Operational excellence: Enabling sustained growth - Spotlight on the Americas

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Are companies promoting growth through operational excellence? The results of a global EIU survey of over 900 executives at midsized companies show that most companies have adopted or are in the process of adopting an operational excellence strategy - and that such a strategy is intimately tied to their ability to grow. (Economist Intelligence Unit, 2008)

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Operational excellence: Enabling sustained growth - Spotlight on the Americas

  1. 1. Operational excellence: Enabling sustained growth Spotlight on the Americas An Economist Intelligence Unit report sponsored by SAP
  2. 2. Operational excellence: Enabling sustained growth Spotlight on the Americas Preface Operational excellence: Enabling sustained growth is an Economist Intelligence Unit report sponsored by SAP. The Economist Intelligence Unit bears sole responsibility for this report. The Economist Intelligence Unit’s editorial team conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsor. Ken Waldie was the author of the report and Dan Armstrong was the editor. Mike Kenny was responsible for layout and design. Our thanks are due to all of the survey respondents and interviewees for their time and insights. May 2008 © The Economist Intelligence Unit Limited 2008 1
  3. 3. Operational excellence: Enabling sustained growth Spotlight on the Americas Operational excellence: Enabling sustained growth Spotlight on the Americas T he Americas should be a hotbed operational excellence activity. The scientists and businessmen who first applied statistics to process improvement—Deming, Taylor and others—hailed Less than half are promoting visibility into operations by investing in enterprise resource planning (ERP) and customer relationship management (CRM) software, while more than half are doing so in the rest of the from the United States. In the 1980s, Royal Bank of world. Mid-sized companies in the Americas also lag Canada pioneered the use of customer relationship Asia-Pacific firms in revenue growth, margin growth, management (CRM) software, while Procter & Gamble customer satisfaction and new product launches. This rolled out an early business intelligence (BI) system. is despite the fact that companies in the Americas In the 1990s, Dell, Southwest, Amazon and Wal-Mart are more likely to say they recognise operational achieved dramatic growth by making their operations excellence principles in their strategy and planning. world-class. Companies in the Americas should lead Of the 946 executives who participated in the 2008 the world in growing through operational excellence. Economist Intelligence Unit operational excellence But they don’t—at least not among the universe survey sponsored by SAP, 264 (28%) were located in the of firms with US$20m through US$500m in revenues Americas. Among the Americas respondents, 235 (89%) highlighted in this study. Mid-sized companies in came from the US and Canada, while 29 (11%) came the Americas are as focused on growth as those from Latin America. This paper—one of three regional anywhere in the world, yet they lag their counterparts papers—is based on their responses as well as follow-up in achieving growth through operational excellence. interviews with senior executives in the region. About the survey In a survey completed in January 2008, the Economist Intelligence Unit USA 74% surveyed operational, financial, IT, and sales and marketing executives Canada 15% Argentina 2% around the world on the role of operational excellence in their business Brazil 3% Locations of strategies. The survey yielded 946 responses from mid-sized companies with Mexico 2% the Americas annual revenues of $20m-$500m. Nearly one-third of respondents were Other respondents from the Asia-Pacific region, followed by 28% in Western Europe and 28% Latin America 4% in the Americas. Approximately 34% of the respondents worked in finance, Source: Economist Intelligence Unit survey, 24% in marketing and sales, 23% in operations and 19% in IT. January 2008. 2 © The Economist Intelligence Unit Limited 2008
  4. 4. Operational excellence: Enabling sustained growth Spotlight on the Americas How to build an Acquisition-led growth The Americas EMEA Asia-Pacific infrastructure for growth Identifying gaps in product/service offerings that can be filled by acquisitions 54% 60% Mid-sized companies in the Americas are inclined to 59% make bold statements about their commitments to Developing more efficient processes for integration of systems of acquired companies operational excellence. But many executives admit 43% 46% that they have failed to back up these commitments 52% Developing more efficient processes for due with consistent action. As a result, their Asia-Pacific diligence of proposed acquisitions competitors have already left them behind, and now 