Tightfisted Budgets Loosen a Bit

Yet the economy continues to cast a shadow of uncertainty over the best-laid tech spending plans.

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Eye-opening performance

In Animas' case, increased spending was motivated by IT's performance in 2007. When the insulin-pump manufacturer was purchased by Johnson & Johnson in 2006, much of IT was outsourced, and the remaining 10 full-time staff members were senior-level people who understood both technology and the medical device market, Butoi-Teodorescu says.

Apparently, the new model is working well. Last year, the IT group worked with various Animas departments on streamlining business processes, delivering more than 20 projects that were mostly within budget, according to Butoi-Teodorescu. "And many had strong ROIs - 2007 was a good year for us," he says.

This year, armed with more people and more money, Butoi-Teodorescu plans to continue automating processes with additional departments, but much of next year's investment will be in Web commerce, he says. For instance, he plans to further refine the company's business-to-consumer Web sales capabilities in the U.S. and to initiate business-to-business Web ordering, where Animas sells through distributors.

Marvair is another organization that experienced an awakening of sorts to what IT can offer, particularly to a small business. Marvair -- a $30 million division of Airxcel Inc., a privately held manufacturer in Wichita, Kan. - makes HVAC equipment for commercial and specialty applications. Over the past couple of years, business has been flat, which resulted in Marvair's bare-bones IT spending, says IT manager Mike Ramsey. But in 2006, its annual audit revealed that IT spending was well below the norm for a company of its size.

"That opened a lot of eyes in higher management," he says. "They're starting to see that they have to spend in IT when the business is focused around an enterprise-size ERP system." Marvair uses an ERP system from Infor Global Solutions Inc. Right now, Ramsey says, the company isn't fully utilizing the software's capabilities, so "we're now looking at ways of getting more out of the system we have and adding to it."

It helps that within the past three years, Marvair has hired people in IT who are business-savvy and able to get more involved with the people who use the ERP system. "We see what other companies are doing and bring that back to the business managers, and slowly, the wheels begin to turn," Ramsey says.

In 2008, Marvair plans to update its aging desktop systems and network infrastructure, increasing its wireless capabilities, among other things. It will also invest in automating inventory control, adding bar-code scanning and integrating that system with its ERP software.

Emcor Facilities Services (EFS) is another company that was inspired to maximize its ERP investment. It did that by upgrading its J.D. Edwards system and integrating it with its enterprise asset management and customer support systems, according to Peter Baker, vice president of IT at EFS, a subsidiary of Emcor Group Inc., a $5 billion speciality construction and facilities management company. Because of the ERP upgrade, Baker is looking at a 2008 budget increase. But this year's increase is smaller than the one Baker got last year, which was EFS's catch-up year.

"We had quite a bit of stuff that had been languishing, so we had a lot of projects on our plate," he says. Baker also plans to enhance EFS's Web delivery tools so customers can request services and check the status of their accounts over the Web.

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