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According to a new research study released at the CIES IT Conference in Lisbon, Portugal, companies across the food retailing sector are making good progress with their use of new technologies and demonstrating the great importance of IT within their operations.

A survey on the use of IT in the sector, undertaken by KPMG International and CIES - The Food Business Forum, highlights the advances made in the past six years. However, there are still several areas in which the sector could improve its performance.

Gerry Penfold, a partner with KPMG‚s Information Risk Management practice in the UK, said, “Over the last six years, leading food retailers have succeeded in exploiting new technologies such as the Internet, e-marketplaces, storage area networks and radio frequency data transmission and have delivered real business benefits in areas such as customer service, supply chain efficiency and the cost of IT. Rather than being carried away with these successes though, there are still a few issues to be addressed.

“For example, our survey responses point to the majority of IT spending being directed at achieving short-term benefits during 2003. Many companies are adopting defensive, cost-driven strategies and taking a tougher stance with suppliers in areas such as the cost and frequency of software upgrades. However, I believe too great a short-term IT focus will actually create higher overall costs as opportunities to use IT to improve business efficiency are deferred or missed.”

Other key survey findings include:

    • Food retailers are increasing their use of packaged systems across all areas of the business. However, specialist retail solutions are preferred in many areas to integrated ERP packages, which have yet to deliver the functionality that food retailers require.

    • IT project success is still highly dependent on strong leadership, visible commitment, and participation of the business and its users.

    • Successful completion of projects has increased. However, there has also been an increase in the number of projects taking double the budgeted time and costs to complete.

    • Project performance is still predominantly measured in terms of time and cost, as opposed to outcomes and benefits.
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