A lot of business data is flying around the Internet, but companies are selective about whom they share it with. More than three-quarters of InformationWeek 500 companies share data electronically with customers as a standard practice; 17% do it occasionally. Only 3% say they never share data electronically. Two-thirds of companies share data with business partners as a standard practice, and one-quarter say they do occasionally. Sixty percent of respondents regularly share information with suppliers, and another quarter occasionally do.

Budget Overview
InformationWeek 500 IT dollars spent
	2000	2001	2002
Average I.T. dollars spent	$442.2M	$483.9M	$319.6M
Average I.T. budget as a % of revenue	4.31%	3.88%	3.39%
Data: InformationWeek Research survey of InformationWeek 500 executives; additional data from InformationWeek 500 survey, 2001 and 2000
INFORMATIONWEEK RESEARCH

But there are wide discrepancies in how much data companies will share with their suppliers. The most commonly shared information is order management (shared by 58% of companies), inventory levels (46%), accounting updates (37%), product-development specs (36%), and production schedules (36%). Most companies are protective of sales forecasts and results (shared by only one-fifth of companies), marketing plans (18%), customer demographics (17%), customer-loyalty or-satisfaction metrics (17%), and cost-structure data (13%).

Telecom equipment manufacturer Nortel Networks wants to share more data with partners. It recently finished a companywide rollout of ClarifyCRM that gives a complete view of sales, service, and product-support operations, and that's integrated with a data warehouse to help salespeople identify opportunities faster. The company also deployed a virtual private network to give business partners access to some of its IT systems. "To be able to interact with these partners, we needed a standardized approach," CIO Richard Ricks says. At the same time, Nortel has to dramatically cut costs in the face of a drought in telecom-equipment sales. It has removed more than $1 billion in costs from its voice and data network during the past 2-1/2 years, in part through maintenance and bulk discounts that come from standardizing its architecture across the company.

Throughout industries, the challenge of business-technology leadership in the past year has been about cutting costs and doing more with less. Even as revenues slid, three-fourths of companies continued to keep IT spending between 1% and 5% of annual revenue. Eighteen percent spent more than 5% of revenue on IT, down just slightly from a year ago. And the percentage of companies spending less than 1% of revenue on IT doubled this year, to 6%. At Sprint, the pressure to cut costs across long-distance, local-phone, and wireless-services divisions led it last year to cut its IT staff by more than half, to about 1,800, from 4,000, VP of IS Carol Bussing says. Next month, Sprint will start culling applications with a goal of cutting maintenance costs by as much 20% in the next year and a half. That's on top of savings of 10% to 15% already achieved by allowing certain less-critical apps to operate on a lower guaranteed level of service.

Where The Money Went
Average dollar breakdown of IT budget
	2001		2002
New product or technology purchases	19%	$91.6M	19.50%	$62.2M
I.T. consulting outsourcing	14.60%	$70.7M	18.00%	$57.4M
Research and development	4.50%	$21.9M	2.50%	$7.9M
Salaries and benefits	33%	$159.7M	27.90%	$89.3M
Applications	17.70%	$85.5M	21.00%	$67.2M
Everything else	11.20%	$54.5M	11.10%	$35.6M
Note: In 2001 the average total IT budget was $483.9 million; in 2002, it was $319.6 million
Data: InformationWeek Research survey of InformationWeek 500 executives
INFORMATIONWEEK RESEARCH

In the slump, companies use the same basic incentives to motivate employees, though the numbers have slid a bit: 85% award cash or stock bonuses, down slightly from 89% last year, and 64% award stock options, compared with 69% in 2000. Telecommuting has become less popular, with three-quarters of companies offering it as an incentive to IT staff, compared with 83% last year.

Many companies have to be more creative with how they use promotions, staff recognition, company-paid training and education, and increased responsibility to motivate employees. E-learning is one way: 22% of companies say their employees have completed third-party E-learning courses, and 28% have completed company-developed coursework. E.&J. Gallo Winery assigns IT staffers personal training budgets and lets them complete technical education and development programs on company time. There are also breakfasts, barbecues, and brown-bag lunches with CIO Kent Kushar, and quarterly off-site meetings to address the status of big projects, vendor changes, and technology strategy. "You can set up the best IT plans in the world, but they mean nothing without the right people to implement them," Kushar says.

It's not an overstatement to say that within these 500 companies are some of the best IT plans in the world. They're the ones to watch to see how tighter resources affect their ability to turn those plans into action.

-- With Larry Greenemeier, Mary Hayes, Marianne Kolbasuk McGee, and John Rendleman

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