41% 43% 52% they risk being eclipsed by firms in Eastern Europe. Implementing systems easily adapted to different Mid-sized Americas companies lag Asia-Pacific in currencies, regulatory regimes or business models 18% actions taken on every one of 11 strategies for driving 31% 27% growth included in the survey. And the EMEA region is Source: Economist Intelligence Unit survey, January 2008. rapidly overtaking the Americas, which leads it by very slight margins in only two of the 11 strategies. In interviews, executives of companies in the Regional rank of 11 overall strategies Americas described their operational excellence for driving growth strategies as works in progress. Many said that while The Americas they recognised the value of end-to-end visibility, Organic growth EMEA Asia-Pacific they had not yet fully achieved it. Others pointed to Identifying core people assets that contribute to competitive advantage cultural factors as impediments to rapidly rolling out 54% their strategies. They provided frank insights into 53% 68% the obstacles they face—and advice about how these Adding functionality to existing systems to support growth 50% hurdles might be overcome. 54% 58% Anticipating customer needs as they emerge Taking an enterprise-wide approach 46% 66% Operational excellence works best as a growth driver 62% Supporting idea development to identify, assess and when it is implemented across the enterprise. But execute opportunities for innovation less than two-thirds of Americas survey respondents 41% 40% 50% said that their companies are taking an enterprise- Providing integrated, single-view data reporting wide approach to evaluating and improving business for management decision making 29% processes, compared with almost 80% in Asia-Pacific. 33% 46% Focusing on faster time-to-market when launching new products Recognising the unique role of IT and finance 25% 38% Enhancing visibility into the value chain often requires 35% Providing individual employees with role-based information that allows investments in building and integrating ERP, CRM them to continuously innovate within their own space other technologies. And establishing performance 23% 30% 42% metrics requires expertise that often resides in the Source: Economist Intelligence Unit survey, January 2008. finance function. Yet functional specialists in IT and © The Economist Intelligence Unit Limited 2008 3
  5. 5. Operational excellence: Enabling sustained growth Spotlight on the Americas finance complain that organisational silos limit their Operational excellence-related technology scope, preventing them from pushing for innovations investments by region outside of their own turf. What technologies is your company investing in? (Choose as many as apply) The Americas EMEA Making continuous change the new status quo Asia-Pacific The Americas ranks last among the three global Integrated ERP systems 43% regions in the use of operational excellence to 41% 50% drive growth. Yet senior corporate leaders say it is Customer Relationship Management (CRM) systems difficult to promote continuous improvement among 42% 54% employees that consider their processes to be quite 59% Inventory management systems successful. Some executives say that the problem lies 37% 48% in a general tendency to resist change and a failure to 41% recognise that the status quo is not an option. Demand planning systems 36% 44% 36% Promoting ownership and accountability Production planning systems 23% Operations specialists say that empowering people to 35% 40% innovate is difficult in a setting where they see waste Business intelligence or analytics systems in their own processes but have not traditionally 20% 27% been expected to do anything about it. The solution 32% Source: Economist Intelligence Unit survey, January 2008. lies in setting up appropriate incentives and giving employees necessary information and control to improve their own processes. Adopting common data standards Enterprise-wide data standards are essential for Embracing integration and scalability breaking down silos, building linkages among The Americas ranks last of the three regions in terms departments and creating end-to-end visibility for of IT investments to support growth. As the chart senior management. However, some IT executives say at right shows, companies in the Americas lag Asia- that they cannot manage their exponentially-growing Pacific in all six categories of operational excellence data holdings because data ownership—and therefore technology, and lag EMEA in five out of six. To remain the right to set standards—is spread across the competitive, greater focus is needed on the areas with organisation. Often finance (which owns management the biggest deficits: aligning systems with business reporting) sets standards for both financial and needs, working to ensure legacy systems can be easily operational data. But regardless of who owns it, the integrated with those of acquisitions and partners, standards should be publicised and enforced. Then and building scalable systems from the ground up. people will accept the information—even come to rely About a quarter of Americas mid-sized companies say on it—and use it to make decisions. their operational systems are not sufficiently scalable, and the same proportion say that legacy systems represent a constraint on growth. 4 © The Economist Intelligence Unit Limited 2008
