UK tech spending should be solid in 2002

More than two-thirds of IT managers at major UK companies expect their technology spending in 2002 to be greater or equal to last year's budgets

Few of the UK's largest companies will cut their IT spending in 2002, according to recent research that found that firms expect investment in new technology to give a major boost to their growth and profitability. A survey carried out by offshore software developer NIIT Europe has found that 38 percent of IT managers at FTSE 1000 companies who responded to the survey expect their IT spending to be greater this year than last year. A further 33 percent predicted that their IT spending levels would remain flat. NIIT Europe's report also found that that the average amount spent on IT by companies in the FTSE 1000 and Times 1000 in 2002 will be in excess of £1m. Many tech firms have been warning that recovery could be several months away, so an increase in corporate IT spending could provide a valuable boost to the tech sector. One reason for such an increase could be that firms believe that spending money on new technology will boost their profitability. Of the 200 IT managers interviewed, 138 (69 percent) agreed that maximising return on IT investment is an important part of their IT strategy, with 84 (42 percent) saying it was the most important issue. "In the current economic climate, businesses have to take a hard look at existing cost structures and make radical changes that will provide an impetus to profitability and growth. In today's technology-based business world, IT now plays a major role in assisting with profitability, both on the revenue and cost-side of the equation," said David West, vide-president and general manager of NIIT Europe. The IT managers identified e-business infrastructure, Web services, application integration, CRM implementation and full life-cycle application development as areas likely to see high levels of investment this year. NIIT Europe identified that e-business infrastructure was a particularly important subject for larger companies. The London-based Centre for Economic and Business Research (CEBR) claimed last month that the UK's technology market is starting to recover, driven by the need for companies to replace obsolete equipment, after many postponed spending on IT infrastructure in 2001.

More enterprise IT news in ZDNet UK's Tech Update Channel.

For a weekly round-up of the enterprise IT news, sign up for the Tech Update newsletter. Have your say instantly, and see what others have said. Go to the ZDNet news forum. Let the editors know what you think in the Mailroom.