As the economic slowdown continues, IT managers are looking for
return on investment (ROI) from existing technologies rather than
buying new systems, according to a survey of European IT companies
by Merrill Lynch.
For the next few months 90% of IT purchasing decision makers will
be focusing on delivering ROI on their existing systems, while only
10% will be looking to invest in new technologies, the survey of 50
companies reveals.
Evidence of a slowdown in technology spending continues to appear,
with average growth dipping to 3%, compared to 9% in 2000.
Companies trimming IT budgets during 2001 cut back on the use of
external consultancies (36%) and internal IT staff (32%). Half of
the IT budgets were decided by the chief financial officer, while
an increasing proportion was coming under the control of finance
officers (17%) and chief executives (19%).
Some IT managers suspect that suppliers gripped by the collapse of
some IT markets are taking advantage of user organisations. One
third said their software suppliers were forward selling on
software licences in order to bolster short-term financial results.
However, there does appear to be some light at the end of the
tunnel. Although it said it is too early to make firm forecasts,
Merrill Lynch predicted that growth in IT spending could be as much
11% this year. Last week, the Computer Weekly/Kew Associates
quarterly survey forecast that IT spend would increase by 7% during
2002.