Best Practices: Technology-Oriented Value Chains -- Industry Outlook and 2010 Budget Guide

Abstract

This IDC Manufacturing Insights provides an analysis of trends in the TOVC segments based on our performance index. This report also includes survey-based spending data that can be used to benchmark against. Technology-oriented value chains (TOVCs) have a physical flow of goods that are dictated by the ongoing iterating cycles of key underlying technology, such as processors, and includes segments such as semiconductors, electronic manufacturing services (EMS), high-tech equipment, and consumer electronics. These value chains can have high levels of variability in supply, manufacturing, and demand. The current economic situation will have a significant impact on companies and how they allocate IT dollars.

"TOVC segments represent industry segments that are dealing with a rapid cadence of product iterations, geographic expansion, and elevated competition. Smart IT investment in these challenging times will help position companies for the inevitable recovery." — Ben Friedman, research manager at IDC Manufacturing Insights

Table of Contents

• Manufacturing Insights Opinion
• In This Report
• Situation Overview
• Future Outlook
• Benchmark Analysis
• Specific 2010 IT Budget Information
• Essential Guidance
• Actions to Consider
• Preparing for Recovery
• The Ongoing Initiatives
• Learn More
• Related Research
• Synopsis
• Table: Worldwide External IT Spending Share by IT Segment: TOVC Versus Total Manufacturing, 2008–2010 (%)
• Table: Worldwide External IT Spending Share by Value Chain Segment, 2010 (%)
• Table: Worldwide Hardware Spending Share: TOVC Versus Total Manufacturing, 2008–2010 (%)
• Table: Worldwide Software Spending Share: TOVC Versus Total Manufacturing, 2008–2010 (%)
• Table: Worldwide Services Spending Share: TOVC Versus Total Manufacturing, 2008–2010 (%)
• Figure: Worldwide TOVC and Overall Manufacturing Industry Revenue Indices, 1Q04–2Q09
• Figure: Worldwide TOVC and Overall Manufacturing Industry Median Net Profit Margin, 1Q04–2Q09
• Figure: Worldwide TOVC and Overall Manufacturing Industry Velocity Trend, 1Q04–2Q09