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Information security and data security

Non-U.S. manufacturers finding greater success in IT implementation

From enhancing customer service with personalized solutions to increasing efficiencies in production and distribution, manufacturers are making strategic use of technology in a range of services as well as management and production tools. Yet the investments made by non-U.S. companies show more diversity and are achieving a greater percentage of successful implementation than investments made by U.S. companies (see Figure 1).

These are some of the findings from the 2015 Monitor and the insights of RSM's professionals regarding the issues and strategies driving global growth for middle-market companies. Participants were primarily C-level executives, of whom 65 percent represent companies based in the United States, with the remainder from companies based throughout Asia, Europe, Brazil, Canada and Mexico.

It is worth noting that among those participating in the 2015 Monitor survey, overall business conditions were virtually identical across the board. That is, while sales and employment figures varied among companies, the aggregate in the United States and abroad had a similar percentage of thriving (36 percent), holding steady (56 percent) and declining (9 percent) companies. They have experienced healthy profits (a median of 8 percent for U.S. companies, 10 percent for non-U.S.) and expect strong profits in the coming year. This suggests that there are fundamental differences in business strategies at play.

A tech wake-up call

During the economic downturn, technology-based initiatives often did not have budget allocated to keep them up to date. Without consistent upgrades and IT investment, the legacy systems at many companies quickly became outdated.

Yet despite the growing strength of the current economy, U.S. companies, by and large, dedicate only about 3.3 percent of revenue to technology. Even in an era of high-profile and costly information breaches, companies overall only invest roughly 6 percent of total IT spending on security and risk management. These companies lose advantages they may otherwise have over competitors who implemented upgrades as new technologies became available.

Technology is a conduit to a transformational process. "More companies now have a global footprint, and it is critical to access real-time information and create integrated workflow based on the business and not on product constraints," notes Steve Ems, a principal in RSM's consulting services practice.

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Methodology

The 2015 RSM Manufacturing & Distribution Monitor was conducted using an online questionnaire promoted by RSM, industry associations, and a research panel organization to manufacturing and distribution companies. There were 1,660 total valid respondents to the 2015 Monitor survey, with completed questionnaires received in March and April 2015. Responses were received by The MPI Group, an independent research firm, and then entered into a database, edited and cleansed where necessary to ensure answers were plausible. All respondent answers to the 2015 RSM Manufacturing & Distribution Monitor survey are confidential. As an incentive to complete the study, participants that provided contact information are being provided a customized benchmark report.

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Steve Menaker 
National Industrial Products Practice Leader

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