This year, Office Depot plans to install supply-chain-management and merchandise-planning applications from Retek Inc. The software will help the company work with its suppliers to complete product-assortment-planning, sales-forecasting, and price-optimization tasks, Morrison says. The retailer also will use software from Manhattan Associates to improve the efficiency of its warehouse operations, especially in Europe, where it's integrating operations with those of office-product supplier Guilbert SA, which Office Depot acquired in 2003.
Morrison's IT budget has remained relatively flat, not including major initiatives such as the supply-chain and merchandise-planning projects. The company is considering shrinking the number of IT vendors it works with, particularly companies that provide contract employees. But cost cutting, per se, isn't the goal. "The priority is to find efficiencies so we can reinvest those dollars in growth initiatives," Morrison says.
It's an increasingly common strategy to ask business-technology groups to cut costs to fund new initiatives. With 54% of executives in our Outlook study expecting total IT spending to be less than or only equal to 2003, this will be a year of both squeezing budgets and adding projects. And while hopes are high for steady improvement in the economy and a more prosperous year ahead, business-technology professionals must accept that IT investment will likely lag, rather than lead, any recovery.
-- with Rick Whiting
