Big business sees things very differently from small operations

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Leaders of technology businesses appear to be seeing their world through opposite ends of the binoculars. The majority perspective is focused inward, perceiving their sector as shaped primarily by need for careful cost management and strategies for coping with the business slowdown.

But this view is far from universal. Those with an outward perspective - who see their sector and business as driven by e-business and globalization - also expect to be rewarded with strikingly higher growth. These are findings from the latest PricewaterhouseCoopers' (PwC) Technology Barometer*.

When asked to identify the top three factors driving their business and industry sector this year, half or more of top technology business executives cited:
* cost reduction and containment (62%) and
* strategies to deal with business slowdowns (48%).

"Most technology business leaders wisely view today's uncertain economy as a compelling reason to re-examine the profitability of their operations," said Paul E. Weaver, global technology industry leader for PwC. "Although this should be an ongoing process, it is sometimes overlooked in the heat of rapid business expansion.

"There is no time like the present to review and tighten operations. It is also prime time to hone strategies for serving current and prospective customers - and to adjust plans for deployment of human and business capital."

Almost all other market drivers cited by top technology executives are of distant secondary importance: worker shortages (31%), mergers and acquisitions (27%), intellectual asset management (25%), electronic commerce and the Internet (24%), globalization (22%), and actions of the US Federal Reserve Board (21%). At the far bottom of the list is Federal tax cuts for individuals (7%).

Leaders of large technology businesses have a somewhat differing view of market drivers than their smaller counterparts. More in large businesses cite cost reduction and containment, 66% (eight points higher); mergers and acquisitions, 33% (11 points higher); and globalization, 24% (five points higher).

More leaders of smaller companies identify the worker shortage, 34% (six points higher) and actions of the Federal Reserve Board, 26% (ten points higher). "It would appear that more leaders of large businesses have identified factors they can manage, whereas in the smaller businesses, more are giving recognition to issues that have a life of their own," said Weaver.

Is there a connection between one's view of what's driving the market and success in the market?

Those citing e-commerce and the Internet as one of the top three drivers for their business and industry sector are projecting revenue growth 40% above the norm over the next 12 months; those citing globalization, 23% higher.

"It would appear that those well along in their plans for e-business and globalization are the highest of flyers. They can apparently count upon a sizeable incremental revenue contribution from these sources over the next 12 months," noted Weaver.

* PricewaterhouseCoopers' quarterly Technology Barometer focuses on rapidly growing technology businesses of all sizes. It incorporates the views of 365 top industry executives: 150 CFOs and managing directors of large, publicly-held businesses, including technology subsidiaries and divisions, and 215 CEOs from smaller, privately-held companies.
It is developed and compiled with assistance from the opinion and economic research firm of BSI Global Research, Inc..

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