  6. 6. Operational excellence: Enabling sustained growth Spotlight on the Americas ● They report more investment than North American How Latin America companies in integrated ERP systems, production is different planning systems and business intelligence or analytics systems. They are also much more likely Latin American firms have an aggressive, but so far to say they are improving tracking and analysis of underdeveloped, approach to operational excellence. customer purchase patterns. While North American firms are nearly four times ● At a much higher rate than in North America, Latin as likely to have a formal operational excellence American firms are refining systems to align more strategy, Latin America is catching up quickly. More closely with business needs, reducing total cost of than 43% are in the process of developing a strategy, technology ownership, and improving IT training compared with 27% in North America. systems. North American companies have more experience ● Two-thirds say they are improving management with operational excellence than their southern visibility into operational functions and integrating counterparts. But Latin American firms report greater processes in sales, marketing, manufacturing, success in each of the four performance indicators: product development, customer service and other revenue growth, margin expansion, launches of new functional areas. And half say they are establishing products and customer satisfaction. One explanation end-to-end visibility of processes throughout the for this unexpected result is that Latin American organisation. firms operate mainly in developing markets where ● Latin American companies are nearly twice as likely operational excellence pays off even more than in as their northern counterparts to cite integration mature markets. Similar differences are seen between with outside partners as a key to growth. And they Western and Eastern Europe. say their marketing/sales teams are devoting more More specifically, Latin American mid-sized firms effort to building both external collaboration are aggressively investing in technology to support and internal integration of sales, production and operational excellence: delivery systems. © The Economist Intelligence Unit Limited 2008 5
  7. 7. Operational excellence: Enabling sustained growth Spotlight on the Americas What is operational excellence? In its simplest terms, operational intimacy. Doing things well across the lence is simple enough, execution is another excellence means consistently doing things organisation is fundamental, but most suc- matter. A drive for efficiency is implicit, but well across the value chain as a way of gain- cessful companies do one thing exceedingly this must be achieved in a coordinated way ing competitive advantage. In its broadest well and identifying and reinforcing core by building links across the organisation so terms, it is a discipline that drives corporate competitive strengths is part of operational that all functions share a harmonised set strategy. In their book The Discipline of excellence. of performance metrics. The ultimate goal Market Leadership, Michael Treacy and Fred The definition in this paper has three is a “single source of truth” where senior Wiersema suggest that operational excel- elements: executives have shared visibility into all lence is one of three “value disciplines” that ● superior performance and visibility parts of the organisation, enabling manage- a successful organisation must chose from across the value chain ment by facts. The ideal result is a high-level as its underlying operational model. ● value-added delivered to customers dashboard for senior executives with the In practice, operational excellence is a ● effective integration with external ability to drill down into different business means to achieving the other value disci- partners. functions, including operations, finance, IT, plines: product leadership and customer While the concept of operational excel- and sales and marketing. ■ 6 © The Economist Intelligence Unit Limited 2008
