Poor decision-making environments damage competitiveness, say manufacturers

Poor decision-making environments are being cited as a critical barrier to growth by manufacturers across the globe, according to a survey of 378 manufacturers in the automotive, aerospace, high-tech electronics, and industrial equipment industries, undertaken by IDC Manufacturing Insights and sponsored by Infor.  The white paper, In Pursuit of Operational Excellence: Accelerating Business Change Through Next Generation ERP, highlights that in order to achieve growth, manufacturers need to analyse all available information to maximize visibility and intelligence, and assess resulting impacts on the business.  However, inadequate systems and poor data and partner integration are roadblocks to improved decision-making.

 
The white paper highlights that business processes and IT systems currently restrict the decision-making necessary for operational excellence, according to 60 percent of manufacturers, with a lack of collaborative social-networking style features in ERP systems in particular failing to create the right decision-making environment.  When asked for a wish-list of features, manufacturers cite faster business processes, real-time information and collaboration as key to improved working practices and better decisions.   
 
The research was conducted in October 2011 among manufacturers in the United States, UK, France, Germany, Italy, Brazil, Australia, China, India, Japan, Qatar, Saudi Arabia, UAE, and Russia.
 
According to the white paper, the barriers to better decision-making vary across industries, with aerospace and industrial machinery industries ranking disparate data across multiple systems as the main challenge (67 per cent and 68 per cent respectively).  Automotive companies point to inadequate partner integration (77 per cent), while the high-tech electronics sector blames a lack of, or inaccurate, data (64 per cent).
 
Faster business processes (85 per cent), access to real-time information (60 percent) and improved collaboration (60 percent) are cited as key to improving decision-making environments across all regions and industries.
 
Collaboration and social networking has sharply moved up manufacturers' agendas.   While not yet considered the number one limitation - only 4 percent ranked it first place - across all rankings it emerged as the second most significant limitation of existing ERPs, heralding a new place for social ERP in the workplace for business productivity reasons. 35 percent of all respondents also claimed that mobile and social networking will completely transform the way they will work in the future.
 
Looking ahead to the next three years, speed is critical for manufacturers.  Reacting faster to changes demanded by the business, particularly in aerospace (71 percent) and hi-tech electronics (78 per cent), and streamlining processes to achieve operational excellence (72 percent) top manufacturers' wish-lists.  More detailed insight (58 percent) and improved collaboration (42 percent) also dominate short to medium term ERP needs.

Pierfrancesco Manenti, Head of IDC Manufacturing Insights, Europe, Middle East & Africa, said: "As economic growth remains slow, it seems manufacturers are responding through exercising greater speed and agility across all facets of their operations. But while organisations know that innovating quickly and responsively is key to gaining competitive advantage, they are being held back by poor decision-making environments which restrict their ability to respond quickly to demands.  Moving forward this simply won't be viable as forward-thinking companies must turn to systems which facilitate faster, collaborative decision-making to support innovative-led growth strategies."
 
Andrew Kinder, director, product marketing, Infor, commented: "It stands to reason that more informed, faster decisions equate to a better run business, and faced with low levels of growth, the need to exercise agility has never been greater. Through a combination of transactional data and contextual intelligence, technology can support not just faster, but better, more informed decisions.  It is interesting to note that for the first time, manufacturers are pointing to social networking as an integral component in facilitating stronger decision-making frameworks, with over a third suggesting that the rise of social media is enabling them to think differently, and genuinely transform the way people work."