Web Site Spending on the Rise

By CIO Update Staff

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JupiterResearch, a division of JupiterMedia, CIO Update's parent company, today announced that, according to its recently released report, Web Site Spending and Governance Trends, Web site operations budgets are on the rise compared with 2003.

Drawing on an extensive survey of executives responsible for their company's Web site operations, the report found that 24% of surveyed companies are planning to spend $1million or more on site operations in 2004, compared with 20% who spent in that range in 2003.

Forty-nine percent of companies JupiterResearch surveyed said they planned from two-to-four major development initiatives in 2004, such as new home pages, new navigation, new design, new search technology, content management or other major functionality.

The report also revealed that 49% of Web site operators indicate that improving Web site usability is a key challenge for 2004. In responding to the survey, more executives cited the usability as their greatest challenge over any other operations challenge.

While the spending increases will give greater flexibility to companies pursuing growth opportunities online, obstacles remain.

In JupiterResearch's interviews with hundreds of Web executives over the past year, a picture has emerged of multiple stakeholders with conflicting objectives, pulling companies' Web sites in different directions.

At most large companies, marketing, customer service and IT departments all play a role in Web site decision-making. While marketing is concerned with brand building and growth, customer service focuses on satisfaction and call deflection. IT is generally motivated by cost reduction and technical objectives like infrastructure simplification.

While attempting to use their Web sites to serve the interests of the numerous corporate constituents who control the purse strings, many Web businesses fail to maximize the value of the site to the business overall.

"Web site governance is a tangled, often highly political affair," commented JupiterResearch Senior Vice President David Schatsky, author of the study and head of research at JupiterResearch. "As a result, even very sophisticated companies are challenged to extract the most value from their online presence."

The report recommends that a single executive be charged with responsibility for maximizing the overall business value of a company's site, beyond supporting the goals of individual departments or business units that have a stake in the site.

This article was compiled and edited by CIO Update staff. Please direct any questions regarding its content to Allen Bernard, Managing Editor.