Survey reveals that spending and strategy will be the focus for 2004

The challenges of aligning the IT department to business strategy and responding to change and financial pressure on budgets are...

The challenges of aligning the IT department to business strategy and responding to change and financial pressure on budgets are the main managerial preoccupations of IT directors for the year ahead, according to research by Computer Weekly.

The management priorities emerged in a Computer Weekly survey of 170 IT directors across a range of industries.

The long-running goal of aligning IT strategy with boardroom thinking was rated as one of the top three priorities by almost half of IT directors, and "coping with change" and "financial pressures" were ranked as the other top three priorities for 40%.

The research also questioned IT directors about their spending plans for the year ahead. Forty per cent of the IT directors surveyed said spending on IT was set to increase over the next 12 months.

Of these, 66% said IT spending would increase by between 0% to 10%, and 20% expected spending to rise by between 11% to 25%. Only 17% of those surveyed said budgets would be cut.

Spending on IT services is also set to increase, with 66% of companies planning to increase spending by up to 10% on supplier services and outsourcing.

The findings add to a growing body of evidence that the IT market is staging a steady recovery after three bruising years of economic downturn and constrained budgets.

Given the proliferation of increasingly sophisticated viruses over the past year, that security was the most pressing technology issue judged to be facing business was no surprise. Security (54%) was followed by infrastructure upgrades (44%) and mobile computing (31%).

The rise in the level of outsourcing within a range of industries was also underlined by the report. Of the IT directors questioned, 33% said they outsourced some function of their IT; technical support was the most popular (63%), followed by customer service (15%).

The most common reason given for outsourcing was higher quality of service, with cost containment the next most popular reason.

Reasons given by IT directors for not outsourcing included the cost, or not wanting to hand over IT because it was seen as a core part of the business.

Despite analyst predictions that offshore outsourcing will transform the IT industry - and cost thousands of UK jobs - 60% of IT directors ruled out offshore outsourcing over the next year, compared to 37% who said they would outsource.

On the increasingly important issue of compliance, the Data Protection Act was cited by 52% of companies as the most important piece of legislation that will affect business.

Elsewhere, long-running concerns continued to loom large; 33% of IT directors said the difficulty of identifying the benefits of investment in technology as a major hurdle to overcome.

However, on a more positive note, about 80% of IT direc-tors felt their boards recognised the vital role of IT to the organisation.

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