News

Above-average IT investment pays off in lower costs and supply chain efficiencies

Business Focus is a weekly column providing at-a-glance statistics and commentary on spending priorities and trends in particular sectors. This week we look at logistics and transport.

IT investment in the transport and logistics sector is well above the UK average. Large organisations in the sector spend an average of £9,805 a year per seat on IT – 16% more than the average for all industries of £8,455.

Similarly, smaller logistics and transport businesses spend an average of £3,551 per seat, compared to a UK average of £3,132.

In April, engine manufacturer Rolls-Royce demonstrated how IT investment in this area can pay off, when it reduced transport costs by 6% after introducing a logistics system.

The deployment, implemented by logistics company TNT, helped Rolls-Royce overcome a lack of visibility and control of inbound shipments, which it said was leading to shortages of production materials.

Analyst company IDC said investment in logistics systems was set to continue. Its research found that supply chain efficiency and improved customer service were the key business priorities for European transportation companies, with IT playing a central role.

Transportation companies would be focusing on supply chain efficiency, customer service enhancements and product innovation to improve their bottom line, said IDC.

Greater responsiveness from IT, human resources management and business performance monitoring would be used to boost overall business performance, it said.

Methodology

The analysis is based on Computer Weekly’s database of more than 60,000 IT budget holders, twice yearly user IT expenditure surveys, CBI/Kew senior executive surveys, government surveys, government demographic data, HM Treasury economic forecasts and Cambridge Econometrics industry sector forecasts.

Further details: www.kewassociates.co.uk

 


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