Survey: 2003 shows IT spending recovery

A survey of Canadian CIOs released this week indicates that IT spending will increase slightly over 2003.

Of the 90 senior IT managers surveyed for the report entitled CIO IT Spending Survey, 49 per cent said they plan to increase technology spending for the remainder of 2003. Canaccord Capital Corp., a Vancouver-based independent investment dealer, along with CIO Canada magazine, an IT World Canada publication, conducted the survey.

The survey also indicated that 14 per cent of respondents said the increases in IT spending currently being planned will represent an increase of over 10 per cent, a higher figure than previously reported in other surveys.

Spending appears to be happening in “must have” areas as opposed to “nice-to-have areas.” These are areas that have a direct and measurable impact on improving existing processes, increasing productivity and reducing costs. Such areas include: lower-cost infrastructure; security; storage; application integration software; wireless messaging; and wireless networking.

The overall spending growth, which works out to be three to five per cent over 2002, indicates that respondents are no longer waiting for IT recovery in order to resume spending. Twenty per cent of those surveyed did, however, indicate that new spending would have to be in the “must have” category and satisfy return on investment (ROI) requirements.

In the wireless market, wireless e-mail will see the greatest increase in spending over the duration of the year, while Wi-Fi or wireless LAN technology was seen as an area of potential growth. Some barriers cited by the survey to adopting wireless technology include a lack of security (62 per cent of respondents), unproven benefits or ROI (56 per cent of respondents), and high start-up costs.

When asked about top spending priorities for 2003, 78.8 per cent of respondents indicated that reducing operating costs is at the top of the list, with 57.5 per cent citing improved employee productivity as a key priority. Another 51.3 per cent indicated that enhanced customer satisfaction would receive top spending followed by 50 per cent of respondents focused on supporting current revenue-generating projects. Also, 33.8 per cent indicated that supporting new incremental revenue programs would receive top spending priority.

According to the survey, spending priorities will be evenly distributed between new and current IT projects. New initiatives and upgrade infrastructure would both see 23 per cent of spending, initiatives already underway would see 22 per cent, followed by hardware upgrades at 18 per cent and software upgrades at 14 per cent.

Respondents indicate that when choosing a vendor, total cost of ownership (TCO) is the most important consideration, followed by price and implementation risk. According to the survey, this signals a significant shift from vendor leadership and relationships towards vendor ROI.

Canaccord Capital Corporation can be found online at

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Jim Love, Chief Content Officer, IT World Canada

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