IT budgets to grow 2% in 2004

Information technology budgets should grow 2 percent in 2004, with programs devoted to enterprise resource planning and supply chain management increasing their share of the software spending pie, a new report says. A survey of 500 IT executives released Tuesday by AMR Research shows budding financial optimism on the part of the survey's participants.

"We are seeing purse strings begin to loosen up with the growing demand to replace older systems and the belief that the economy is beginning to improve," said Jim Shepherd, an AMR senior vice president, in a statement.

Enterprise resource planning applications are expected to increase their share--already the largest--of the IT software spending pie. ERP is expected to account for 27.2 percent of IT software spending next year, up from the 26.6 percent that's anticipated for this year.

Supply chain management software, meanwhile, should increase its share of software spending by 16.3 percent next year, compared with the 13.6 percent expected for this year, according to the report.