LAS VEGAS -- Use of client-server technology grew fourfold in the past year, and the technology is poised for further aggressive expansion in the next two years, according to a survey of chief information officers in retailing and other industry segments.
By 1995, CIOs plan to run 57% of their business applications on client-server architectures, up from 1993's 27% and a dramatic leap from the 5% reported in both 1992 and 1991, according to the survey. When broken out as a group, retailer and distribution CIOs reported that 19% of their applications were running on client-server architecture in 1993, up from only 4% the year before.
More than 400 U.S. and Canadian information systems executives across a broad range of industries, including supermarkets, detailed their technology plans in a new survey released by Deloitte & Touche, Wilton, Conn.
"The use of client-server technology is changing the nature of the way the CIO and [information technology] organization operates in almost every aspect of business," said William Blumberg, consulting principal at Deloitte & Touche. He discussed results of the new survey during a presentation here this month at the Retail Information Systems Conference, sponsored by the National Retail Federation, Washington.
Unlike older, proprietary mainframe computer systems, client-server architecture provides more open data access and computer processing functions in a decentralized user community.
Supermarket CIOs, like their counterparts in other business segments, are struggling to learn how to best employ client-server technology, he said. However, supermarkets confront the added burden of managing the massive data collected at the point of sale.
The primary mission for supermarkets today is "more effectively
using the data they're collecting," Blumberg told SN.
"They're collecting a wealth of data at POS and I think supermarkets are still learning what to do with that data. That's the biggest challenge."
The Deloitte & Touche survey queried CIOs in several business segments, including retail and distribution (14% of respondents), manufacturing (26%), insurance (12%), health care (10%), banking and financial services (8%) and energy and oil (8%).
Blumberg noted that client-server technology is not only being used in more business applications than ever, but CIOs are taking advantage of more sophisticated systems configurations.
Although most client-server systems are working on the most basic level, such as connecting a graphic user interface to a mainframe system, advances are being made into more complex architectures where the data base is operating in a decentralized manner.
"If you look at the hardware configuration of the 1980s, you had a very centralized environment. If you look at current trends you see it's much less centralized, and by the time you get to the late 1990s, with more client-server in place, you're dealing with a very decentralized network that becomes more complex with local area networks, wide area networks and various forms of telecommunications" that send costs soaring, he said. The cost of maintaining such a complex network architecture and the increasing importance of security measures to protect the data being transmitted "is something people are really starting to wrestle with," Blumberg said.
Another issue CIOs are grappling with is the need to replace legacy systems -- which comprised 70% of total applications -- despite shrinking budgets.
When singled out as a group, retail and distribution CIOs, including supermarket chains, reported an information systems budget increase of 2% in 1993, significantly outpacing the 0.4% average increase reported by respondents overall, but falling short of the rate of inflation.
However, Blumberg said, "The bad news for retail is you fall at the end of the line when your budgets are viewed as a percentage of company revenue. It is surprising to see the statistic is still as low as nine-tenths of 1% of sales."
Supermarket retailers in particular are struggling to upgrade older front-end systems.
"[Supermarkets] have point-of-sale systems that have now been in stores for a long time. And they're going to have to spend to replace those," he told SN. "I think supermarkets are becoming more and more sophisticated in distribution systems and managing inventory. Both of those are driving the supermarket industry."
The survey also found that the turnover rate among CIOs continues its upward trend, 18.8% in 1993 compared with 17.5% the previous year and 14% in 1991.
"The reasons for the high rate of turnover are based on the expectations placed upon CIOs be more participatory in senior management decisions and to keep up with technology that is evolving rapidly," Blumberg explained. "You are no longer being asked to only manage information technology. They ask you to participate in joint ventures with the user community," he said.