IT: What’s behind the auto-parts IT gap?
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Manufacturing News, Source : The Manufacturer US
Published : 17 Jul 2006 15:07
Deloitte Consulting and the Original Equipment Suppliers Association (OESA) have surveyed auto parts suppliers, and found that they spend 56 percent less on information technology (IT) than their manufacturing peers. Is IT simply less a priority for automotive?
“There’s just a lot going on in their market space, and they’re under tremendous cost pressures,” said Jeff Glueck, a partner at Deloitte. They do indeed, with the Big Three shrinking, industry-specific IT-intensive requirements like warranty management in their loads, and Sarbanes-Oxley sapping IT budgets. The result: half of suppliers reported suffering an IT skills gap, and 40 percent confessed that only half or some IT projects are finished on time.
The gap arises, believes Glueck, because only 20 percent of respondents view IT as a business partner while 59 percent see IT as a “service provider,” that supports the organization.
“[IT groups] need to successfully partner with the business, to take some sense of ownership, accountability and responsibility for process innovations,” says Glueck, “thinking, ‘how can I leverage those investments around Sarbox and make them provide dividends back to the business?’”
Those companies who reported a positive experience around Sarbanes-Oxley did so through IT action like rationalizing applications and better IT governance. “So Sarbox cost them, but they saw an opportunity to save dollars if they did it correctly.
Also true, IT must prove its value. Less than half of companies surveyed measure the business value of IT investments, or levels of internal customer satisfaction.
“At the heart of it is understanding, how are you creating value for your business opportunities, and making sure you have metrics that are aligned to your shareholder value creation.”
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