Cool Product Ideas Aren't Enough
With sales rebounding, manufacturers rely on technology to track operations and manage spending.
After several years of slack sales, some manufacturing companies saw demand for their products pick up this year, putting pressure on IT to more effectively track operations as well as manage spending and assets to increase market share profitably. IT systems that alert managers to specific events in their operations gained popularity. Outsourcing of development and support, something manufacturers have been doing for several years to cut costs, continues to affect hiring and planning.
Companies like Motorola Inc. have fared well. The No. 2 maker of cell-phone handsets after Nokia, Motorola has had a big success with its slim Razr phone and other mobile products. The company this month unveiled a cell phone that plays songs downloaded from Apple Computer's iTunes software. "We're looking at growth periods again" in handset and telecom markets, says Toby Redshaw, Motorola's corporate VP of IT strategy, architecture, and E-business.
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"Most companies have subjugated middleware to something you stuff in the basement," Redshaw says. Motorola doesn't look at its monitoring software as just part of the infrastructure, because it has real business value, he says.
CEO Ed Zander, who took over Motorola at the beginning of last year, has been pushing the company to be more efficient and to bring "cool, useful" products to market, Redshaw says. "That message comes straight to IT," he says. "It gives us license to be a little further out there." For Motorola's IT department, that means finding technologies that can help the company profitably gain market share by managing spending and assets. "If you're using the same technology as everybody else, it's hard to compete," Redshaw says.
One example: Motorola has built a 12-terabyte knowledge-management system used by 64,000 staffers and business partners to retain expert knowledge about technical and business problems. Employees can create work spaces for projects inside and outside the company's firewall. This year, the company added wikis and blogs to the system. They've caught on--meeting participants can now blog about a presentation while it's happening, which, Redshaw says, "lowers the fudge factor in presentations."
At Herman Miller Inc., a $1.5 billion-a-year maker of office furniture, order volumes picked up this year, says Jeff Kurburski, director of infrastructure services. But the company's IT department still is concerned with funding new projects while holding down the budget for basic services. "Our focus continues to be on reducing our maintenance costs while maintaining our existing services levels and providing more funding for new development and projects that will in turn help grow the business," he says. IT delivered: It replaced branch-office tape drives with a central storage system, rolled out an electronic replenishment system that increased inventory turns faster than once a week, and introduced wireless scanning to speed up materials delivery to its research and design center.
I.T. BUDGET BREAKDOWN
Data: InformationWeek Research
Illustration By Paul Watson