Evaluation of Strategic Software Investments for the Canadian Cabinet Industry

Abstract

Manufacturing is the single largest sector of the Canadian economy, accounting for 12.7% of the nation's GDP in 2009 (Statistics Canada 2011). Over the past decade, this sector has faced numerous challenges such as a stronger Canadian dollar, increased foreign competition, and the recent decline of the US economy. One of the ways Canadian manufacturers have responded to these challenges is through increased information technology (IT) investments (Baldwin & Sabourin 2004). Wood products industries, though, generally invest much less in IT than the sector as a whole (Atrostic & Gates 2001). When wood manufacturers do invest in IT, it is often at a very basic level (Hewitt et al. 2011). Consequently, more intensive and sophisticated use of IT presents an opportunity for the cabinet industry to improve their competitive position. The first research objective was to determine the types of software products currently available to the cabinet industry and their associated functionalities. This was done using simple proportions, cluster analysis, and association rule learning. Next, a strategic analysis of which types of software applications are most important for the industry's future competitiveness was done using the analytic network process. Lastly, any large gaps between what is currently represented in the industry and what is important for future competitiveness were identified. Operations & Engineering functionalities were found in 65.7% of all observed functionalities, whereas Content, Collaborative, and CRM functionalities were found in less than 10% each. Operations & Engineering and ERM software were determined to be the most important for future competitiveness because of their contribution to the Quality strategy. While Operations & Engineering software is important for the industry, they may be overrepresented because the current market is highly saturated with these functionalities. ERM, Collaborative, and CRM software are underrepresented as their future priority is higher than their current presence. The sensitivity analysis shows that the final priorities of software applications are most sensitive to the weighting of the Customer Service strategy. If an individual firm places a high emphasis on customer service and marketing, then CRM and Collaborative software become most critical for success.