The most striking thing about the industrial manufacturing vertical is its breadth and diversity. The spectrum of "industrial manufacturing" ranges from heavy construction to machinery of a wide variety, to metal fabrication to tools and tooling, to all manner and type of industrial equipment and components, to lumber and wood production, to miscellaneous industrial electrical equipment, and manufactured housing.

Companies within this industry are grappling with a complex a set of issues, chief among them: sensitivity to commodity and energy prices, exchange rates, high fixed costs that cannot respond quickly to demand volatility, economic cyclicality, and extended and complex global supply chains.

One of the responses, and major trends within industrial manufacturing, has been the offshoring of manufacturing - moving manufacturing assets to countries with lower labor and other costs. There are some signs that this pendulum may be swinging back, with an increasing equilibrium of labor costs. Signals are mixed, however, with opportunistic moves back on shore receiving great attention amid a slowing trend of offshoring.

Companies are reporting continuing uncertainty to modest optimism for 2014, with greater growth expected for the U.S. than for much of Europe, and growth slowing in the emerging economies.

The outlook is uneven across this broad sector. Construction employment picked up in 2013, and is at its highest point in more than four years. Mining equipment manufacturers report a drop in demand for new mining equipment. Trends are as uneven as the U.S. and world economies are.

The predominant sentiment seems to be that after two and a half years of very conservative management and "staying the course", companies see good profit margins, if not profits, and often very strong cash on their balance sheets.

The more conservative companies will take a "defensive" approach to technology investments, making "catch-up" enhancements to existing ERP and supply chain systems, particularly in the critical areas of transportation and logistics, global trade management, and inventory management.

Companies that take a more proactive, strategic approach will take this process one or several steps further, enhancing and maintaining their current technology investments while also assertively looking at new innovative technologies that have the potential for significantly boosting their capabilities in new ways that they may not have imagined just a few years ago.

While Industrial manufacturing is, to generalize, often as concerned with energy and commodity costs as with disruptive innovation, many of these manufacturers see the range of new technologies that are emerging, and realize that they cannot afford to ignore the potential of these innovations to significantly enhance their present and future capabilities.

                                                         The Outlook

In our view, several key areas of focus for industrial manufacturers in 2014 will be the technology foundations of manufacturing and supply chain excellence, and then investments around visibility and collaboration, analytics (and increasingly) predictive analytics, and, for the more strategic-thinking manufacturers, the emerging technologies which include, among other things: mobile, cloud, social, robotics, 3D printing, and the industrial internet.