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Manufacturers expect IT budgets to rise

Manufacturers expect IT budgets to rise

Survey confirms that manufacturers are extending the value from their ERP systems

Manufacturers in New Zealand and Australia are planning to ramp up their investments in information technology in the coming year. A sample taken from a global survey of 530 manufacturers across 40 countries revealed that 38 per cent of ANZ manufacturers plan to deploy e-commerce solutions and almost another 27 per cent are planning customer relationship management projects in the coming year. The Global Manufacturing Survey 2002, sponsored by manufacturing IT vendor, SSA Global Technologies, showed that 56 per cent of CIOs worldwide expect to have bigger budgets next financial year. Findings in ANZ were even more positive, with 62 per cent of senior IT managers who responded expecting budget increases. Conversely, only one in eight ANZ manufacturers anticipate a contraction.

Similar outcomes were found both globally and in ANZ. The desire to extend enterprise resource planning (ERP) investments by implementing surrounding technologies such as CRM, e-commerce, business intelligence and supply chain is alive and well.

Although more than a third of ANZ respondents have extended their applications beyond ERP and are clearly the world leaders, the desire to continue to extend has not diminished. Approximately 47 per cent of ANZ participants said they planned to deploy a new application in the budget year ahead.

The survey asked 20 key questions of senior technology managers in manufacturing worldwide to determine their historic and future spending patterns on enterprise application software. Globally respondents controlled a total budget of approximately US$1.04 billion. ANZ respondents collectively represented an annual spend of more than AU$170 million (Exchange rate of AU$1 = US$0.54 used for extrapolation), with the majority working in mid to larger-size manufacturers by world standards. About 92% of the ANZ sites surveyed have fewer than 500 users and 90% have an annual IT budget of less than US$5 million.

“We have found that the vast majority of manufacturers have not yet deployed a full suite of enterprise applications,” said Martin Ambrose, regional president SSA GT Asia Pacific Japan (APJ). “ERP is widely deployed as the first manufacturing enterprise application but even financial planning & forecasting software still has a long way to go.”

“What the survey is showing is a real enthusiasm for customer facing applications such as CRM and e-commerce worldwide, as the need for differentiation in more competitive markets increase,” says Ambrose.

ANZ manufacturers have very optimistic views of budget plans next year. Over 60 per cent of respondents anticipate increases in IT spend of 5 to 10 per cent. Similarly, the Asia Pacific Japan region overall is optimistic with a third of respondents anticipating moderate increases of 5 to 10 per cent and about 25 per cent expecting their budgets to rise by more than 10 per cent.

“Overall, IT managers in manufacturing organisations appear to be preparing to invest in sophisticated technology infrastructure over the next financial year,” said Mr Ambrose.

The global survey and ANZ sample were based on responses from senior technology managers in the manufacturing sector. Globally the survey represented nearly 200,000 users. In ANZ the findings were based on more than 10,200 users in the manufacturing sector.

The survey was developed to give senior technology managers and their manufacturing colleagues a basis for benchmarking their budgets and application deployments against others in the sector.

SSA Global Technologies is a leading provider of enterprise software and services to the world's industrial sector companies with a focus in the automotive supply, consumer goods, pharmaceutical/chemical and general manufacturing industries.

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