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IT chiefs won't be going shopping in 2002

Lindsay Clark
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.

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