InformationWeek

ata Marine System Ltd.'s IT budget has increased 25% compared with last year, says Tim Everitt, business development manager at the Aberdeen, Scotland, communications company. The jump is tied to a nearly completed expansion project that adds network operations and business offices in Algeria, Brazil, Singapore, and the United States. Volkswagen America's IT budget is up, too, with money earmarked for capital projects, says Elliot Zeltzer, manager of telecom services at Gedas Inc., Volkswagen's IT arm.

Despite a slowdown in IT spending, those companies are more the rule than the exception. According to the InformationWeek ResearchGlobal IT Strategies 2001 study, 61% of respondents say their IT budgets will be up this year. Survey respondents in the Pacific Rim are the most committed to IT investment, with 73% saying their 2001 IT budgets will surpass last year's.

Still, shrinking bottom lines at companies around the world can't help but affect IT spending. Software spending is declining worldwide, and large companies are reconsidering purchases they planned last year. Indeed, 13% of survey respondents say they expect an IT budget decrease, and 26% say their budgets will stay the same. "From the top, every corporate budget is under review," says Forrester Research analyst Eric Schmitt. "When the management teams get to the line items for IT spending, they look at the enormous numbers and say, 'Hey, can we get by with what we've got for another couple months?'"

At mortgage insurer PMI Group Inc. in San Francisco, the IT budget is essentially flat, says CIO Dan Roberts. And although Volkswagen's overall IT spending is up, cuts have to be made in such areas as telecommunications and remote access, Zeltzer says.

Most companies will focus on IT projects that have a fairly quick return on investment, says Joan Harbin, an analyst at AMR Research. Initiatives that streamline costs, improve customer relations and channel management, and make procurement more efficient will continue to find funding.

InformationWeek's survey results echo Harbin's outlook. IT managers around the world point to improving customer-service and-support infrastructures as their most strategic IT projects under way this year (see story, "Customer Centricity Goes Global").

Vincent Kobler, CEO of EmporioAsia Inc., which sold luxury fashion accessories to Asians over the Internet, has decided on a new business model. The diamonds, pearls, and cashmere shawls are gone, replaced by offers to develop and host custom E-retail sites for foreign companies looking to crack the Far East. Says Kobler, "Companies are looking for affordable outsourcing solutions rather than spending a fortune to set up a Web site in Japan."