Inventory management is the number one area of opportunity to cut costs through IT, says an IBM survey of IT executives at the world’s largest retailers.

As competition intensifies and margins dwindle, sharing more data with suppliers so that stockholding can be reduced is a top priority, along with using IT to increase visibility of data.

Almost two-thirds of retailers questioned said data was not flowing properly across their organisations, leaving information trapped in silos.

Separately, there is a strong move towards outsourcing with the percentage of retailers’ IT budget spent on outsourcing likely to rise from 13% to about 19% in the next three years.

Spending on IT in 2002 increased by almost a fifth (17%) to 2.1% of total sales compared with 2001.