Call to Action

Retailtech survey concludes that retailers are slowly realizing the value of IT

The Retail Group of PricewaterhouseCoopers LLP and RetailTech recently released a jointly developed benchmark survey ("The State of Retail Technology 2001," July 2001). The report suggests that while the retail industry is finally starting to understand the strategic value of IT, it still must follow through on these ideas with action.

The report used results from 58 responses to surveys sent to more than 350 CIOs and IT managers at U.S., Canadian, and European retail organizations. Highlights from the report include:

• The perception of the CIO's role in the retail industry is gradually changing from technical expert to "strategic planner and liaison between corporate decision makers." The majority of respondents (81 percent) said that the most critical CIO competencies for them are "business vision and strategic thinking." That same percentage also agreed that "contribution to the overall business" is the most important factor in measuring CIO performance. Yet, the survey revealed that CIOs spend only 30 percent of their time on IS and business strategy.
• With current U.S. inventory levels estimated at $1.2 trillion, industry sources predict that supply chain collaboration and synchronization could reduce levels by approximately 20 to 25 percent. Although Web-based B2B exchanges might provide such solutions, only 26 percent of respondents said their companies "have joined or plan to join an exchange," while almost as many (25 percent) said they "don't understand exchanges well enough to make an informed decision about whether to join."
• With only 2 percent of revenue earmarked for IT compared to the 8 percent average across industries, retailers find themselves playing catch-up to their partners in finance and manufacturing. Unlike the manufacturing and financial sectors, which spent the 1990s resolving internal systems dilemmas through widespread ERP implementations and are now focusing on supply chain optimization and CRM initiatives, retail has been underinvesting in IT for years.
• Although retailers recognize the strategic value of a customer-centric organization, only 27 percent consider CRM an investment priority. Most are still struggling to fix or integrate internal systems, and 64 percent consider their highest priority to be "implementing technologies such as data warehousing, data mining, and other BI systems." Integration, which many retailers consider a core competency, is the second biggest investment priority with 33 percent of respondents planning to invest in "improving integration among corporate systems."

For more survey results and insights, see www.retailtech.com/sort01.pdf.

— Michelle Nichols

In this Issue: