UK businesses plan IT spending increases next year

A majority of companies in the UK and Ireland are likely to increase their IT budgets next year, according to survey of executives by the Economist Intelligence Unit.

The UK was the most optimistic of six advanced markets with 63 per cent expecting IT budget growth. Fifty nine percent of businesses in the US and 44 per cent in Germany expect to increase their budgets. In France only 36 per cent expect an increase in their budgets, in Italy 54 percent, and in Spain 55 per cent.

In spite of UK firms’ planned budget increases, over eight in 10 said the cost of planned projects was an “important” or “very important” factor behind executives giving them approval to begin. Three quarters of businesses felt IT was under pressure to also deliver more flexibility.

A third of businesses in this country said that keeping project requirements as constant as possible, without allowing too many changes, was key to cutting costs. Other key strategies for carving out costs included asking suppliers to cut their charges, giving other departments the responsibility for project management, adopting open source, rationalising or replacing existing systems, and offshoring some project roles.

Customer relationship management software will receive the most IT investment money, the executives said with 41 per cent of firms stating it would receive “significant investment” next year. Thirty seven per cent will invest in server virtualisation, and a third will invest in e-business.

Service oriented architecture is the next key area, with 28 per cent of firms expecting investment. A quarter of firms expect to make a significant investment in business process improvement, and finance and performance management.

Fifteen percent expect to invest in data analytics, and the same quantity in compliance. Thirteen per cent will spend money on supply chain management systems.

Keith Haviland, managing director of systems integration and consulting at Accenture, which commissioned the survey of 550 executives, said the results demonstrated that businesses “recognise the need to invest in technology to defend and accelerate their competitive position, even in difficult times, which has not always been the case in the past”.