IT Spending Still Expected to Increase in 2004
"I was surprised by the optimism from such a short period of time from last quarter," said Fenella Scott, AMR's senior quantitative research analyst and the survey's author. "I think that a lot of it has to do with a companies starting a new year, they're hoping for higher profits. It's probably more optimistic than reality but it's a sure sign companies are in the mind set their revenues will increase and they're going to have the money to spend."
Scott said she would have expected the Q4 2003 survey results to indicate a two-percent increase over Q3 numbers, which indicated a 4.3% increase in IT spending for 2004, not a doubling of those results.
The areas of highest spend are expected to be application integration and development tools, business intelligence applications and performance management software, such management dashboards.
Spending on CRM application modules such as salesforce automation is also expected to increase as companies look to attain better customer loyalty and grow market share.
"What I'm saying here is the focus is sort of shifting from just cost cutting to technology that is going to enable (companies) to grow their customer base and increase profitability," said Scott.
AMR interviewed 200 manufacturing and service industry IT and business executives in the U.S. during January on their expectations for IT spending in 2004. The survey is weighted towards the retail sector.
The survey results include the following findings:
Next quarter's Tech Trend survey should give the best indication on how much companies will actually spend through the end of 2004, Scott said.