  8. 8. Operational excellence: Enabling sustained growth Spotlight on the Americas Conclusion G rowth is a priority among companies in the Americas, just as it is elsewhere in the world. And when asked about the impact of operational excellence initiatives, American executives admit lagging Asia-Pacific. The key to better performance lies in more consistent enterprise-wide execution of operational excellence. Companies in the Americas say they that they do help to drive growth. Over 60% say, recognise operational principles, but in interviews for instance, that investments in ERP, CRM or executives point to myriad cultural and practical other software to streamline and expose business problems. These hurdles stand in the way of driving processes have been successful or very successful in operational excellence principles into every corner of driving growth in revenues, margins and customer the value chain. satisfaction. Companies in the region need to more aggressively The problem is that mid-sized companies in the attack these obstacles if they want to avoid being Americas are falling behind those in the rest of the left behind as companies in the rest of the world— world. This is particularly true for North America, especially in the Asia-Pacific region—entrench which lags Asia-Pacific on nearly every indicator and operational excellence in their corporate cultures. manages to outperform EMEA on only a few more. More bluntly, corporate leaders need to drive the Latin America does better, exceeding world averages message through their organisations that doing one on three of four performance indicators, while still thing well isn’t good enough anymore. © The Economist Intelligence Unit Limited 2008 7
  9. 9. Operational excellence: Enabling sustained growth Spotlight on the Americas Appendix: Survey results—Americas only Between November 2007 and January 2008, the Economist Intelligence Unit conducted a global online survey of 946 senior executives from various industries, of which 216 were from the operations function. Please note that not all answers add up to 100% because of rounding or because respondents were able to provide multiple answers to some questions. In which region are you personally based? What is your primary industry? (% respondents) (% respondents) The Americas Rest of the world IT and technology 89 North America 0 12 7 11 Latin America 0 Energy – oil & gas 9 3 The 0 Asia-Pacific 0 Rest of the Transportation and travel Americas 0 Eastern Europe 10 9 5 world 0 Western Europe 70 Logistics service providers 7 3 0 Middle East 20 Consumer products - durables and Africa 5 5 Financial services 5 13 Apparel and footwear 4 4 What is your title? Automotive (% respondents) 4 4 The Americas Rest of the world Government/ Public sector 4 4 SVP/VP/Director Industrial machinery and components 29 8 4 4 Manager Pharmaceuticals 24 39 4 4 CFO/Treasurer/Comptroller Consumer products – non-durables 3 5 9 11 Education CIO/Technology director 3 2 9 5 Healthcare 3 3 Head of Business Unit Mill products (including fabricated metals, packaging, paper) 7 7 3 4 Head of Department Professional services 7 11 3 4 CEO/President/Managing director Wholesale distribution 3 4 6 8 Retail Board member 3 4 4 3 Manufacturing 2 4 Other C-level executive Construction, engineering, operations 1 5 2 7 Other Chemicals 4 6 1 5 Energy/ natural resources – non-oil & gas 1 1 Entertainment, media and publishing 1 3 Agriculture and agribusiness 1 Telecoms 2 Other 6 3 8 © The Economist Intelligence Unit Limited 2008
  10. 10. Appendix: Survey results Operational excellence: Enabling sustained growth Spotlight on the Americas 1. What is your principal functional role in your organisation? 4. Which of the following do you consider the most important (% respondents) component of operational excellence? (% respondents) 30 Operations 20 The Americas Rest of the world 29 Information 18 technology The ability to have end-to-end visibility into financial performance, The Rest operational activities and customer relationships across all business units Americas 21 Marketing 23 of the and sales and geographies world 44 46 20 Finance 39 The ability to add value for customers through the entire product lifecycle 41 40 The ability to integrate quickly with external systems and partners to facilitate collaboration and exchange 12 13 2. What are your company’s annual global revenues in US dollars? Other (% respondents) 11 16 $20m to $50m 21 Don’t know/Not applicable 11 31 $50m to $100m 29 The 31 $100m to $250m 35 Rest Americas of the 22 $250m to $500m 15 world 5. Which of the following statements best describes your company’s view of the perceived benefits of operational excellence? Select up to three. (% respondents) The Americas Rest of the world Greater efficiency 3. Which of the following statements best describes your 57 53 company’s approach to operational excellence? (% respondents) Reduced operating costs The Americas Rest of the world 56 53 We recognise the concept of operational excellence in our strategy or Increased revenues planning, but do not have a formal operational excellence strategy 53 48 38 33 Improved customer service We are in the process of developing a formal operational excellence strategy 41 41 29 30 Faster responses to changing demand We have implemented a formal operational excellence strategy 24 29 23 27 Improved regulatory compliance We do not include operational excellence in our strategy or planning 12 11 10 9 Improved ability to expand into new markets Don’t know 10 13 11 Improved customer insights to facilitate development of new products and services 10 16 Faster responses to the actions of competitors 9 7 Other 12 © The Economist Intelligence Unit Limited 2008 9
