Top-performing mid-sized companies have different attitudes towards investments in IT, outsourcing, and production and distribution, research reveals

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2007-09-13 08:54

Hong Kong--(뉴스와이어)--Compared with their low-performing peers, high-performing mid-sized companies attach greater importance to investments in IT integration, outsourcing, sales and marketing, and plant and equipment, according to Technology and growth at mid-sized companies: The next ten years, a research study from the Economist Intelligence Unit sponsored by Oracle. The study focuses on technology as an enabler of growth at small and mid-sized companies (annual revenues of between $10m and $500m) throughout the world, both in terms of local technology infrastructure and the impact of specific investments.

“We found consistently more positive attitudes toward IT integration, as well as other aspects of IT, at companies with higher-than-average growth in revenue and profitability,” said Dan Armstrong, Senior Editor at the Economist Intelligence Unit. “This makes intuitive sense, since meeting additional demand requires strong ties among the customer support, sales, production and finance processes.”

Oracle Global SMB Business Unit Senior Vice President Tony Kender said, “This research demonstrates the fundamental role technology plays in fuelling business growth among small and medium businesses. Not only does a high level of integration emerge as a common feature in top-performing companies, but the research also shows that small and medium companies face different challenges depending on their industry. Industry-specific functionality can help companies to address these challenges.”

Key findings of the 535-respondent survey include:

· High-performing companies have several traits in common. In the area of non-IT investments, they are more likely than lower-performing companies to engage in outsourcing; to invest in sales, marketing and distribution; and to invest in plant and equipment (particularly in the manufacturing sector). In the area of IT investments, they tend to believe investment in IT has better returns than investments in other areas; to have a high level of IT integration; and to buy integrated systems rather than disparate elements.

· Investment priorities vary among industries. The survey targeted executives in six industries: financial services; consumer goods; healthcare, pharmaceuticals and biotechnology; professional services; manufacturing; and the public sector. The highest investment priorities in the public sector are knowledge management and data warehousing; in financial services and healthcare/pharmaceuticals, compliance; and in manufacturing, plant and equipment.

· The cost of software and skills poses a severe constraint on growth. Respondents said that the cost and effectiveness of the software applications needed to run today’s complex organisation represent a significant constraint on growth. Similarly, the cost and availability of talent (both IT staff and end-users) also represent a constraint, as does resistance of end-users to new technology. More than one-half of respondents say IT staff resources at their company are inadequate to meet demand.

· Software alone is not an enabler of growth. When probed as to the best single investment·IT or otherwise·for realising their key business objectives, more than two-thirds of the mid-sized businesses surveyed cite software applications. Yet, while leaders recognise the ability of software applications for helping to achieve business goals, they also acknowledge that software investments do not always realise their potential.

· CRM is a focus of technology investment. The area where executives of mid-sized firms believe technology investment would have the most positive impact on their businesses is in customer relationship management, according to survey data. This is also an area where large corporations have attempted to focus for some time in the quest to become more “customer-centric”.

About the survey

The research is based on a survey of 535 senior IT, financial and management executives at firms with annual revenues of $10m to $500m and follow-up interviews with over 20 executive decision-makers at small and mid-sized companies in Europe, Asia and North America, The survey, conducted in May of 2007 focused on six industries: financial services, consumer goods, healthcare and pharmaceuticals, professional services, manufacturing and the public sector.

About the Economist Intelligence Unit

The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper.

The Economist Intelligence Unit provides geopolitical, economic and business analysis on more than 200 countries, as well as strategic intelligence on key industries and management practices. With over 300 full-time professionals in 40 offices around the world, supported by a global network of more than 700 contributing analysts, the Economist Intelligence Unit is widely known for its unparalleled coverage of major and emerging markets. More information about the Economist Intelligence Unit can be found at www.eiu.com.

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