The distribution sector, including wholesalers and transportation companies, will increase IT budgets in 2004, according to a report from Forrester Research Inc., a technology research company. Thirty-three percent of companies responded that their IT budgets would increase compared to their actual spend on IT budgets in 2003, and 20% of that 33% expect their IT budgets to increase by 10% or more.

The report, “Distribution Industry IT Spending Profile For 2004,” also said spending on application software as compared to actual spending in 2003 will remain about the same for 57% of companies, with 21% spending slightly more. Oracle, PeopleSoft and SAP topped the list of Enterprise Resource Planning (ERP) vendors distribution companies have worked with in the past 12 months, but 27% of companies surveyed said they don't consider any ERP vendor as their core business application provider. Oracle followed suit with 13.1% of companies considering it their core business application provider.

Distribution companies were also asked, “When adding new functionality, what is your preferred approach?” Forty-five percent said they choose the best-of-breed vendor and integrate, 37.5% said they purchase add-on modules or services from a core provider, and 17.5% said they use custom development.

The distribution industry tops other industries such as manufacturing and retail in the adoption of RFID technology in many stages of implementation. Nearly 25% of distribution companies surveyed are currently in the production phase of RFID implementation, while only 7.9% of companies in other industries are.