IT in Manufacturing Hit Hardest by Recession, Report Says
An ongoing survey of IT effectiveness for midmarket
businesses has released preliminary analysis of how the recession has impacted
IT projects in various industries. Survey results indicate the manufacturing
industry has been hit hardest, with 66 percent of respondents delaying, halting
or canceling IT projects, and a like number reducing capital expenses during
the past year. The IT Effectiveness Index, comprised of partners such as
Microsoft, HostSearch and the research firm Yankee Group, is a benchmarking
tool that measures the technology effectiveness of small to medium-sized
businesses (SMBs) throughout the world.
The manufacturing industry is followed by communications at
55 percent, wholesale at 52 percent and service providers at 48 percent. The
computer industry appears to be least affected among survey respondents, with
only 33 percent indicating IT projects have been delayed or halted due to the
recession. According to the survey, 50 percent of manufacturing industry
respondents indicated they are understaffed or critically understaffed in their
IT operations. In contrast, 33 percent of service providers said they were
understaffed in IT, with only 24 percent of respondents in the computer
"For SMBs, technology provides a key differentiator to
support business growth," said Steve Kahan, vice president of marketing and
product management with The Planet, one of the consortium sponsors. "The
results of the survey seem to indicate that capital expense budgets have been
hit hard and adequate staffing of IT is a struggle in many industries."
The IT Effectiveness Index (IETI) published a mid-year
report this past summer based on surveying hundreds of small businesses that
indicates these companies are falling behind in IT effectiveness as economic
pressures have forced nearly half of the respondents to reduce, delay or cancel
critical IT investments. In January 2010, the ITEI Partners will publish the
SMB IT Effectiveness Index Annual Report.
This current survey follows a report from the National Federation of Independent Business (NFIB), which found small business owners face continued challenges in the economy. In terms of employment, eight percent of businesses surveyed reported unfilled job openings, unchanged from August and September. Over the next three months, 16 percent said they plan to reduce employment, and nine percent plan to create new jobs. In the last three months, eight percent of the owners increased employment, but 19 percent reduced employment (seasonally adjusted). While the NFIB noted both statistics are better than September readings, the job-generating machine is still in reverse for many small business owners.