InformationWeek

September 28, 1998

Behind The Numbers:
'99 Budget Advice: Don't Worry
(cont'd)

Optimism For 1999

It's up, up, and away when it comes to IT spending next year. Only 15% of IT executives predict their companies will cut IT spending next year, while 57% say spending will increase. The rest say IT spending will stay close to 1998 levels.

Among those who say their spending will increase, the largest number--42%--predict a healthy rise in IT spending of between 6% and 10%. Nearly one-quarter say their budget will climb more than 15% next year. That's not too shabby in a year when inflation is virtually nonexistent and the price of many types of hardware is falling fast. The current stock market turmoil seems unlikely to have much impact, since 68% say even if the market falls further it wouldn't affect 1999 spending.

Web Buying Power

Remarkably, 71% of the companies that landed on this year's InformationWeek 500 rankings have purchased one or more hardware or software products via the Web in the past 12 months. This procurement trend likely will expand even further in coming years.

Web procurement represents a fundamental shift in the service expectations of large IT organizations. InformationWeek 500 shops increasingly are willing to sacrifice the personalized service of a vendor sales call for the speed and convenience of Web purchasing-thus avoiding a protracted purchase process. That enables these Web-savvy managers to deliver solutions to clients much faster than before.

Objects On The Rise

Although it doesn't get as much attention as Java, Microsoft's Visual Basic remains one of the most popular development platforms for new applications. But so far, no single object or component platform can claim a majority of corporate application developers.

Even in progressive IT shops, many developers use procedural languages such as Cobol or C, typically for maintenance of existing apps. But with the rise of HTML-based apps and the move to mixed media on networked applications, it's reasonable to expect objects and components to continue their slow rise to dominance.

ERP Pays Off

Four out of five InformationWeek 500 companies deploy one or more enterprise resource planning modules or applications. This pervasive use of ERP is significantly higher than that found among the average IT shop at $1 billion-plus organizations surveyed by InformationWeek Research in the past 12 months.

Return on investment in ERP deployments--always an expensive undertaking--remains a significant concern. While only 10% of sites have achieved payback on their investment, another 19% expect to get there within 12 months.

But one-fifth still wait patiently, figuring it will take more than two years before their investments pan out.