies add $2.28 million, with many businesses managing multiple, incompatible systems that increase maintenance costs and downtime.
“Additionally, preventable quality failures & data maintenance account for $1.2 million in losses due to data silos and limited real-time access, while sustainability & compliance costs reach $1.7 million, as companies are forced to retrofit hardware to meet evolving regulations,” it stated.
The research included 10 C-suite interviews across industries; oil & gas, food and beverage, water and wastewater, metals, other manufacturing, as well as a global quantitative survey with 320 participants in energy and chemicals, manufacturing, mining, metals and minerals, warehousing and water, wastewater and waste.
The study was conducted in September-October 2025.
“At the core of the challenge is hardware complexity. Most companies operate across tw0 to 10+ distinct platforms, each with unique maintenance needs. This fragmentation drives vendor dependency; 30% of issues require specialised support, and this strains workforce efficiency due to niche technical expertise required at a time when companies are facing workforce and skills shortages. Siloed systems also hinder predictive maintenance and fast issue resolution, leading to costly downtime and lost productivity. These inefficiencies scale across operations, limiting agility.”
The research underscored urgent need for transformation as open software-defined automation offers a scalable, future-ready solution that modernises legacy systems, accelerates ROI, and strengthens industrial competitiveness and resilience.
According to the company, Schneider Electric customers are already realising these benefits. Many begin with pilot projects or asset-level trials, then expand to full-plant or multi-site deployments, unlocking full data ownership, improved quality control, and greater cost transparency, while protecting existing investments.
“This research echoes what our customers tell us every day: industrial systems must adapt as fast as their markets,” said Gwenaëlle Avice Huet, Executive Vice President, Industrial Automation, Schneider Electric.”
