ERP & Enterprise Systems

2008 will continue to be a year of volatility and uncertainty for the global market, questioning the future of U.S. manufacturing. How do leaders continue to produce above-average results, and what can they learn from their peers? Are line of business and IT aligned in their 2008 strategies, and are they making wise IT investments? This article will provide insights into best practices, while reviewing the results of the recent AMR Research IT spending survey.

Our “U.S. Enterprise IT Spending Report, 2007-2008” shows an 8% increase in IT spending across industries and that customer management will be replaced by business intelligence and performance management (BI/PM) as the single most important initiative by 2010.

How will industrial manufacturers invest in IT?

In the industrial manufacturing sector, we anticipate a 6.4% increase in IT spending, which is slightly lower than the average increase of 8%. None of the industrial respondents anticipate a decrease in spending, with 78% saying it will increase.

Spending will be fairly equally split between operational costs (56%) and capital expenditures (44%). To support the business, this spending will be spread across maintenance (44%), transformation (29%), and expansion (27%).

Struggles to utilize and analyze data keep people up at night

Last year, 36% said application of lean practices was their top priority, which was replaced this year by better utilization of data. What this means is that complexity is increasing as global pressures intensify, products proliferate, and costs increase. The top three items influencing IT spending confirm this:

• Better utilization and analysis of data throughout the organization
• Best practices replicated across the organization
• Improved efficiencies and lowered costs

Why is data such an issue? To supply chain practitioners, better utilization of data means getting it in a useable form, using it to impact performance, and having the ability and flexibility to get to the data without having to ask IT for a report. For IT, data challenges are exacerbated by disparate systems and master data management (MDM) problems. Unfortunately, we still see IT, rather than a cross-functional team, dealing with MDM.

The demand-driven journey for industrial manufacturers

These top initiatives are aligned with the trends we see in large, diverse industrial organizations as they begin to recognize the opportunities and efficiencies that can be gained from global consistency and standardization.

For more information on this topic, or to read similar research, visit www.amrresearch.com.