InformationWeek 500: Hard-Hit Logistics Industry Makes Deep Cuts In IT

Logistics companies spend less on IT than others, and that portion of the budget has been hit harder in this industry than in others.

"We're tightening our budget to ride this out until the economy gets better," says Dennis Polsen, executive VP of information systems at the Hub Group, a logistics broker that connects shippers with companies with merchandise that needs shipping. More than half (58%) of logistics companies surveyed in the InformationWeek 500 cut IT spending this year compared with last year, while overall only 42% of companies cut spending.

Not everyone is cutting back. Some 8% of logistics companies surveyed, compared with 21% across all sectors, are keeping IT spending constant. Logistics companies are keeping a strong focus on improving business process. Almost two-thirds (61%) say making business processes more efficient is a priority. Other priorities are lowering IT costs (42%) and getting better business intelligence to more employees more quickly (42%).

More than three quarters (77%) of CIOs in the logistics industry report to the CEO or president, which is much higher than the overall 41%. CIOs in logistics are focused on IT, with 67% having no official responsibilities outside of IT, compared with 48% across all sectors.