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US Surveys: No big boost likely in IT budgets this year

US Surveys: No big boost likely in IT budgets this year

Stock markets are strengthening, and consumer confidence has increased in recent months. But thus far, those developments aren't having much of a positive impact on corporate IT spending plans

Stock markets are strengthening, and consumer confidence has increased in recent months. But thus far, those developments aren't having much of a positive impact on corporate IT spending plans. In fact, a respective 23 percent and 30 percent of North American companies surveyed separately by Forrester Research and Meta Group said they plan to shrink their tech spending below the levels they had originally budgeted for this year.

Nearly 70 percent of the 700 respondents to Cambridge, Mass.-based Forrester's survey indicated that they're holding steady on their IT budgets. But the survey results, released this month, led Forrester to drop its overall 2003 IT spending forecast from the 1.9 percent average budget increase it projected in December to a mere 1.3 percent gain.

"If you look at IT spending from a Buy, Hold or Sell perspective right now, most companies are taking a Hold approach," said Howard Rubin, executive vice president at Stamford, Conn.-based Meta.

The Meta study, which was completed last month and involved 500 companies, found that 41 percent of the respondents plan to leave their 2003 IT budgets unchanged. Rubin said the remainder were almost evenly split: 30 percent plan to cut their budgets, and 29 percent intend to increase spending.

Holding Steady

The Hold approach to IT spending maps with Corning Inc.'s plans. "At this point, we aren't changing our full-year target," said Richard Fishburn, CIO at the Corning, N.Y.-based maker of optical fiber, cables, photonic technologies and other products.

But Fishburn added that Corning's IT budget called for higher spending in the first half of the year to fund ongoing productivity programs, such as the application of ISO 9000 practices at the company's global IT shared services center. In addition, Corning consolidated help desk activities at three regional sites earlier this year. As a result, IT spending for the rest of the year will drop off from the first-half level, Fishburn said.

Genesee & Wyoming Inc., a Greenwich, Conn.-based operator of short-line and regional railroads, built a marginal increase into its IT budget this year. That's because the company's annual revenue is projected to grow by $20 million, and IT spending is pegged to equal 2 percent of revenue, said Mike Meyers, vice president of information management and technology at Genesee & Wyoming. Meyers added that he doesn't expect any changes to be made to the budget. -- Computerworld (US)

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