By  on September 27, 2007

Retailers' information technology spending will rise 2 percent this year, a modest bump compared to 2006, but not so skimpy that priority projects will be put on the back burner.

Interest remains high to exploit emerging software tools, such as product lifecycle management in the supply chain and workforce management in stores, according to the fourth annual IT spending report released Wednesday by AMR Research and the National Retail Federation's CIO Council.

Survey results, which reflect responses from 23 retail chief information officers, showed IT operational expenses dropped 4 percent in the past year thanks to efficiency gains from capital investments in networking, store hardware and packaged software; however, this year's IT labor expenses are up 7 percent over 2006.

Spending to safeguard data is up 40 percent this year, with more than half the security-compliance budget (57 percent) devoted to meeting Payment Card Industry requirements governing storage, encryption and access control of credit card information. Large retailers that process more than 6 million credit card transactions per year have until Sunday to comply or risk penalties that go into effect Oct. 1.

The AMR-NRF survey also examined cross-channel information technology spending and found 57 percent of respondents will upgrade or replace their electronic commerce technology this year and 53 percent will invest in improved customer relationship management systems.

Among supply chain technologies, product lifecycle management software gets the nod from 13 percent of respondents, whose companies will invest in the technology for the first time this year. Because an additional 39 percent of respondents are not yet using PLM, the report suggests the spending trend will continue into 2008. Radio frequency identification technology remains a low priority, according to the report, with the vast majority of respondents (87 percent) not using it at all.

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