Retailers lead rise in IT spending growth


Retailers lead rise in IT spending growth

Lindsay Clark

Retailers and business services firms are leading the growth in IT spending in the UK, as organisations step up their investment in online commerce and knowledge management systems.

The latest Computer Weekly/Kew Associates research shows that retailing, wholesaling, hotels and catering firms increased their IT spending at a rate of 7.6% over the 12 months to the end of March.

These sectors are investing in IT at a higher rate than the rest of the economy, which saw IT spending increase by 5.5% in the past year, up from 5.2% a year ago, the research reveals.

The upturn in retail investment comes as major retailers invest in developing internet sales operations and improving the management and efficiency of supply chains.

Last month, Marks & Spencer became the latest retailer to increase its supply chain and technology spending. Spending rose from £39m to £114m over the past year, and online sales grew by 60% to £160m.

“Not only are they improving the customers’ online shopping experiences, retailers are internet-enabling their back office and supply chains to ensure that the customer receives the best possible service – something that people are responding to by digging deeper into their pockets,” said David Roberts, chief executive of IT directors group The Corporate IT Forum.

Business services, which include accountancy, legal and advertising companies, are also increasing IT budgets, with the rate of spending growth rising to 7.8% over the past 12 months.

Malcolm Simms, IT director at international law firm Eversheds, said the sector was taking a more mature approach to IT investment. The firm is consolidating two datacentres through an outsourcing agreement with Computacenter.

It is also working on an application strategy that would give its lawyers access to cases via an Outlook interface from anywhere in the world. “You could say it was a little bit of catch up, but we will have datacentres that are up there with the best,” Simms said.

Financial services has experienced below average growth of 4.8%, down from 6.5% the previous year. IT spending in the insurance sector was only growing at 2.4%.

“Financial services spent any investment necessary to comply with Sarbanes-Oxley. Having done so, they have now blown the money and there is no reason to spend yet more,” said Philip Virgo, strategic adviser at the Institute for the Management of Information Systems.

IT spend of industry sectors >>

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