  11. 11. Appendix: Survey results Operational excellence: Enabling sustained growth Spotlight on the Americas 6. How does your company plan to grow during the next two to 8. What are the biggest obstacles to your company’s ability to three years? grow organically, in your view? Select up to two. (% respondents) (% respondents) The Americas Rest of the world The Americas Rest of the world Organically (by entering new markets, by increasing capacity, by acquiring Inability to move quickly enough to exploit market new customers or by selling more to existing customers) opportunities and challenge competitors 53 52 39 46 Both organic growth and M&A Lack of scalability of operational systems 29 30 26 26 Growth is not a priority for our company Time-to-market delays in launching new products and services 9 8 26 28 Through mergers and acquisitions Difficulty in integrating and/or expanding legacy systems 9 10 26 27 Don’t know Lack of capacity for product-line growth and 13 expansion into new geographical areas 24 26 Other 11 8 7. What are the biggest obstacles to your company in achieving Don’t know operational excellence, in your view? Select up to three. 1 4 (% respondents) The Americas Rest of the world Lack of essential people skills in critical operational areas 50 51 9. How is your company enabling future organic growth? Lack of end-to-end real-time visibility into Select all that apply. operational processes for senior management (% respondents) 34 36 The Americas Rest of the world More complexity in products, manufacturing and/or service operations Identifying core people assets that contribute to competitive advantage 28 29 54 61 Inadequate linkages among internal departmental systems Adding functionality to existing systems to support growth 27 29 50 56 Inadequate integration/collaboration with external partners Anticipating customer needs as they emerge 24 27 46 64 Shortened product life cycle and time-to-market Supporting idea development to identify, assess delays in launching new products or brands and execute opportunities for innovation 20 23 41 45 Increased geographical dispersion of internal operations Providing integrated, single-view data reporting 19 17 for management decision making Delays and/or inability in carrying out financial analysis 29 40 to support new investments Focusing on faster time-to-market when launching new products 16 15 25 37 Other Providing individual employees with role-based information that 5 6 allows them to continuously innovate within their own space Don’t know 23 37 13 Other 4 3 Don’t know 11 10 © The Economist Intelligence Unit Limited 2008
  12. 12. Appendix: Survey results Operational excellence: Enabling sustained growth Spotlight on the Americas 10. What are the biggest obstacles to your company’s ability to Question for Sales and Marketing respondents only grow through acquisitions, in your view? Select up to two. 12. How are your marketing and sales departments aligning to (% respondents) support the organisation’s strategy for growth? The Americas Rest of the world Select up to two. Inability to quickly integrate acquisitions into existing operations (% respondents) The Americas Rest of the world 36 42 Inability to identify and assess acquisition opportunities before competitors Faster responses to evolving customer needs 31 29 44 42 Inability to obtain sufficient value from Improved visibility into market demand and customer behaviors acquisitions after they are assimilated 35 32 29 32 Stronger collaboration with customers and partners Inability to manage acquisitions in unfamiliar 33 41 business lines or geographical areas More effective integration of sales, production and delivery systems 26 33 31 35 Other Better customer care 12 8 23 24 Don’t know Higher service standards 5 6 17 16 Other 3 3 11. How is your company enabling future growth through acquisitions? Select all that apply. (% respondents) The Americas Rest of the world Question for Sales and Marketing respondents only 13. What is your company doing to ensure that your marketing Identifying gaps in product/service offerings and sales systems can support your organisation’s growth that can be filled by acquisitions 54 59 strategy? Select all that apply. (% respondents) More efficient processes for integration of systems of acquired companies 43 49 The Americas Rest of the world More efficient processes for due diligence of proposed acquisitions Enhancing Customer Relationship Management systems 41 48 58 70 Implementing systems easily adapted to different Improving tracking and analysis of customer purchase patterns currencies, regulatory regimes or business models 47 44 18 29 Enabling remote access to customer information for sales teams Other 42 34 5 4 Streamlining order tracking systems Don’t know 26 35 3 7 Expanding data sharing with customers and logistics providers 25 35 Improving visibility into order fulfillment processes 23 35 Increasing billing accuracy 20 29 Other 3 5 Don’t know 1 © The Economist Intelligence Unit Limited 2008 11
