CEOs ready to loosen the purse strings for IT spending

The vast majority of companies are planning to at least maintain, if not increase, their levels of IT spending this year, according to a recent IDC survey.

The global survey of nearly 1,000 CEOs and CIOs offers a ray of hope for the struggling IT industry, and presents a more optimistic outlook than the one per cent year-on-year decline forecasted last month by Goldman Sachs.

Stephen Minton, IDC Worldwide IT Markets program director, said in a statement: "Routine infrastructure upgrades will dominate short-term budget priorities, taking up almost half of all spending in 2003. This isn't surprising, given that a lot of companies have spent very little during the past two years on the technology which is already core to running their business."

The survey also found CEOs were more optimistic about making IT spending increases this year than their CIOs.

Nearly one-third of technology spending now comes from areas outside a company's IT department, IDC's researchers found. That shift has come about as CEOs rein in the past practice of virtually leaving an open cheque book for their CIO to make IT spending decisions, and as department managers, who are accountable for the profit performance of their unit, are also getting active in the process.

Even though 85 per cent of CEOs and CIOs said they anticipate stable or increasing IT budgets, they also said this optimism is subject to change based on economic shifts and the performance of their own company's financial results.

Minton said: "Just as IT spending was severely disrupted in 2002 by wild card factors - including WorldCom and Iraq - so it is that the outlook for 2003 remains clouded by similar uncertainty."