I'm rethinking my view on the SIG XM5 being the right way to go.

My thinking behind that was that the 5.56mm is lacks the stopping power to reliably drop a man in one shot and that it lacks range as well and so going for a cartridge that was in-between 7.62mm and 5.56 would be better.
But looking into this a bit the XM5 has a few issues, for one thing it's effectively not an intermediate cartridge. The 6.8x51mm round is based on .308 but necked down, so the issues of 7.62 are still there that being magazine capacity and ammunition weight, it's effectively the same as 7.62 in those regards and so is being issues in 20 round magazines. Recoil is also significant and the gun itself is heavy.

Most shots fired in combat miss and of course that's okay, the key to winning a fight is in suppressing your opponent's ability to fire and move while maintaining your own. So the key to winning a fight lies in quantity not quality and the XM5 is going to suffer here due to smaller magazines and reduced ammunition load outs of the soldiers.

> The XM5 weighs 8.38 lb (3.80 kg), or 9.84 lb (4.46 kg) with a suppressor, and has a basic combat load of 140 rounds in seven 20-round magazines weighing 9.8 lb (4.4 kg). Compared to the M4A1 weighing 6.34 lb (2.88 kg) unsuppressed with a basic combat load of 210 rounds in seven 30-round magazines weighing 7.4 lb (3.4 kg), the XM5 weighs about 2 lb (0.91 kg) more and a rifleman carries roughly a 4 lb (1.8 kg) heavier load with 70 fewer rounds

From Wikipedia(yes I know but I am just doing basic research here and I doubt it's wrong regarding such things).
So yes, 70 less rounds yet 1.8kg more.

The XM5 is comparable to a 'battle rifle' not an 'assault rifle'. Even here I have my criticisms. As mentioned effectively the round is the same in regards to capacity and weight. The advantage is the cartridge itself which is steel based so enables higher pressures. But there is nothing stopping that same technology being applied to any other calibre. 

> The .277 Fury SAAMI (voluntary) MAP chamber pressure of 80,000 psi (551.6 MPa) enables a 135 grains (8.7 g) projectile muzzle velocity of 3,000 feet per second (914 m/s) from a 16-inch (406 mm) barrel.

This delivers 3,653 j. 7.62x51mm M80 FMJ weights 147gr, travels at 850m/s from a barrel length of 22 inches and delivers 3,470 j, Wikipedia lists the max pressure of the cartridge at 60,191 psi, I don't know what is used in m80 though, it seems like it might be 50,000psi going by a brief search on google.
So really the performance is basically the same even though the case is identical and the 6.8mm has 20-30,000 more PSI(though the test was from a shorter barrel).

The weight is very similar as well, a G3A3 weights 4.38kg while the XM5 weights 3.80kg with no suppressor but 4.46kg with one. The XM5 fires a very hot round from a 13 inch barrel though, so the suppressor is basically mandatory.

So then basically they should just replace the M4 with the G3. I think it would be alright as a marksman rifle but not as a replacement service rifle, even with the marksman rifle idea you would run into the debate of 6.8 vs 7.62 and it should have a longer barrel really.