  13. 13. Appendix: Survey results Operational excellence: Enabling sustained growth Spotlight on the Americas Question for Sales and Marketing respondents only Question for Finance respondents only 13a. In the previous question, you checked the following 12. How is your finance department aligning to support the actions your organisation is taking to ensure that its sales and organisation’s strategy for growth? Select all that apply. marketing systems can support its growth strategy. Which one (% respondents) of the actions you chose is the most important? The Americas Rest of the world (% respondents) Tighter control of financial assets, liabilities and cash flow The Americas Rest of the world 69 71 Enhancing Customer Relationship Management systems Faster, more relevant and more accurate financial reporting 43 55 58 71 Improving tracking and analysis of customer purchase patterns Improved due diligence to support mergers and acquisitions 24 12 13 15 Expanding data sharing with customers and logistics providers Improved ability to integrate foreign regulatory regimes 11 8 6 12 Enabling remote access to customer information for sales teams Improved ability to handle (international) financial transactions 8 7 6 14 Streamlining order tracking systems Other 7 3 2 5 Increasing billing accuracy Not applicable/Don’t know 3 5 22 Improving visibility into order fulfillment processes 3 9 Other 3 4 Question for Finance respondents only 13. What is your company doing to ensure that your financial systems can support your organisation’s growth strategy? Select all that apply. Question for Sales and Marketing respondents only (% respondents) The Americas Rest of the world 13b. What was the effect of your first-ranked choice on the following areas? Better integration of financial planning to all departmental and control systems (% respondents) 65 74 Very Successful Neither Unsuccessful Very Don’t Improved transactional efficiency, visibility and security successful successful nor unsuccessful know 58 74 unsuccessful More timely and accurate customer billing to reduce delayed receivables Promoting growth in revenues (Asia-Pacific) 40 51 14 58 22 4 1 More reliable systems for ensuring compliance and avoiding penalties Promoting growth in revenues (rest of the world) 33 44 20 54 20 3 4 More appropriate levels of granularity in financial data 31 42 Promoting growth in margins (Asia-Pacific) Improved access to financial information about acquisition targets 8 47 38 4 3 21 32 Promoting growth in margins (rest of the world) Other 10 46 34 4 6 43 Not applicable/Don’t know Increasing launches of new products and services (Asia-Pacific) 1 8 36 43 4 3 7 Increasing launches of new products and services (rest of the world) 16 48 30 4 4 Promoting higher customer satisfaction (Asia-Pacific) 28 50 20 3 Promoting higher customer satisfaction (rest of the world) 26 54 15 2 4 12 © The Economist Intelligence Unit Limited 2008
  14. 14. Appendix: Survey results Operational excellence: Enabling sustained growth Spotlight on the Americas Question for Finance respondents only Question for Operations respondents only 13a. In the previous question, you checked the following 12. How is your operational function aligning to support the actions your organisation is taking to ensure that its financial organisation’s strategy for growth? Select up to two. systems can support its growth strategy. Which one of the (% respondents) actions you chose is the most important? The Americas Rest of the world (% respondents) Improving management visibility into operational functions The Americas Rest of the world 41 40 Better integration of financial planning to all departmental and control systems Increasing operational flexibility and agility 44 43 32 37 Improved transactional efficiency, visibility and security Integrating processes across the value chain 27 28 30 28 More timely and accurate customer billing to reduce delayed receivables Creating organisational efficiencies to meet customer demand 10 13 27 30 More appropriate levels of granularity in financial data Planning for additional operational resources needed to meet customer demand 8 6 24 27 More reliable systems for ensuring compliance and avoiding penalties Building new systems with scalability in mind 4 6 23 19 Improved access to financial information about acquisition targets Ensuring that the growth strategy is supported throughout all company entities 4 5 10 11 Other Other 22 2 Question for Finance respondents only Question for Operations respondents only 13b. What was the effect of your