Top 10 ticker: IDC’s predictions for 2009 put the onus for payback on IT

The consensus of Framingham, Mass.-based IDC Manufacturing Insights analysts is that IT investments will return to zero-based budgeting, demanding faster payback aligned more tightly with the business strategy.<br/>


Manufacturing in 2009 is going to be rough, but there are reasons for hope and opportunities to be seized, according to a team of analysts from Framingham, Mass.-based IDC Manufacturing Insights .

From IDC’s annual Webinar, Top 10 predictions for Manufacturing —which took placemore important than ever.

“Manufacturing is sexy again,” says Bob Parker, IDC’s VP of research.

The federal injection of capital to boost credit liquidity and to aid the automotive industry—and the potential infusion of hope inspired by the new administration—offer some relief from the oppressive fall of market confidence in the closing quarter of 2008.

“There is a psychology to every recession, and Obama showed the ability to inspire people through the election,” Parker says, and “hopefully (that ability) can be applied to the recession.”

Here is IDC’s Top 10 2009 list:

1) Exploiting tangible and intangible assets

Leading the list is the belief that companies will exploit existing tangible and intangible assets to weather the recession and best position themselves for recovery. The trend to remove assets from the ledger to boost margins that drove outsourcing during the previous decade—what Parker deems “asset arbitrage”—will be replaced by seeking to reap peak asset performance, achieve greater inventory optimization, and leverage the intangibles of brand equity and intellectual property to the maximum.

2) Zero-based IT budgets with shorter ROI
IT budgets may well come under severe review, with hardware purchases being delayed; and software projects being focused on emphasizing information over mere data to provide a more common global view that results in better, faster decisions. “Companies will want to run IT as a business,” Parker states.

3) Right-sized supply chains for “Profitable Proximity”

Companies will rethink supply chain strategies that have been driven primarily by low-cost labor metrics to better accommodate total landed costs, moving to geographically rebalance supply and demand chains.

4) Supply chain strategies support standard business approaches, modernization of decision-making

Partners and customers will be more demanding, and companies need to manage service levels and risks that threaten them—including assisting suppliers with risk management.

5) Product life-cycle emphasis on value, reuse

Innovation once driven by a focus on single products will evolve toward greater product portfolio management that stresses reuse to reduce inventory and manufacturing retooling costs.

6) Broadly harmonized product information
Companies will seek to make more holistic product decisions that draw not only on design, but after-sales support and customer satisfaction. Greater emphasis needs to be put on harmonizing systems to standardize IT semantics and taxonomies.

7) Successful management of manufacturing assets

“Going forward, managing manufacturing assets can become quite a competitive weapon,” Parker states. “Manufacturing is sexy again.”

8) Support for the factory network of the future

Convergence of investments in digital manufacturing, modern execution platforms, and manufacturing intelligence will begin to support the factory network of the future. Lean will be baked in. Tighter integration, data standards, and better intelligence will modernize data acquisition that supports global decisions.

9) Web 2.0 tools to drive knowledge management
Better training to address aging and other workforce challenges, and the need for greater reuse of information will take advantage of low-cost, quick-return Web 2.0 tools that can contribute to long-term benefits.

10) Sustainability with focused metrics to aid benchmarking
Sustainability will increasingly become a profitability issue where‘green’ will be measured by contribution to revenues.

• Virtualization

• Unified communications

• Data mart/portal consolidation

• Open source

Four ways to save business costs with IT:

• Energy management

• Health Insurance

• e-Government

• Financial services

Source: IDC Manufacturing Insights

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