IT spending in US expected to increase : Accenture

By Other consultancy / rese | 21 Mar 2006

1

Despite increased spending in recent years, executives believe their IT budgets are still too small.

The majority of business and information technology (IT) executives in the United States anticipate increases in IT expenditures over the next three years, according to results of an annual study released by Accenture.

The study, which queried 300 general business managers and IT executives from US-based companies with average revenues of $8 billion, found that six out of ten executives (60 per cent) expect their organisations to increase their IT expenditures over the next three years. Only 13 per cent of respondents expect their organisations to reduce IT spending. The average increase in spending during the next year is expected to be 5.5 per cent.

Additionally, while more than two-thirds (69 per cent) of executives said that IT spending at their organisations has increased in the past three years, nearly one-third (32 per cent) indicate that spending is less than it should be.

Of those respondents who expect IT spending to increase over the next three years, the greatest number (21 per cent) selected new business initiatives as the most important factor driving the rise in expenditures. Upgrading legacy systems and adopting new technologies followed closely, selected by 19 per cent and 18 per cent of those respondents, respectively.

This healthy outlook on IT spending is further bolstered by the quality of the spending, said Gary Curtis, managing partner of Accentures global strategic IT effectiveness practice. Growth initiatives, more than maintenance activities, are driving the rise in investments.

The survey identified the following additional factors contributing to the rise in IT expenditures: Integration efforts following a merger or acquisition (specified by 13 per cent of executives); Regulatory compliance requirements (10 per cent); and Security requirements (7 per cent).

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