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9/24/2004
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IT Confidence Index At Lowest Point In A Year

InformationWeek's confidence indicator has dropped nearly 19% since March, yet more than half of 300 business-technology managers say they're positive about current economic conditions.

Business-technology managers are upbeat about the economy and their companies, but beneath the surface, uncertainty raises questions about whether things are as good as they seem. That hint of doubt helps explain why the latest InformationWeek IT Confidence Index fell for the second consecutive quarter.

The index is based on a survey that takes the pulse of 300 business-technology managers' attitudes on how the economy influences IT decisions. It fell 8.5% in the September quarter. Since peaking in March, it has dropped by nearly 19% and is at its lowest point in a year. Still, only 10% of those surveyed were negative about current economic conditions; 54% were positive and 36% neutral.

IT Confidence IndexHowever, only 45% of respondents express such optimism about the economy in the coming three months. One CIO sees the November presidential election as creating uncertainty among her business-technology colleagues.

Ruth Harenchar, CIO of Bowne & Co., a publisher of financial reports, is confident about the economy's future but sees the election as causing some jitters, even though she doesn't expect major changes in the economy regardless of who captures the White House. "It's like an extension of summer vacation; we're just waiting for it to get over," she says.

Adding to the cautious attitude: CIOs who continue to compare today's economy with the unparalleled conditions of the Internet boom, says Eric Johnson, director of Dartmouth University's Tuck Center for Digital Strategies. "They're beating back bad feelings, and that's created the general malaise the economy has been in," he says. "They have a feeling that things aren't where they wish they'd be."

Even with an underlying uneasiness, half of survey respondents say they're spending more on IT in 2004 than they did in 2003, with one-third appropriating the same amount as last year.

A year ago, only half of the business technologists surveyed had a positive outlook regarding their companies' current IT initiatives; this quarter, 63% had that positive feeling. Bowne, for instance, last month launched a business-to-business Web-based subscription service to let its clients easily file required records with government regulators, an offering that complements its paper-based products.

Hospitality provider Carlson Cos. is about to make a multimillion-dollar investment in a supply-chain system that CIO Stephen Brown contends will drive enormous efficiencies and vastly improve relationships with business partners. "Challenging times are good times to look for opportunities to create competitive advantage," he says. "Even in bad times, we take the approach to create long-term value."

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