A Publication of WTVP

One in five report current systems not meeting operational and process improvement needs.

Information technology (IT) is viewed as a critical component of business operations for nearly 90 percent of the companies who responded to RSM McGladrey’s 2009 Manufacturing and Wholesale Distribution (MWD) Survey. Respondents noted that IT has become vitally integrated within the manufacturing and distribution environments.

Conducted this spring, RSM McGladrey’s survey includes feedback from more than 900 leaders of U.S. MWD enterprises regarding their perspectives on the current state of their companies and industries, and the strategies they are implementing to sustain profitability.

“IT is not only key to the business side, but is a critical part of operations,” said Tom Murphy, executive vice president, manufacturing and whole distribution for RSM McGladrey. “IT impacts the entire organization and should be a consideration in every business decision.”

Further analysis of the MWD Survey results shows that, to obtain maximum value from IT investments, those investments must be linked to the company’s strategies and business plans. Eighty percent of companies represented in the survey indicate that their IT supports their strategies and business plans. “The 20 percent who do not link IT to their strategies and business plans might be missing opportunities to realize company goals and objectives through efficient IT use and investments,” said Murphy.

While the majority of MWD Survey respondents agree that IT is a critical component, results reveal that comprehensive coverage is an issue for a number of companies. Approximately one in five respondents indicated that current systems are not meeting operational and process improvement needs. A nearly identical number indicate that current systems are not meeting reporting and data analysis needs. Almost 20 percent of companies indicate they do not have effective systems to communicate with customers and vendors. Among companies that report IT is a critical component of their business, one in three still report at least one unmet need.

From a risk management standpoint, 70 percent of respondents reported having information technology disaster recovery plans in place, but only 47 percent reported testing those plans on an annual basis. This leaves nearly a third of the companies exposed to such a disaster, and another portion that might believe they are protected but have plans that may not provide the protection expected.

Expanding the functionality of existing IT systems is viewed as a way to exponentially increase the value and utility of the system to the company. Eighty percent of companies responding to the survey indicated they are working to put IT expansion strategies in place in the near future. Ninety-three percent plan IT maintenance expenditures.

While the current economic downturn has resulted in levels of unemployment not seen since the 1980s, the demand for skilled IT personnel has increased since the 2008 MWD Survey. About 25 percent of 2009 survey respondents identify IT personnel as a hiring need, up seven percent from 2008. iBi