Techoholics

Jul 01, 2007 9:30 PM  By

Some people may fear information technology — but not multichannel marketers.

More than half increased their IT budgets this year. And as Multichannel Merchant’s 2007 IT benchmark survey shows, they’re spending on everything from data warehouses to order management systems.

Better yet, these marketers continue to improve. When asked to list their main IT accomplishments during the past year, 58% cited systems upgrades. That’s down from 70% last year, though still high.

But it depends on company size. The figure jumps to 70% among firms with sales of more than $50 million, and falls to 53% for those below $10 million.

What else are they satisfied with? For 30%, it was installing interactive technologies for customers. This was followed by new systems in general and connecting to vendors.

However, retraining is not high on the priority list, judging by the single-digit score it received.

As for spending, 32% said IT budgets rose by a range of 1% to 10% this year, and 21% indicated hikes of more than 10%.

Still, 25% reported flat budgets. And almost 20% cited cost reduction as their crowning achievement, although that’s down from 31% last year.

The most popular technology? Order management and fulfillment systems. Next is software to enable customer relationship management, Web analytics, and warehouse management.

Considering that prices for a typical warehouse system — including hardware, software, and technical support — start around $100,000, it’s no shock that larger merchants are more likely to have one.

Meanwhile, 30% have data warehouses, 21% said they use merchandise forecasting systems, 20% employed business intelligence, and 16% used enterprise resource planning systems.

There was a three-way tie for proprietary simulation and modeling, transportation management, and materials handling systems. Each was used by 14%. Some 13% have a supply-chain management system.

Speaking of supply-chain management, more than a quarter deploy electronic data interchange (EDI). What’s that? The technology that enables operations people to interact with their vendors.

Merchants can use EDI to download a carrier’s pricing directly into their shipping applications, eliminating the need to load it by hand. And they can upload data files, contracts and photos of the freight, all of which helps them select the appropriate carrier for each job.

And Website integration? Our readers aren’t there yet. Only 25% have fully integrated systems, meaning they’re tied to the corporate infrastructure.

In contrast, 20% have a stand-alone Website with no links to corporate systems, and 45% have basic links between the two.

METHODOLOGY

Penton Media e-mailed a survey invitation March 26 to 18,925 Multichannel Merchant subscribers. Participants were selected on an nth-name basis (a representative sample of all subs). The e-mail contained an embedded URL linking recipients to the magazine’s Website, where the survey was posted. Recipients were offered a chance to win one of four $50 Amazon.com gift certificates. Follow-up e-mails were sent April 3 and April 10. By April 15, Penton Media had received 205 completed surveys; 1,214 of the outbound e-mails were undeliverable; and one survey was incomplete. The effective response rate was 1.2%.

Most popular IT systems among business-to-consumer respondents:
Order management and fulfillment 53%
Web analytics 40%
Customer relationship management 32%
Data warehouse 32%
Most popular IT systems among business-to-business respondents:
Customer relationship management 42%
Order management and fulfillment 39%
Warehouse management 33%
Data warehouse 25%

68% of survey respondents say their Website offers e-commerce capabilities

25% of respondents with annual sales of $10 million to $49.9 million cite cutting costs as one of their three most significant IT accomplishments

Business-to-business respondents’ top system purchases:
Desktop PCs and workstations 53%
Outside consulting 31%
Networking hardware 29%
Server hardware 29%

30% of hybrid respondents say 10% to 19% of their 2007 budget will be used to purchase new applications

Among respondents with sales of more than $50 million, 21% have allocated 10% to 14% of their 2007 operations budget to IT-related services