Corporate IT initiatives spending still on track
Despite 2002 being a cautious spending year for corporate information initiatives, chief information officers (CIOs) are now expressing a degree of optimism that 2003 will show gradual improvement, with spending being spear-headed by a combination of new hardware and software initiatives, according to CIO Magazine's 'Tech Poll'.
The Tech Poll is used to construct CIO Magazine's Tech Future Growth Index (TFGI), which projects information technology (IT) activity over the coming 12 months. In December 2002, the TFGI stood at 1.6, compared to 1.8 in November.
During December 2002, the Tech Poll's panel anticipated IT budgets growing by 4.6% during 2003, down slightly from November' 5.1%. In addition, the panel reports that IT budgets declined by an average of 0.1% during 2002, showing an improvement from the 0.5% decline reported in the November poll.
But, with 87% of CIOs saying they have an application or project back-log, CIO Magazine publisher, Gary Beach, warns that "an alarming number of businesses are putting their operability and competitive advantage at risk." As a result, concerns about competition and market share may well serve as another driver for increased technology spending in 2003.
Optimistic Security software was the strongest sector in the poll, with around 53% of respondents planning to increase spending (a slight decrease from 56% in November), while only 5.1% plan to decrease spending (down from 6.4% in November).
The outlook for computer hardware spending also improved sharply, with 45.6% planning to spend more (compared to 39.3% in November), and only 20.4% planning to cut spending (down from 27.7% in November).
"While CIOs continue to cite weak profits as the number one constraint to technology spending, next year's poll results should start to show better trends if profits do improve, as I expect they will," added Dr. Ed Yardeni, chief investment strategist for Prudential Securities.