Operational excellence: Enabling sustained growth - Spotlight on the Americas

Operational excellence:
Enabling sustained growth
Spotlight on the Americas

An Economist Intelligence Unit report
sponsored by SAP

Operational excellence: Enabling sustained growth

Preface

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


Operational excellence:
Enabling sustained growth

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


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



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.



● 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.



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. ■



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.



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


Appendix: Survey results

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
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)

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



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.
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)

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. 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)
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



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
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)
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



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
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
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
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
16 48 29 3 4



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
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
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)
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



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?
Very Successful Neither Unsuccessful Very Don’t
successful successful nor unsuccessful know Evaluating and improving overall business processes
unsuccessful
(HR, Finance, Operations and IT)
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
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)
(% 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
Other 24
22
11



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?
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 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
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.


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