The Digital Divide in Contract Manufacturing: Why 92% of CDMOs Are Facing a Defining Moment

Zero.

That's how many contract development and manufacturing organizations (CDMOs) say they have achieved full digital integration with their sponsors—even as 92% report those same sponsors are now raising digital requirements in contract negotiations.

Let that sink in for a moment. Nearly every CDMO is hearing about digital capabilities in partner discussions, yet not a single one has cracked the code on true integration. The window between "nice to have" and "deal-breaker" is closing fast, and the implications for contract manufacturers are profound.

Digital readiness for contract manufacturing is now more than just a competitive advantage—it's rapidly becoming a market requirement. The question facing quality and manufacturing leaders today isn't whether to embrace digital transformation, but whether you can afford to be on the wrong side of the digital divide when sponsor expectations crystallize into contract terms.

The Brutal Economics of Doing Nothing

MasterControl partnered with PharmaSource to survey 50-plus global CDMOs across the spectrum: revenue sizes from under \$1 million to over \$1 billion and with facilities spanning Europe, North America, and Asia. What was revealed? A sector in transition, caught between digital aspiration and manufacturing reality.

The divide is real, and it's widening. A significant majority of contract manufacturers remain in the early phases of digital maturity, while a small group of leaders are pulling ahead with integrated systems and real-time operational intelligence. The gap between these groups isn't just technological—it's economic.

But here's what should keep you up at night: While laggards grapple with legacy infrastructure and limited resources, digital leaders are achieving operational advantages that compound over time. They're not just working faster—they're working smarter, with data-driven insights that transform everything from quality management to predictive maintenance.

The organizations stuck in manual processes or early-stage digitization face a harsh reality: the cost of transformation increases while the window for competitive positioning narrows.

Download the full survey report to see exactly where CDMOs fall on the digital maturity spectrum and what separates leaders from laggards.

What Sponsors Are Actually Asking For (And Why It Matters)

Sponsor requests aren't futuristic or unreasonable. They're foundational. They're focused on basic digital capabilities that many industries take for granted:

• Quality management systems (QMS).
• Laboratory information management systems (LIMS).
• Electronic batch records (EBR).
• Enterprise resource planning (ERP) system integration.
• Basic visibility and compliance tools.

The disconnect isn't about ambitious artificial intelligence (AI) deployments or bleeding-edge technology. It's about fundamental digitization that enables transparency, traceability, and real-time collaboration.

According to the survey's respondents, nearly 70% of CDMOs are operating with limited or no automated data sharing capabilities with external partners. Think about that in the context of sponsor expectations. Manual data transfer, batch reports, and disconnected systems simply can't deliver the visibility today's pharmaceutical and biotech companies demand.

The good news? Right now, digital capabilities are mentioned in conversations but haven't yet become deal-breakers. Only about 10% of sponsors currently make digital maturity a major selection criterion.

The warning sign? That percentage is going to grow—and fast. The report reveals exactly which digital capabilities sponsors rate as most critical, and the results might surprise you.

The AI Paradox: High Hopes, Hard Reality

If you're feeling pressure around AI implementation in contract manufacturing, you're not alone. Nearly 80% of CDMOs remain in preliminary AI phases, with many still running pilot projects or exploring possibilities.

But here's where the opportunity gets interesting: There's a massive gap between impact potential and current deployment.

Our research identified specific AI applications where contract manufacturers see huge value but struggle with implementation:

• Supply chain forecasting and monitoring ranks among the highest for potential impact, yet implementation lags significantly behind.
• Predictive maintenance shows similar dynamics—high value, lower deployment.
• Key performance indicator (KPI) dashboards lead the pack for both impact and implementation, proving that practical applications are already delivering results.

This "impact vs. implementation gap" reveals where smart investment dollars should flow. The organizations that crack these high-value, underdeployed applications will capture outsized returns while competitors are still running pilots.

Access the complete Impact vs. Implementation matrix to see where 10-plus AI applications fall and identify your highest-ROI opportunities.

The AI maturity assessment in the survey report provides timeline projections and a framework for understanding where your organization stands. More importantly, it provides benchmarks for where you need to be.

The No. 1 Barrier Isn't What You Think

Here's where conventional wisdom about digital transformation gets turned on its head.

When we asked CDMOs about their biggest barriers to implementing AI and digitization, the answers challenged common assumptions. It's NOT cultural resistance. It's NOT lack of management buy-in. It's NOT workforce pushback against change.

