Follow the Money

An IT Spending Forecast for 2003

Where will IT budgets be spent in 2003?

The Wendover Technology Marketing Report, a forward-looking analysis of technology spending initiatives in the U.S. and United Kingdom, compiles thousands of surveys with business and IT managers to uncover trends about budgeted projects.

The top four requested projects for 2003, as of February, were: firewall protection, (11 percent of respondents interested); human resources software (10.9 percent); disaster recovery (10.3 percent); and operations software, including supply chain management (9.9 percent).

Additionally, accounting software was the fifth most requested area of interest, up from the number eight spot last year. Larry Dillon, president and CEO of Wendover, says that increased spending in areas such as accounting shows that the industry is "getting back to the basics."

Data warehousing initiatives have remained extraordinarily constant: Roughly 8 percent of respondents have been interested in implementing or developing data warehouses last year, and into 2003 as well.

CRM, for which only 2.4 percent of respondents indicated interest, showed a slight increase in spending plans in Q1 of this year, recovering from the steady decline it experienced throughout 2002.

Money budgeted for ERP, however, has declined drastically and steadily over the past two or three years. The 4- to 6-percent peak seen in planned spending for ERP in 2000 and 2001 has fallen to a scant 0.4 percent now.

Dillon estimates that spending on new IT will increase 16 percent during the first two quarters this year, but will decrease by 20 percent in the second half. He adds that overall IT spending will be up 4 percent this year.

— Jill Duffy

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