Survey shows retailers increase IT spending

Survey shows retailers increase IT spending

Eva C. Komandjaja
The Jakarta Post
Jakarta

Retail companies around the world with annual revenues of more
than US$100 million, including four companies in Indonesia, spent
2.1 percent of their total sales on information technology (IT),
higher than last year's total of 1.7 percent, according to the
2003 Retail CIO Survey.

The survey, conducted by IBM Business Consulting Service in
association with Executive Technology magazine, shows that the
increase in IT spending is driven by an increased focus on
business initiatives such as outsourcing, revamping of Point-Of-
Sale (POS) systems and improved enterprise reporting and
analysis.

These initiatives are expected to deliver benefits, such as
improved customer responsiveness, greater productivity, cost
reduction and increased enterprise flexibility.

ASEAN/South Asia Consumer Packaged Goods and Retail chief
Patrick Medley said on Monday that retailers globally were
focused on improving business results through IT investment and
were increasingly aligning technology investments with their
business strategy.

This is represented by the findings that indicates 59 percent
of the retailers' main reason for increasing IT spending is
enhancing employee productivity and improving customer
satisfaction. Thirty percent of the companies surveyed are from
the Asia-Pacific region, with the remainder located in North
America and Europe.

Seventy-nine percent of the Asia-Pacific retailers have
prioritized executive reporting and analytics, while Data
Warehousing is a corporate priority, according to 75 percent of
the retailers in the region.

Nearly 40 percent of retailers are expecting to allocate at
least 20 percent or more of their IT budgets on outsourced
projects in the next three to five years. The survey indicates
that the motivation behind IT outsourcing is to reduce operating
costs as it was chosen by 37 percent of the respondents.

However, the retailers are still focused on solving
fundamental challenges, such as the lack of IT integration and
outdated POS systems.

Today's retail environment, with its increasingly competitive
intensity, unforgiving financial pressures and unpredictable
threats, requires retailers to fuse IT with business strategies
to compete effectively and survive.