The real barrier is far more practical—and in some ways, more solvable.

Nearly three-quarters of contract manufacturers point to resource and time constraints as their primary obstacle. While only one in five cite traditional change management concerns, the vast majority struggle with the operational reality of executing transformation while maintaining production schedules and compliance requirements.

This is actually encouraging news. It means CDMOs recognize the value of digital maturity. They want to transform. They understand the stakes. They're not fighting internal battles about whether to digitize—they're fighting capacity constraints about how to get it done.

The digital leaders surveyed have cracked this code through a specific methodology that laggards are missing. They don't try to transform everything at once. They follow a disciplined approach that generates momentum and ROI to fund expansion.

The full report details this "start small, pilot, scale" methodology that separates successful digital transformations from stalled initiatives.

3 Questions Every CDMO Leader Should Ask Right Now

As you evaluate your organization's digital transformation strategy, these three questions can help clarify priorities and identify gaps:

1. Are we digitizing chaos or optimizing processes first?

Digital leaders follow a critical principle: "Don't digitalize the chaos." Digital tools amplify existing processes, whether they're broken or functional. Process optimization must precede technological implementation. If your workflows are inefficient today, digitizing them will just give you fast, expensive inefficiency.

2. Where's the widest gap between potential impact and current deployment?

The survey reveals specific applications where the value is proven but implementation remains low. These represent your highest-ROI opportunities—areas where investment can generate demonstrable returns that fund further expansion.

3. What will happen when digital requirements move from conversation to contract terms?

Today, 92% of CDMOs hear about digital capabilities in sponsor discussions, but it hasn't reached deal-breaking status. That gap is narrowing. Early movers who crack sponsor connectivity will capture outsized value as expectations shift from preferences to requirements.

These questions barely scratch the surface of the strategic planning framework detailed in the complete survey report.

The Opportunity Window Is Closing

We're in a pivotal transition moment for contract development and manufacturing. The timeline is compressing. What seemed like a long-term competitive differentiator 18 months ago is rapidly becoming table stakes.

Consider this: While the majority of CDMOs are still figuring out foundational digitization, sponsors are already discussing integration requirements. The organizations that move now—that build the infrastructure for real-time data sharing, automated quality processes, and AI-enabled operations—will be positioned to capture value when the market shifts.

And make no mistake: the market is shifting.

The survey data points to 2025-2026 as a critical window. Organizations are setting priorities, allocating budgets, and making strategic bets that will determine their competitive position for years to come.

The question isn't whether to invest in digital maturity. The question is whether you'll be a leader or a follower, and whether you can afford to fall further behind while the gap widens.

Download the Full Report

Ready to understand exactly where your organization stands and what actions to take? The complete survey report provides:

• The full CDMO Digital Maturity Index showing the five maturity levels and where your organization likely falls based on current capabilities.
• Detailed AI maturity assessment framework with timeline projections showing when CDMOs expect to realize value from AI investments.
• The complete Impact vs. Implementation matrix for more than 10 AI applications, revealing which technologies promise the highest ROI with the least deployment friction.
• Specific lessons from digital leaders including the transformation methodology that separates successful implementations from stalled initiatives.
• Exact data on sponsor digital requirements and integration expectations, including which capabilities matter most in contract negotiations.
• The top three strategic priorities CDMOs are tackling in 2025-2026 to close the digital divide.
• Full survey analysis from 50-plus global contract manufacturers across revenue levels and geographies, providing benchmarks for your strategic planning.

Access the complete "AI + Digital Maturity in Contract Development and Manufacturing" report now.

Which Side of the Divide Will You Be On?

This comprehensive research from MasterControl and PharmaSource provides the roadmap contract manufacturers need to navigate digital transformation in a regulated environment. It's based on real data from organizations facing the same challenges, constraints, and opportunities as yours.

The gap between digital leaders and laggards is widening. Sponsor expectations are evolving. The competitive landscape is shifting beneath our feet.

The only question that matters now is: Which side of the digital divide will your organization be on when the window closes?

Download your copy of the survey report and get the insights you need to make informed decisions about your digital transformation strategy.

The "AI + Digital Maturity in Contract Development and Manufacturing" survey report is a collaboration between MasterControl and PharmaSource, featuring insights from 50-plus global CDMOs across revenue sizes, geographies, and maturity levels.