Technology to weather the storm

Not just recession, but M&S recession, joked The Economist in its 5 July issue. The nation's talismanic food and clothing retailer had posted...

Not just recession, but M&S recession, joked The Economist in its 5 July issue. The nation's talismanic food and clothing retailer had posted falling revenue that week and its CEO, Stuart Rose, had warned of choppy waters to come.

And yet, in the realm of IT, Marks & Spencer has announced a significant investment in the future. While acknowledging that the UK market will remain weak for the next two years, the company is betting on quickening international and online sales. International sales were up more than 16% last year, and M&S Direct, the online business hosted by Amazon, is growing at 70% a year.

And so the retailer is spending in the region of £450m on new IT over a three-year period. The company plans to develop a "modern and streamlined logistics network with new overseas warehouses, as well as offshore stockholding and consolidation facilities". These are to replace warehousing and distribution centres that have changed little since the 1970s.

An element of the strategy is to put in place a commercial strategy for (guess where?) China.

IT investment seems to be bearing up well during this year of credit crunch and incipient - at this stage still potential - recession. The achievement of the Faster Payments system, which processed more than four million transactions in June, is one index of this.

Another is the evidence from the Survey of Appointments Data and Trends for the first quarter of 2008. It registers some evidence of retrenchment in the IT jobs market, but reveals it to be healthier than it was in the first quarter of 2007. Advert­isements for permanent jobs were up 30%, and contractor positions up 14%. The survey for Q2, the results of which will be with Computer Weekly soon, may start to cloud that picture.

In the meantime, we can take succour from the forward-looking technology story in our Radar section, which reports that, thanks to the innovations in graphics chips driven by video games such as Grand Theft Auto, there might soon be a supercomputer in every home.




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