Compliance, cost saving, consolidation to rule IT spending in 2010

Public sector, manufacturing, banking: This year's big spenders
Written by Nick Heath, Contributor on

Public sector, manufacturing, banking: This year's big spenders

With IT budgets out of the doldrums and - perhaps - on the rise again, analysts have predicted which sectors will spend the most on tech this year.

According to a report by analysts Pierre Audoin Consultants (PAC), software and IT services spend across all sectors worldwide will grow to €625bn in 2010, an increase of one per cent over 2009, compared to the 2.7 per cent slump in IT spending that took place in 2009.

The public sector will be the biggest spender in 2010, shelling out €148bn, an increase of 3.3 per cent over 2009.

Green shoots

The green shoots of economic recovery will be reflected in a rise in spending on IT software and services says PAC
(Photo credit: Pfly via Flickr under the following licence)

But PAC analysts are forecasting that the public sector spending growth will slow in coming years, a prediction that will almost certainly come true in the UK - where the Treasury has set targets to slash £3.2bn from the public sector's annual IT spend from 2013.

Martin Barnreiter, senior consultant at PAC Munich, said in a statement: "PAC expects a progressive slowdown of growth in spending despite the implementation of new bookkeeping standards... and some hotly anticipated e-government projects."

Manufacturing will be the sector that spends the second highest amount on IT, splashing out €140bn in 2010 (a decrease of one per cent from 2009). PAC predicts the sector will focus on money saving measures, such as consolidation of outsourcing deals and standardisation of IT services. Manufacturers are also likely to concentrate on linking up product data systems with their ERP and CRM systems, according to PAC analysts.

Banking, the third highest spending IT sector, will invest €101bn on IT - up 1.2 per cent on 2009 - with PAC predicting large investments in systems to ensure compliance with financial regulations and post-merger systems integration projects.

Retail will spend €41bn in 2010, down almost two per cent on 2009. Retailers will invest in better supply chain management and business intelligence, providing the sector does not suffer too many bankruptcies, according to PAC analysts.

The transport sector will invest €26bn in IT in 2010, up one per cent on 2009, most of which will be concentrated on logistics systems and improvements to customer facing technology, such as ticketing, check-in and payment systems.

Insurance companies, meanwhile, are expected to focus their €34bn-worth of spending on CRM and web-based systems, as well as the modernisation of legacy infrastructure.

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