Latest research has found that 49% of UK fashion companies put e-commerce systems as their top investment priority over the next three years.

According to The Prologic report Technology in Fashion, which surveyed 244 companies from the fahsion industry, 64% of firms are either in the process of setting up a website or expanding their current e-commerce offering.

Meanwhile, 80% of companies interviewed said they have a cost reduction focus as their principal means of surviving in the current economic climate.

The report goes onto say that at 1.8% of sales, IT budgets in the fashion industry are higher than the 1.3% of sales average across the UK's leading 100 retailers.

The report, carried out by market researcher Martec, surveyed companies with total sales of GBP5.6bn (US$8.26bn) and representing 16% of the UK fashion industry.

With disruption to business the main reason companies cite for not investing in IT projects, technology companies like Prologic are promoting the Software as a Service (SaaS) platform, which involves no initial capital expenditure and is deployed through a web browser.

However, Prologic's report found that 57% of fashion retailers have not heard of this relatively new platform as yet.

Sam Jackson, chief executive of Prologic, said: "In the current economic climate, companies are clearly looking for strong ROI arguments before investing in people, IT, or services.

"As a result, most fashion companies are not only reviewing expenses but also key processes that will simplify and reduce costs whilst maximising sales and profits.

"Fashion retailers are looking to maximise sales opportunities by expanding into multi-channel retailing both domestically and internationally, through franchising, e-commerce and new overseas stores.

"In particular, home shopping/web sites are identified as the top investment priority delivering the highest return on investment  over the next year.

"A reluctance to invest capital in the current economy is no longer a barrier to leveraging the best systems to support growth and change. 

"New concepts such as Software as a Service enable retailers to improve online services and achieve effective multi-channel retailing without incurring upfront significant cost or risk."