The latest research report from IDC showed that chemical companies all around the world are expected to spend 5.1 percent more than last year on information technology (IT) this year which could reach to 7.5 billion US dollars. The trend of economic globalization and the needs to continuously increase productivity will go on to be two major momentums to promote IT investments of global chemical companies in this year.
Chemical industry is one of industries that widely apply information technology, as well as an important target industry of informationalization. In recent years the investment on information technology (IT) by chemical enterprises around world is increasing continuously. Nick, a project manager of manufacturing industry analyzing company said that the current IT investments of chemical industry mainly concentrated to manage the increasingly complex supply chain, maintain profitability under the circumstances of fluctuating price of raw materials and increased competitive pressures and face the severe challenges of adapting to environmental protection laws and regulations and so on.
Supply chain complexity triggered by the trend of globalization gives rise to the increasing demands for third-party logistics, which undoubtedly adds a lot more tedious work to supply chain management. To construct an IT platform for supply chain management in enterprises is becoming a good solution to enhance the efficiency of chemical enterprises and also a sharp edge for multinationals to participate in international competition. So far in this year oil prices break records constantly, major chemical giants complain incessantly about the shrink profits caused by increased raw material prices, so the implementation of information technology is conducive to improving the management level of production, reducing inventory, saving money and occupation of the means of production, thereby reduce production costs. The comprehensive application of automation technology, information technology, network technology and other high and new technologies can improve production, management and technical development level, ensure security and the promotion of the implementation of environmental protection laws and regulations, and effectively improve the enterprises ability to resist risks.
According to IDC, in 2008 about 48 percent of the IT budget for chemical companies will be used for software or hardware implementation and upgrading support, financial outsourcing and other applications. The new software expenditures will account for about 34 percent of the total IT expense, and hardware investments will account for around 18 percent of the total IT expenditure.
The fastest growing sector in IT spending is for software investment budget, which grows by 8.6% comparing with 2007, and the investment will be mainly in the supply chain management (SCM), enterprise assets and business performance management, procurement and sales automation software. Expenditures for the hardware will be slightly reduced, which will be focused on the terminal storage facilities and customer facilities, such as servers and routers and other network infrastructures. Expenditures for telecommunications are expected to grow, particularly in the area of wireless data. In addition, investment in the new application areas will be the least in 2008, such as service-oriented architecture, software services, and open source software.
However, according to Bierbeierke, the Research Manager of the Boston-based AMR Research company who are responsible for researching chemical, metal and mineral businesses said, global chemical companies¡¯ IT budget will be only 2.5 percent of the total income this year. According to their study, in 2008 some 40 percent of IT budgets in chemical companies will be used to run businesses such as network infrastructure, hardware, telecommunications, as well as the core accounting and financial functions. The other 60% of the budget will be used to generate new growth such as product life-cycle management, business intelligence and consumer relationship management software.
