IT consultants and resellers must work more closely with manufacturing companies if they are to help them fully reap the benefits of ebusiness, reveals a survey conducted by Benchmark and sponsored by business software solutions provider, Sage. Despite a looming recession, manufacturing companies will still consider investing in new technology if they can be convinced of its value and return on investment.

UK manufacturers are beginning to recognise how becoming ebusinesses means much more than just developing a website. Internet technology can also help encourage collaborative working between departments within the company and with customers and suppliers. 40% of manufacturing companies believe that using Internet technology can improve communications between departments such as production, planning and procurement. 40% also believe that becoming an ebusiness will enable greater sharing of scheduling data and provide a more effective after-sales service. This recognition of the added benefits ebusiness can bring both internally and externally to business processes, rather than just as a means of promoting the company gives IT consultants and resellers a huge opportunity to work with manufacturers on implementing new ebusiness systems.

Website penetration

The number of manufacturing companies with a website continues to increase steadily with 81% now online compared to 77% in 2000. Also more and more companies are using e-procurement (24%) as part of their normal business routine, speeding up the buying process and helping them to remain competitive.

More manufacturers (24%) are recognising the benefits of selling online with online catalogues or shopping carts being the most popular method (46%). 41% are also placing orders directly onto their ERP systems.

Barriers to future ebusiness investment

Despite the good progress made, many manufacturers still face problems when considering investment. They include cost (50%), company culture (47%) and lack of in-house resources (45%). Security remains a major concern (43%). However, only 8% of companies have actually experienced problems online so it would appear that this is just a perception – close collaboration with resellers could alleviate this problem.

The current uncertain economic climate is causing concern among manufacturers over the return on investment of ebusiness solutions. Many companies (35%) also find it difficult to convince key customers and suppliers to co-operate. Clear and concise guidance from resellers is needed to help manufacturers understand the direct benefits new investment can bring to the business which in turn will help them convince their key partners that the investment is worthwhile.

Commenting on the research, Bill Hill, Sage’s business development manager for vertical markets says, “It’s very encouraging to see more and more manufacturers recognising the immediate and future benefits that implementing an ebusiness solution can bring to their business. However, many still find it difficult to convince customers, suppliers and internal stakeholders that further investment in ebusiness is a sound proposition. IT consultants, with their knowledge and expertise are ideally placed to advise manufacturers on the specific benefits ebusiness can deliver. However, they need to be able to articulate this information as concrete business benefits rather than IT jargon.”

Phil Blatchford is managing director for Panacea Ltd, a leading corporate Sage reseller based in Basingstoke. Commenting on the research findings he said, “Organisations who are thinking through their business practices are seeing immense value, not always in improved sales, but certainly in enhanced or personalised customer service and cost savings. Our experience is that clients really want to provide new and improved methods of doing business, particularly in their business to business relationships.”

Benchmark conducted the survey among 1831 manufacturing companies with over 50 employees, between August and November 2001.

Notes to editors

Sage Vertical Market Development Manager, Bill Hill is available to comment further on this subject. Please call Suzy Goulding/Lindsey McKenna on 0191 255 3000 to arrange an interview date.

About Sage

Sage (UK) Ltd is a subsidiary of The Sage Group plc, a leading international supplier of business management solutions. Formed in 1981, the Group was floated on the stock exchange in 1989 and now employs over 5,000 people worldwide in its market leading companies throughout Europe and the USA

For more information contact:

Suzy Goulding/Lindsey McKenna
Sage Press Office
Tel: (0191) 255 3000
Email: suzy.goulding@sage.com/lindsey.mckenna@sage.com

Or alternatively, please go to the Sage website at www.uk.sage.com/ses