Bespoke supply chain systems push wholesalers’ IT spend 40% above the average

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 non-food wholesalers.

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 non-food wholesalers.

Like their counterparts specialising in food wholesaling (Read article: Food wholesalers spend heavily on IT), non-food wholesalers spend significantly more than the UK-wide business average on IT, with larger wholesale firms investing heavily in bespoke systems to manage their supply chains.

Large non-food wholesalers spend an average of £14,177 per desktop each year on IT – over 40% more than the all-industry average of £8,455. This trend continues in smaller non-food wholesalers, which spend £5,018 per desktop – 38% more than the UK average for small and medium-sized enterprises of £3,132.

At £3,041, spending on hardware by large non-food wholesalers is almost double the industry average of £1,611, and software spending, at £1,635, is also far higher than the UK average.

The high spending on staff relative to other industries, and a less marked emphasis on IT services, illustrates the extent to which large wholesalers are committed to in-house IT, particularly in supply chain logistics, which is a key competitive differentiator for firms.

Indeed, supply chain efficiency is crucial to wholesalers, and IT is playing an ever-bigger role in this area. E-procurement initiatives are on the increase, and supplier agreements are being monitored in real time and optimised by all the leading players.

Warehouse operations are also being consolidated and rationalised, helped by the establishment of powerful datawarehouses to improve the analysis and tracking of goods. Another area of IT development among wholesalers is mobile working, which is beginning to enhance productivity and improve customer service.

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

Comment on this article: computer.weekly@rbi.co.uk

 

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