IT Deemed Critical to Manufacturing Success

Nov. 6, 2008
72% of companies surveyed plan to upgrade their systems this year

While executives of U.S. manufacturing and wholesale distribution companies reported that information technology is of increasing importance to their business operations, spending will be cut due to current economic conditions, according to a recent study by RSM McGladrey.

According to the findings, executives report that technology systems continue to play a vital role in operational and production efficiencies and security of companies in all industries. Seventy-seven percent of respondents indicate that IT is increasingly critical to their business. However, 55% say that their technology strategies are linked to their overall business plan and only 46% say that their systems are serving their operational, reporting and data analytics needs.

"When evaluating improvements that can be made to the performance of a company's IT systems, it is important to consider their current objectives as well as where they want to be in three to five years," said RSM McGladrey Managing Director Gordon Opland. "Many companies solely target their immediate needs as opposed to developing a strategic IT plan that is monitored. With the evolving nature of technology and business, this approach does not properly align IT initiatives with business needs."

With the growing concern of technological risk and security threats, both internal and external, the quality and security of IT systems has never been more important. However, only 22% of executives reported that technology was a critical risk to manage, compared to financial (68%), operational (65%), legal and regulatory (48%) and supply chain (39%) risks.

Other significant risk trends the survey identified pertain to disaster recovery and the frequency of security testing. Only 47% of respondents reported having an effective disaster recovery system in place and just 44% test their network security yearly.

Looking at the issue of upgrading technology, either through installing new systems or expanding the current technology already in place, both options saw a rise in this year's survey as 72% reported that they were upgrading their current systems, compared to 58% in 2007. In addition, 53% plan on implementing new technologies, as opposed to 44% in 2007.

To view the 2008 Information Technology Report visit:

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