Tech spending remains strong
Despite the economic downturn, spending on information technology products, services, and staff remains robust. A majority of IT executives anticipate an increase in IT spending in 2001, although that could change if the nation's economy takes a turn for the worse. As times get tougher, IT managers are being forced to take a closer look at their budgets and place a renewed emphasis on ROI issues.
Where the IT dollars go
The typical large company devotes 38 percent of its IT budget to internal personnel, according to Gartner Inc. For companies looking to trim costs, Gartner suggests reducing hardware budgets by deferring new equipment purchases and software licensing agreements should be re-evaluated if a corporate consolidation has taken place.
No major shifts in IT spending
Bucking the perception that the tech sky is falling fast, a March survey of IT managers by Gartner found that 65 percent of the respondents expect their budgets to increase in 2001. Only 13 percent of the respondents anticipated a decrease in spending, but if the economy worsens, that number would increase to 33 percent.
| INDUSTRY | OF THOSE DECREASING: RATE OF BUDGET DECREASE |
OF THOSE INCREASING: RATE OF BUDGET INCREASE |
| Distribution, retail | -1 percent | 12 percent |
| Financial services, banking | -13 percent | 7 percent |
| Government, federal agencies | -11 percent | 14 percent |
| Health services, hospitals | -35 percent | 26 percent |
| Information technology | -14 percent | 12 percent |
| Manufacturing, discrete | -5 percent | 12 percent |
| Manufacturing, process | -6 percent | 14 percent |
| Services | -7 percent | 15 percent |
| Telecommunications services | -13 percent | 24 percent |
| Transportation | -9 percent | 10 percent |
| Utilities | -6 percent | 8 percent |
| Average, all industries | -8 percent | 13 percent |
| Source: Morgan Stanley |
Which type of software project gives you the highest ROI?*
When it comes to the best bang for the IT buck, customers come first, according to a survey of IT executives conducted by Morgan Stanley in March, 2001.
| Top 5 responses | |
| Marketing/consumer analytic software | 24 percent |
| CRM (customer relationship management) software | 20 percent |
| E-commerce initiatives | 17 percent |
| ERP (enterprise resource planning) software/ERP upgrade | 17 percent |
| New custom development | 17 percent |
| Bottom 5 responses | |
| Mainframe systems management | 2 percent |
| Microsoft Office upgrade | 2 percent |
| Security software | 3 percent |
| E-store software for Web site | 3 percent |
| E-mail response software | 4 percent |
| Source: Morgan Stanley |
* Multiple responses allowed
InfoWorld
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