Technology spending, comparatively speaking
Technology spending varies, according to Industrial Distribution's 60th Annual Survey
By Kimberly Griffiths, Associate Editor -- Industrial Distribution, 9/1/2006
A lot has happened over the last three years, and in that time, a lot of you have embraced more technology in your distributorships, and a lot of you are still dragging your feet a bit. In celebration of the results of Industrial Distribution's 60th Annual Survey of Distributor Operations, I've pulled together the results you've given us for the technology aspect of your businesses, and compared them to the results from the last two surveys (the 59th and 58th).
Spending the moneyWhen asked whether you planned to increase or decrease your spending on technology in the next year, this year, 46 percent of you said you'd increase it, and 52 percent said you'd spend the same. Only 2 percent said they'd spend less. In 2005, 41 percent said increase, 57 percent would spend the same, and 2 percent would decrease. In 2004, 42 percent stated that they would increase their spending, while 54 percent would stay the same, and 4 percent wanted to decrease the money they put into it.
How much do you intend to increase your spending? I'll spell it out as far as the 60th goes. Of those who intend to increase the wallet output, 39 percent of you will put 11 percent to 20 percent more into the technology budget, and 38 percent will put in 1 percent to 10 percent more. Thirteen percent will increase by 21 percent to 30 percent. Two percent of you are looking to double your investment in the next 12 months.
Where, in the vast arena of technology, are you going to spend the money? Sixty-nine percent of you will invest in software; 53 percent said hardware; 32 percent indicated bar coding; 29 percent stated telecommunications; and 14 percent of you will invest in radio frequency products/solutions. Those numbers almost mirror what you all said in last year's survey: software, 68 percent; hardware, 55 percent; bar coding, 34 percent; telecommunications, 29 percent; and radio frequency, 14 percent. (These numbers add up to more than 100 percent because respondents were able to select more than one option.)
Breaking down the investmentsWhen asked which technology investment you would likely make for your business, you all noted whether you would, or have already, invested in a particular area.
Enterprise resource planning systems: In 2006, 27 percent have already invested, and 34 percent are likely to invest in the next two to three years. The rest had no response. In 2005, 18 percent of you had invested, and 29 percent planned to invest within three years. As for 2004, 13 percent had invested, and 19 percent were likely to within three years. The rest, 68 percent, had not, and would not, invest for more than three years.
Warehouse management systems: This year, 26 percent of you have already invested, while 31 percent are likely to invest soon. In 2005, 27 percent of you had already invested, and would likely invest soon. Looking at 2004, 20 percent had invested, and 31 percent would likely invest.
Customer relationship management systems: In 2006, 39 percent of you have already invested in the system, and 33 percent say that you'll likely invest within three years. Those numbers are close to '05's, which indicate that 34 percent had invested, and 26 percent would be likely to. In 2004, 33 percent had already made the investment, and 38 percent would be likely to soon.
Radio frequency identification: In this year's survey, 9 percent of you have already invested in RFID, while 40 percent of you plan to soon. In 2005, 9 percent also indicated that they had invested, and 35 percent said that they'd put money there soon. As for 2004, 9 percent (are these the same guys from the following two years?) had invested, and 23 percent would likely invest within three years.
Selling it onlineIt's no secret that the Internet, and your place on it, is growing in importance as every year passes. But making your mark as an e-commerce site is a big project, and requires significant time and investment. Therefore, the even split, in the 60th, between those of you who do, and do not, have online ordering capabilities is understandable. Fifty-two percent of you do have the ability to sell online, while 48 percent of you do not.
But how much of your sales come from the online stores? For 46 percent of you, only 1 percent to 10 percent of your yearly sales are a credit to online sales. For another 41 percent, 0 percent is the effect of online sales. Eight percent can count 11 percent to 20 percent of their online sales within their annual numbers; and 4 percent can boast that 21 percent to 30 percent of their sales numbers come from the Internet. Those numbers are similar to 2005's as well.
Of those who have an Internet shop, 53 percent of you think that your sales numbers will increase. The final 47 percent predict that their numbers will stay the same.
















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