Survey: e-business spending to stay strong

CARLSBAD, Calif. -- Investments in e-business technology aren't headed into a slump this year, despite widespread predictions of slow IT spending, a new survey finds.

For 87 percent of CIOs and e-business decision makers surveyed by AMR Research Inc., spending will remain steady or increase for e-business initiatives such as customer relationship management, supply-chain management and business-to-business e-marketplaces. AMR Research announced the results here Monday during its Strategy 21 conference.

The results don't paint as bullish a picture for IT spending overall. While IT departments were increasing overall spending by about 10 percent last year, they plan to cut that down to a 5 percent increase this year, AMR Research found.

"The indications were pretty clear," said Tony Friscia, president and CEO of AMR Research, of Boston. "During a downtown, you can't justify any investments with no ROI [return on investment]."

What will thrive

Certain e-business initiatives can help bolster revenues and cut costs, Friscia said. If facing a recession, companies, for example, must increase efforts to attract and retain customers with customer relationship management technologies. In the supply chain, streamlining buying and selling relationships also can improve efficiencies.

A panel of IT executives speaking at the conference yesterday largely concurred with Friscia and AMR Research's findings. Jack Cooper, corporate vice president and chief information officer for New York-based Bristol-Myers Squibb Co., said he would classify himself among the 23 percent of respondents in AMR Research's survey who are seeking to bolster e-business spending.

"This is the time when a CIO makes his stride," Cooper said, and must resist pressure to cut back on technology that will improve sales and trim costs. "When there is a cut in a budget, there's tremendous pressure for IT to pick up the pace."

For 2001, CRM and supply-chain initiatives are among Bristol-Myers' top IT priorities, Cooper said.

Bristol-Myers' focus mirrors some of the top initiatives found in the survey. About 87 percent of respondents plan to spend the same or more money on CRM in 2001. On supplier management, 84 percent plan similar or additional spending. And with e-marketplaces, 94 percent plan steady or increased investments.

On the flip side, companies are reluctant to invest on internal e-business processes. Only 71 percent planned to spend the same or more on those projects. That's likely because those projects have the least likelihood of immediately generating new revenues or lowering costs, Friscia said.