Businesses Are Optimistic about Profits; Stymied by Communications Problems: Survey Conducted by Acuity Incorporated Shows How Regional Companies Are Dealing with Economic Downturn.

Business Editors

PORTLAND, Ore.--(BUSINESS WIRE)--May 8, 2003

Despite all of the communications technologies available and in use today, lack of communication across business groups is still a major problem for companies in the Northwest.

Despite all of the millions of dollars and years of time invested in installing Enterprise Resource Planning, Customer Relationship Management, and supply chain optimization systems, companies aren't getting the expected benefits. And despite the continuing bleak economic forecast, manufacturing companies in this region are optimistic about both revenues and profits for this year and next.

These are some of the trends that emerged from a recent detailed survey of executives in industrial products, consumer products, transportation, electronics and aerospace companies. The survey was conducted over a two-month period this year by Incite Marketing for Acuity Incorporated, a Portland-based firm that provides software and systems for product development and manufacturing companies.

Lack of communication and data sharing across business groups and supply chains was seen by respondents as a major obstacle to optimizing the all-important product development process. Additionally, almost a third of respondents reported that they had no satisfactory way to re-use intellectual capital from their workforce.

"Capturing and disseminating information and knowledge is critical to competitive success today," said Acuity President Tom McKasson. "Communications technology is mature, and now very affordable. It is unfortunate that so many companies are still inhibited by poor communications."

Almost all respondents said they have ongoing strategic initiatives aimed at reducing costs, improving quality and increasing customer satisfaction. Most have implemented enterprise-wide computer systems such as ERP, CRM and supply chain collaboration systems that are touted as addressing these and other business issues, yet their satisfaction with these systems is generally low.

"What's encouraging is that most of those systems can now be fine-tuned to perform up to expectations with out-of-the-box solutions," said McKasson. "The days of time-consuming, costly customization are about over. It's now easy for even small and mid-size companies to fill in the gaps and make their technology work the way they want it to."

More than half of the participating companies reported increased profits for 2002, and 60% expect to see both revenues and profits rise in 2003 and 2004. Only 10% said they expect revenues and profits to decrease in these two years. A key to improving profitability will be a changed relationship with suppliers. Some 75 percent of respondents expect to use fewer suppliers, and to have long-term partnerships with them.

Participants in the survey were upper-level managers in companies that ranged from $5 million to over $500 million in 2002 revenues. The survey contained 44 questions designed to discover how companies are weathering the downturn in the economy. Specifically, the study was designed to elicit revenue/profit expectations and corporate spending projections for 2003; understand opportunities for improving profitability; and determine specific initiatives being taken to survive the weak economy.

"It's not all gloom and doom out there," McKasson said. "Some companies are finding that this is an excellent time to improve their market positions. The opportunities for improving processes and systems are almost unprecedented, because of the state of the economy and the newly available technology. Vendors of product development-related solutions, and in fact all kinds of software, have revised their pricing and packaging. I think most companies would be astounded at what their technology dollar will buy now."

Founded in 1993, Acuity was a pioneer in the transition from drafting table to computer in product design. Acuity helps companies optimize their product development activities, from customer requirements through the entire life cycle of the product.

Incite Marketing, a Portland-based firm, works with rapidly growing consulting and high-tech firms that want to grow their reputation and profits through marketing. Since 1994, Incite has helped service firms build their brand, increase awareness, and generate leads.

To obtain a copy of the research report, "Surviving and Thriving in the Current Economy," contact Georgie Powers at 503/221-6995 x105 or [e-mail].