For retailers' IT departments, the biggest barrier to improving corporate efficiency is a lack of skilled people.
In research released this week, 53 percent of retailers said insufficient skills is the top IT obstacle. Respondents cited a lack of analytical tools and technology (37 percent); spaghetti application architecture (36 percent); and inadequate data management systems (34 percent) as the next three highest ranked obstacles, according to the latest Retail Technology Study conducted by Gartner and RIS News.
The skills gap, in turn, is contributing to a surge in outsourcing. The most common functions that retailers need help from outside firms to handle are IT consulting (39 percent), application development (37 percent), Web site maintenance and hosting (34 percent) and application maintenance (33 percent).
Meanwhile, customer-facing projects are a top priority for retailers, which are struggling to meet high customer expectations, according to the study. Over the next 18 months, retailers will focus on providing their associates with better tools (43 percent); delivering more targeted promotions (41 percent); customer intelligence analysis (39 percent); and speeding up checkouts (35 percent).
Also on retailers' shopping lists are tools to assist merchandising. Almost 40 percent of respondents plan to start a major project to upgrade their sales forecasting capabilities this year or within the next two years. Other merchandising-related projects due to be launched target assortment planning (37 percent); price optimization (36 percent) and item allocation (34 percent).
On the network front, researchers report a sharp uptake in network activity will emerge over the next few years -- but retailers are going to have to strengthen their network knowledge if they are to make the best investments.
One-third of retailers surveyed have already started or will start in 2006 a major voice/data convergence project, according to the Retail Technology Study. Other network projects already in the works or due to begin this year include in-store wireless LANs (27 percent) and high bandwidth to stores (22 percent).
"Creating a smart networking strategy, which is an area many retailers don't understand well, is a great place to improve operations and help drive down costs, a win-win scenario that few have yet to take advantage of," reads the study, which was unveiled at the Retail Systems show going on this week in Chicago.