RSM McGladrey annual survey shows 90 percent of manufacturing and wholesale distribution companies view IT critical to business operations

Comprehensive information technology (IT) coverage remains an issue for many companies; demand for skilled IT personnel has increased

MINNEAPOLIS (November 17, 2009) — Information technology (IT) is viewed as a critical component of business operations for nearly 90 percent of companies responding to RSM McGladrey’s 2009 Manufacturing and Wholesale Distribution (MWD) Survey. Respondents noted that IT has become vitally integrated within manufacturing and distribution environments.

Conducted this spring, RSM McGladrey’s 2009 MWD National Survey includes feedback from 923 leaders of U.S. MWD enterprises regarding their perspectives on the current state of their company and industry, and the strategies they are implementing to sustain profitability.

“IT is not only key to the business side, but is a critical part of operations,” said Tom Murphy, executive vice president, manufacturing and whole distribution for RSM McGladrey. “IT impacts the entire organization and should be a consideration of every business decision.”

Further analysis of MWD Survey results shows that, to obtain maximum value from IT investments, those investments must be linked to the company’s strategies and business plan. Eighty percent of companies represented in the survey indicate that such linkages are present. “The 20 percent that do not link IT to their strategies and business plans might be missing opportunities to realize company goals and objectives through efficient IT use and investments,” said Murphy.

While the majority of MWD Survey respondents agree that IT is a critical component, results reveal that comprehensive coverage is an issue for a number of companies. Approximately one in five respondents indicates that current systems are not meeting operational and process improvement needs; a nearly identical number indicate that current systems are not meeting reporting and data analysis needs; and, almost one in four companies indicates it does not have effective systems to communicate with customers and vendors. Among companies that report IT is a critical component of their business, one in three still reports at least one unmet need.

From a risk management standpoint, 70 percent of respondents reported having information technology disaster recovery plans in place, but only 47 percent reported having tested those plans on an annual basis. This leaves nearly a third of the companies exposed to such a disaster, and another portion which might believe they are protected but have plans that might not provide the protection expected.

Expanding the functionality of existing IT systems is viewed as a way to exponentially increase the value and utility of the system to the company. Eighty percent of companies responding to the survey indicated they have near-term IT expansion strategies in place. Ninety-three percent plan IT maintenance expenditures.

While the current economic downturn has resulted in levels of unemployment not seen since the 1980s, the demand for skilled IT personnel has increased since the 2008 MWD Survey. About 25 percent of 2009 survey respondents identify IT personnel as a hiring need, up seven percentage points from 2008.

For more information on the 2009 MWD Survey and Global Business Report, please download the RSM McGladrey 2009 Manufacturing and Wholesale Distribution National Survey Report, listen to the overview on YouTube, download the Global Business Report and/or visit the RSM McGladrey MWD blog.

MWD National Survey Research Methodology
RSM McGladrey’s 2009 Manufacturing and Wholesale Distribution National Survey was conducted from March 11 to April 13, 2009. The survey analysis includes the results of more than 920 executives and managers of U.S.-based manufacturing and wholesale distribution enterprises. The online survey was designed to assess the current state of the industry and to ascertain what steps CEOs, CFOs and other executives are taking to grow their business and stay competitive.

About RSM McGladrey
RSM McGladrey is a leading professional services firm providing accounting, tax and business consulting. RSM McGladrey operates in an alternative practice structure with McGladrey & Pullen LLP, a partner-owned CPA firm that delivers audit and attest services. Through separate and independent legal entities, they work together to serve clients’ business needs. Together, the companies rank as the fifth largest U.S. provider of accounting, tax and business consulting services (source: Accounting Today), with 8,000 professionals and associates in nearly 100 offices. RSM McGladrey Inc. and McGladrey & Pullen LLP are member firms of RSM International, an affiliation of independent accounting and consulting firms. RSM McGladrey is the official accounting, tax and business consulting firm of The PGA of America.