first-ranked choice on the 13. What is your company doing to ensure that your operational following areas? systems can support your organisation’s growth strategy? (% respondents) (% respondents) Very Successful Neither Unsuccessful Very Don’t The Americas Rest of the world successful successful nor unsuccessful know unsuccessful Integrating processes in sales, marketing, manufacturing, product development, customer service and other functional areas Promoting growth in revenues (Asia-Pacific) 61 61 10 50 35 2 2 Improving visibility into customer demand, including what, where and why Promoting growth in revenues (rest of the world) 41 54 20 58 19 2 Establishing end-to-end visibility of processes throughout the organisation 39 60 Promoting growth in margins (Asia-Pacific) Improving visibility into the supply chain, including suppliers and partners 10 58 23 6 2 30 39 Promoting growth in margins (rest of the world) Other 17 57 21 3 1 12 Increasing launches of new products and services (Asia-Pacific) Not applicable/Don’t know 2 2 27 60 4 6 Increasing launches of new products and services (rest of the world) 7 35 43 52 7 Promoting higher customer satisfaction (Asia-Pacific) 13 44 42 2 Promoting higher customer satisfaction (rest of the world) 16 48 29 3 4 © The Economist Intelligence Unit Limited 2008 13
  15. 15. Appendix: Survey results Operational excellence: Enabling sustained growth Spotlight on the Americas Question for Operations respondents only Question for IT respondents only 13a. In the previous question, you checked the following 12. What is your IT department doing to support your actions your organisation is taking to ensure that its organization’s strategy for growth? Select all that apply. operational systems can support its growth strategy. Which (% respondents) one of the actions you chose is the most important? The Americas Rest of the world (% respondents) Refining systems to align more closely with business needs The Americas Rest of the world 64 78 Integrating processes in sales, marketing, manufacturing, product Expanding existing systems development, customer service and other functional areas 60 58 43 36 Enhancing end user support Establishing end-to-end visibility of processes throughout the organisation 51 64 22 29 Reducing total cost of ownership of technology Improving visibility into customer demand, including what, where and why 47 51 20 27 Devising faster and more efficient deployment processes Improving visibility into the supply chain, including suppliers and partners 45 47 15 9 Designing role-based interfaces to improve user efficiency and to control data access 28 36 Improving IT training systems Question for Operations respondents only 28 47 13b. What was the effect of your first-ranked choice on the following areas? Building in flexibility for future integration of legacy systems and systems of acquired companies and partners (% respondents) 19 37 Very Successful Neither Unsuccessful Very Don’t Building new scalable systems from the ground up successful successful nor unsuccessful know unsuccessful 15 39 Other Promoting growth in revenues (Asia-Pacific) 4 15 58 27 Promoting growth in revenues (rest of the world) 23 58 15 3 1 Question for IT respondents only Promoting growth in margins (Asia-Pacific) 13. In the previous question, you checked the following actions 11 46 39 3 1 your organisation is taking to ensure that its IT systems can Promoting growth in margins (rest of the world) support its growth strategy. Which one of the actions you chose 13 51 32 4 is the most important? (% respondents) The Americas Rest of the world Increasing launches of new products and services (Asia-Pacific) 9 43 42 5 Refining systems to align more closely with business needs Increasing launches of new products and services (rest of the world) 43 41 16 46 28 51 5 Enhancing end user support 13 10 Promoting higher customer satisfaction (Asia-Pacific) Reducing total cost of ownership of technology 16 53 27 3 1 13 5 Promoting higher customer satisfaction (rest of the world) Expanding existing systems 21 56 17 3 12 11 10 Building in flexibility for future integration of legacy systems and systems of acquired companies and partners 6 6 Designing role-based interfaces to improve user efficiency and to control data access 6 2 Devising faster and more efficient deployment processes 4 14 Building new scalable systems from the ground up 2 7 Improving IT training systems 2 8 Other 4 14 © The Economist Intelligence Unit Limited 2008
