2012 Is the Year that Manufacturing Gets SaaS-y

Over the last three years, NetSuite has been conducting benchmark surveys on the state of the business within the mid-market manufacturing industry. This year’s survey was conducted in January 2012 to understand how manufacturers were feeling about the outlook for their business for 2012.

The exciting news is that the majority of respondents reported significant optimism for growth in the future. Despite the volatile environment of 2011, more than 69% of respondents were optimistic about their prospects for the near term, with close to 94% believing the business climate will either improve or remain steady.

A majority (57%) of mid-market manufacturing businesses are focused on achieving a balance between revenue growth and cost savings, with another 32% focused on just revenue growth. Profitable growth through new products, new channels and efficient automation and streamlining of business processes is the mantra for 2012.

This optimism continues from early 2011, when our survey found that companies were focused on both revenue growth and cost savings. This year’s survey makes it clear that mid-market manufacturing companies are ready to grow their businesses sustainably in 2012.

A big change from past surveys this year is the dramatic jump in organizations looking at cloud computing technologies (SaaS applications) to achieve their objectives. About 47% of manufacturers definitely consider Software as a Service (SaaS) as an effective way to reduce expenses and make their businesses more efficient. This is a sizeable increase from the 2011 survey, in which only 27% of manufacturers had this same sentiment.

This reflects a growing embrace of the web-based SaaS model among smaller and mid-market businesses (in many industries) that lack the resources to deploy, integrate and maintain on-premise applications and is a large increase from previous surveys in which people were still evaluating SaaS.

With growth and optimism on the upswing, the greatest percentage (54%) of manufacturing businesses are planning to invest in new or upgraded business software over the next 12 months to help them achieve the key objectives identified in this survey—improved customer satisfaction, revenue growth, reduced costs, improved employee productivity, automated and streamlined processes, and the ability to access complete information to align tactical execution with strategic goals.

The mid-market manufacturing industry is decisively optimistic about its future. The priority is to grow while controlling or reducing costs and leaders are looking to boost sales efforts without dramatically increasing costs in pursuit of this objective all while reducing unnecessary overhead. All of this is resulting in the manufacturing industry continuing its push to get SaaS-y.

If you’d like to learn more, I’d encourage you to download the results of the survey.

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