RSM McGladrey: IT is critical to well being of U.S. manufacturing, distribution companies

RSM McGladrey just released a survey indicating that while industry executives of U.S. manufacturing and wholesale distribution companies believe information technology (IT) is of increasing importance to the security and health of their business operations, spending on risk management and disaster recovery systems may be cut due to the ailing economy.


As the economy slumps, IT spending is
That's according to RSM McGladrey’s Information Technology Report , based on results of the firm’s 2008 Manufacturing and Wholesale Distribution National Survey conducted earlier this year. Executives of U.S. manufacturing and wholesale distribution companies say—no surprise here—technology systems play a vital role in operational and production efficiencies and security of companies in all industries. Yet while 77 percent of respondents say IT is more critical to their businesses now, only 55 percent say their technology strategies are linked to their overall business plan, and only 46 percent say that their systems are serving their operational, reporting, and data analytics needs.
The survey polled execs on current business conditions, growth strategies, innovation, cost management, technology initiatives, operations, and globalization.
“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,” says 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.”
• IT security risk high
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 percent of executives say technology was a critical risk to manage, compared to financial (68 percent); operational (65 percent); legal and regulatory (48 percent); and supply chain (39 percent) risks.
Qualified IT professionals in demand Underscoring the critical nature of IT, there is high demand for qualified professionals in the U.S. Among 16 skills that were listed under “hiring needs” in the survey, technology personnel ranked sixth. Larger companies have a higher demand for IT labor, while 46 percent of companies with such a need have revenues of $500 million or more. Companies with $100-500 million in revenue ranked second, with 26 percent of companies expressing a need.
Executives of printing and publishing as well as medical device companies reported that IT carried a higher level of importance than the other eight industries identified in the survey. Not surprisingly, these are the two sub-verticals that report the strongest need for tech personnel.
Upgrading IT frameworks
Given the significance of IT systems, growth in capabilities and functionality is always a key issue. There are two ways to effectively upgrade a company’s IT framework: installing new systems, or expanding the technology already in place. Both options saw a rise in this year’s survey as 72 percent of executives reported that they were upgrading their current systems, compared to 58 percent in 2007. In addition, 53 percent plan on implementing new technologies, as opposed to 44 percent in 2007.
Tech education on the rise While most executives say they will be replacing or upgrading their current systems, companies of all sizes are reducing their technology spending for the coming year. A strategy that is being considered to enhance the effectiveness of current IT systems—and to save money—is greater education. Fifty-two percent of respondents say more training is needed to fully realize the capabilities of their technology frameworks. Investing in training and education enhances the investment that companies have already made in their current systems.
“Developing a comprehensive training plan is one of the most important steps that a company can take when implementing or upgrading their IT systems,” commented Opland. “A successful training program can help ensure that you are getting full value and functionality from your systems, your personnel and your operations.”

When a recent RSM McGladrey survey asked which risks are most critical to manage, technology risks are overshadowed by threats to finance, operations, legal, and supply chain. Even though advances in system reliability are contributing to risk mitigation, the diminishing focus on technology risk management is surprising given the level of reliance on IT for continuing operations—especially in light of recent, well-publicized disruptions such as security breaches, a series of poundings delivered by Mother Nature and the ever-looming threat of terrorism.

WEBCAST Advisory
If optimizing the IT landscape is a goal for your company in 2009—whether it is to drive success in product development, to better manage security and risk, or to finally link IT to an overall business plan—you’ll want to listen in on the MBT Webcast, Optimizing Your IT Landscape for Product Development . You will learn how to overcome some of the most pressing IT challenges , and enjoy these benefits:
• Reduced time to bring products to market;
• Improved accessibility, quality, and collaboration of data for faster decision making;
• Scalable and optimized infrastructure to meet current and future demands of the application landscape while minimizing total cost of ownership; and
• Mitigation of risk and ability to rapidly adapt to change in today’s business environment.
Listen now.

No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
Safety for 18 years, warehouse maintenance tips, Ethernet and the IIoT, GAMS 2016 recap
2016 Engineering Leaders Under 40; Future vision: Where is manufacturing headed?; Electrical distribution, redefined
Strategic outsourcing delivers efficiency; Sleeve bearing clearance; Causes of water hammer; Improve air quality; Maintenance safety; GAMS preview
SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
Safety at every angle, Big Data's impact on operations, bridging the skills gap
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Driving motor efficiency; Preventing arc flash in mission critical facilities; Integrating alternative power and existing electrical systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role of plant safety and offers advice on best practices.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me