Manufacturers Report Reduced Revenue Due to Poor Application Performance
October 14, 2014

Beatrice Piquer-Durand
Ipanema Technologies

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Manufacturers are struggling to deal with increasingly complex IT estates, as 83% of firms report a rise in IT complexity driven by more users, increased locations, new applications and adoption of cloud computing, according to new research from Ipanema Technologies and Loudhouse.

Set against this backdrop is a concerning rise in IT performance problems, with a third of manufacturers reporting that application downtime is on the rise, compared to just 20% of firms that have seen a reduction in application downtime over the past 12 months.

IT leaders at manufacturing firms are in agreement that application performance remains critical to their bottom line, as research suggests poorly performing IT applications result in an average reduction in overall revenue of 20%. Common business problems caused by poorly functioning IT systems over the past 12 months have included: products being shipped late (42%), lower employee productivity (42%) and customer complaints (38%).

Today, manufacturers are struggling to address these challenges as 87% of IT leaders agree that guaranteeing application performance is a priority but only 27% have confidence in their company’s ability to rollout new applications quickly and easily. A large majority (70%) of firms also confirm they do not have confidence in the ability of their firm to troubleshoot application performance problems when things do go wrong.

Manufacturing firms are facing a perfect storm of IT challenges. The business is asking CIOs to do more with less while demanding the benefits offered by new advanced applications like Unified Communications, cloud applications or Video Conferencing, which can be transformative for collaborative product design. Our research shows that as IT estates become more complex, application performance problems are on the rise and this is costing manufacturers.

The sector’s top three IT objectives include productivity improvement (70%), cost reduction (71%) and implementing new applications such as Unified Communications (66%), all of which can potentially be jeopardized by networked applications that suffer slowness or non-responsiveness. In terms of specific IT projects, the sector is heavily focused on virtualization (69%) and supply chain IT projects (60%).

As manufacturers embrace trends like Cloud Computing, Unified Communications and BYOD, IT leaders need to consider a strategy for achieving an "application performance guarantee". If not, they ultimately risk falling productivity as frustrated users find applications are increasingly slow or unavailable with the Wide Area Network struggling to handle competing demands.

About the Research: More than 400 interviews were conducted with IT decision-makers involved in networking in manufacturing organizations. The respondents’ organizations had at least 1000 employees and at least 10 sites globally linked via a Wide Area Network (WAN). Interviews were carried out in the UK, France, Germany, Italy, Spain, Benelux, Switzerland and the USA. Respondents completed a survey in H2 2014. Research was undertaken by Loudhouse, an independent research agency based in London.

Béatrice Piquer-Durand is VP of Marketing at Ipanema Technologies.

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