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Australian Manufacturers Failing to Invest in Productivity Raising IT

4 December

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Australian manufacturers are failing to diversify their business using new technologies and online retail channels, a new study has found.

A sponsored survey of 102 wholesale and manufacturing companies by analyst firm Frost & Sullivan found that only 10 per cent of them are able to receive orders over the internet.

Despite this, 76 per cent said they expect an increase in online orders over the next couple of years, and 75 per cent said they see eCommerce as a potential business opportunity.

The study comes on the back of a push by US eCommerce firm, NetSuite to push Australia’s manufacturing sector into the cloud with its new enterprise resource planning (ERP) software. NetSuite commissioned the research into the Australian market from Frost & Sullivan.

Managing director of Frost & Sullivan, Mark Dougan told Technology Spectator that the challenge of eCommerce affects more than just the manufacturing sector, but it has dire implications for the industry’s productivity and competitiveness against cheaper overseas rivals, like China.

“The rationale of ERP systems is to help businesses become more efficient. Manufacturing productivity in Australia is low, by global standards,” Mr Dougan said.

“Hence Australian manufacturers need to invest in IT solutions that can make them both more efficient and more productive.”

“Ultimately that is the only way to compete against manufacturers in lower-cost locations,” he said.

This article originally appeared in Business Spectator, Sunday 1 November 2013