Vendors Need to Craft Industry-Specific IT Solutions for Successful Selling to Manufacturers, IDC Study Shows

FRAMINGHAM, MA – MAY 19, 2004 – The manufacturing industry is finally moving out of a period of intense cost-cutting and budget constraints and returning to more balanced decision-making and IT spending, a new study from IDC reveals. However, the roller-coaster of the past few years will not be forgotten soon and the role of IT in manufacturing has significantly changed. IDC believes that IT vendors targeting the manufacturing space need to craft industry-specific solutions in order to most effectively demonstrate the business value of their wares.

"More than ever, IT vendors must develop and sell solutions that are targeted at the specific pain points of the manufacturing industry," said Jessica Goepfert, program manager, IDC's U.S. IT Opportunity: Manufacturing program. "This means that vendors must expand their knowledge beyond IT and truly uncover and understand the functions, processes, and pressing business challenges of a manufacturing organization. Only then will they know what the hot buttons are and where the greatest need for a technology solution lies."

Among the key findings presented in IDC's new study are the following:

— Collaborative product development (CPD) and collaborative value chain (CVC) solutions are two industry-specific offerings targeted at manufacturers that are seeking to more efficiently manage their global operations and processes. IDC forecasts these markets to reach $11 billion and $14 respectively by billion by 2007

— Selling these solutions will require a different technique – feature and function pitches will no longer suffice

— A more complex sale, the industry-solution approach will undoubtedly be longer and involve multiple constituents

Although IDC believes that CPD and CVC solutions represent sizable markets, vendors will need to change how they sell their wares to capitalize on the opportunities. New tools and methods will be needed to overcome the perception among prospects that vendor solutions are too complex. IDC believes that IT vendors planning to enter the market with industry-specific solutions must build tight partnerships, develop compelling business cases, and create a feedback loop with end-users. In addition, IT vendors must be prepared to sell to multiple stakeholders, understand that industry-specific solution funding may compete with non-IT proposals, and recognize that a solution may not always be the answer.

This study, North American Manufacturing Sector IT Solutions Forecast, 2002-2007: The Collaborative Product Design and Collaborative Value-Chain Opportunity (IDC #31217), identifies several challenges in the manufacturing industry, and identifies two industry-specific solutions that are targeted at alleviating these pain points: collaborative product development and collaborative value chain solutions. Each opportunity is defined, sized, and forecasted. Essential guidance for selling solutions is provided in detail.

To purchase this document, call IDC's sales hotline at 508-988-7988 or email sales@idc.com.

For additional information about IDC's Vertical Markets Research Group, call Virginia Lehr at 508-935-4188 or email vlehr@idc.com.

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a division of IDG, the world's leading technology media, research, and events company. Additional information can be found at www.idc.com

All product and company names may be trademarks or registered trademarks of their respective holders.

###