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Fast-growing firms say IT's their edge

The fastest-growing companies in the United States attribute their competitive advantage to an edge in IT, according to a study.

The fastest-growing companies in the United States attribute their competitive advantage to an edge in IT, according to a study released today.

A PricewaterhouseCoopers survey found that 52 percent of the 436 CEOs interviewed said that their companies have a competitive edge in computer and information technology. The companies are identified as the fastest-growing U.S. businesses over the last five years.

The 'trendsetter' companies "with an IT advantage are reaping the benefits," Jim Atwell, global private equity director at Pricewaterhouse, said in a statement. "Their composite revenues have grown 20-fold over the past 5 years--45 percent faster growth than their counterparts without an IT edge. And they also tend to be larger--with 58 percent higher revenues and 56 percent more employees."

The study found that service firms lead product vendors in claiming an IT advantage, 58 percent compared to 46 percent. Fifty-seven percent of the companies surveyed report having financial analysis/cash management systems; 52 percent have sales information systems; 37 percent have sales/customer service systems; 28 percent have marketing systems; and 24 percent have customer "end user" systems. In addition, 47 percent report the Internet as being very important to their business.

Nearly all of the CEOs of the companies studied--97 percent--rated computers and information technology as important to their company's profitable business growth over the past two years, with four-fifths--or 80 percent--rating them as extremely or very important.

Companies that rated IT as extremely important to their business have grown their revenues 10-fold over the past five years, or 72 percent faster than those who did not rate it as highly, noted Atwell.

Likewise, 96 percent of the CEOs said computers and IT have generally lived up to their expectations for increased business productivity. Three-fifths--60 percent--rated IT as performing extremely or very well against their original expectation.

Although a majority of the companies studied praised IT as a business necessity, more than four-fifths--84 percent--of growing companies' CEOs now express concern about information security, an increase of 7 points from a similar study done two years ago. Nearly a third--31 percent--say security is a major concern, with this high degree of discomfort more prevalent among service than product firms--39 percent vs. 23 percent.

To address this issue, more than half of the CEOs of these companies have documented disaster recovery plans in place for IT emergencies.

Looking ahead over the next year, 32 percent of the companies surveyed said they are planning to increase their levels of investment in computers and information technology, while only 11 percent are cutting back. About 55 percent expect to continue with current IT spending levels, and the remaining 2 percent are uncertain.

The PricewaterhouseCoopers' "Trendsetter Barometer" study is developed and compiled with assistance from the opinion and economic research firm of Business Science International.