  16. 16. Appendix: Survey results Operational excellence: Enabling sustained growth Spotlight on the Americas Question for IT respondents only 15. In the previous question, you checked the following actions 13a. What was the effect of your first-ranked choice on the your organisation is taking to improve its efficiency. Which one following areas? of the actions you chose is the most important? (% respondents) (% respondents) The Americas Rest of the world Very Successful Neither Unsuccessful Very Don’t successful successful nor unsuccessful know Evaluating and improving overall business processes unsuccessful (HR, Finance, Operations and IT) Promoting growth in revenues (Asia-Pacific) 31 33 9 57 33 2 Improving internal systems/processes so your employees Promoting growth in revenues (rest of the world) can be more efficient in their daily activities 18 19 15 54 25 3 4 More effective alignment of people skills with emerging business needs Promoting growth in margins (Asia-Pacific) 16 14 11 53 32 2 2 Improving agility to adapt to business cycles, shifting Promoting growth in margins (rest of the world) customer demand and the actions of competitors 12 13 6 50 36 4 4 Transforming raw data into useful information Increasing launches of new products and services (Asia-Pacific) 9 11 4 38 51 2 4 Improving systems to make it easier for customers to work with you Increasing launches of new products and services (rest of the world) 8 9 12 41 34 71 6 Improving systems to make it easier for external partners to work with you 6 3 Promoting higher customer satisfaction (Asia-Pacific) Other 11 57 30 2 11 Promoting higher customer satisfaction (rest of the world) 21 58 17 3 2 16. What strategies has your company established to maintain profitability during periods of slow economic growth? 14. What is your company doing to improve efficiency? Select all that apply. Select all that apply. (% respondents) The Americas Rest of the world (% respondents) The Americas Rest of the world Overall aggressive cost control Evaluating and improving overall business processes 61 71 (HR, Finance, Operations and IT) Expanding into different market areas 65 74 38 41 Improving internal systems/processes so our employees Reducing staff while retaining core competencies can be more efficient in their daily activities 36 34 58 68 Aggressive pursuit of market share from competitors Transforming raw data into useful information 36 37 45 50 Innovating to create new products or services More effective alignment of people skills with emerging business needs 35 51 44 57 Increasing customer share of wallet, up-selling/cross-selling Improving systems to make it easier for customers to work with us to existing customers 40 45 31 34 Improving agility to adapt to business cycles, shifting Implementing scalable production processes customer demand and the actions of competitors 25 35 39 44 Other Improving systems to make it easier for external partners to work with us 22 30 37 Not applicable/Don’t know Other 24 22 Not applicable/Don’t know 11 © The Economist Intelligence Unit Limited 2008 15
  17. 17. Appendix: Survey results Operational excellence: Enabling sustained growth Spotlight on the Americas 17. In the previous question, you checked the following 19. In the previous question, you checked the following strategies your company established to maintain profitability technologies in which your company has invested to achieve its during periods of slow economic growth. Which one of the operational excellence goals. Which one of the technologies strategies you chose is the most important? you chose is the most important? (% respondents) (% respondents) The Americas Rest of the world The Americas Rest of the world Overall aggressive cost control Integrated ERP system (Finance & HR) 35 36 27 37 Innovating to create new products or services Business intelligence or analytics systems 17 19 20 18 Expanding into different market areas Customer Relationship Management (CRM) system 14 14 19 21 Implementing scalable production processes Inventory management systems 10 7 17 9 Increasing customer share of wallet, up-selling/cross-selling Production planning systems to existing customers 7 10 9 10 Demand planning systems Aggressive pursuit of market share from competitors 4 5 8 10 Other Reducing staff while retaining core competencies 6 2 5 6 Other 21 20. Does your company have initiatives underway to improve efficiency and drive down costs in your functional area? (% respondents) 18. Has your company invested in the following technologies to achieve its operational excellence goals? Select all that apply. 64 Yes, we have 70 (% respondents) initiatives underway to improve efficiency The Americas Rest of the world The and drive down costs Rest Inventory management systems Americas 31 No, we do not 23 of the 43 45 have any initiatives world for improving Integrated ERP system (Finance & HR) efficiency and driving 42 56 down costs Customer Relationship Management (CRM) system 5 Don’t know 7 37 45 Business intelligence or analytics systems 36 41 Production planning systems 23 38 Demand planning systems 20 29 Other 6 4 Not applicable/Don’t know 9 9 While every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd. nor the sponsor of this report can accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in the report. 16 © The Economist Intelligence Unit Limited 2008
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