E-Commerce IT Set to Grow

Online retail still packs a punch — in fact, it continues to expand and to require more IT spending. A recent Forrester Research report, “2004 Outlook For eCommerce Tech Spending,” claims that e-commerce budgets will provide most of the growth in IT outlays for this year. Forrester’s statistics show that 79% of the 212 respondent companies plan at least to maintain their sell-side e-commerce spending, and that 40% actually plan to increase spending from last year, with the retailers among them planning an average IT spending increase of 26%.

The top three categories that the respondents target for most growth are application or Web-based e-commerce software, full-time staffing for e-commerce development or support, and Internet connections and bandwidth.

Although negative images of the not-so-distant dot-com boom-and-bust era are largely dispelled among respondents, many have an e-commerce organizational legacy that has 28% of e-commerce management liable to report to a separate unit from corporate IT, and 37% reporting to a combination of corporate IT and a separate e-commerce unit.

For respondents to this study, the most important issues related directly to e-commerce customers are improving site navigation and usability (69%); enhancing online self-service (69%); getting customers to use online channels (69%); and that old favorite, systems integration — in this case, connecting e-commerce systems to back-office systems (67%).

Although respondents were able to identify some application vendors they are liable to use, most said at the time of the study (December 2003) that it was too soon to tell just which vendors they would ultimately choose.

E-Commerce Priorities for 2004 Critical Priority Highest Single Priority
Improve site navigation/usability 31% 13%
Enhance online self-service capabilities 29% 8%
Migrate customers to online channels* 33% 9%
Connect e-commerce and back-office systems 29% 12%
Improve the quality and validity of the content 29% 11%
n = 212 * n = 182 Source: Forrester Research Inc.

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