Even in a shaky--but, it's hoped, recovering--economy, IT organizations need to focus on projects that will support key business priorities. Amid greater optimism about IT budgets and spending for the coming quarter, business-technology executives are moving forward with initiatives that improve customer service and relationships and boost business value, according to the InformationWeek Research 2Q Priorities study.

Nationwide Insurance Systems, the IT division of $32.8 billion-a-year Nationwide Mutual Insurance Co. in Columbus, Ohio, is putting customer service at the forefront of its plans for 2002. A key project this year is to roll out a Web-based application for 4,000 insurance agents, says VP of IT Kelly Cannon. The portal, dubbed AgencyWebBench, provides agents with a gateway to company services, applications, and links for other informational sites. One goal is to let agents log on to the site in front of customers and display the variety of Nationwide benefit plans in real time and calculate cost depending on each customer's needs.

"There is a payoff for our agents in terms of time to market and speed of service to customers," Cannon says. The Web-based portal will ensure that agents will have reliable access to information wherever they are. "We understand the cost of downtime" to customer relationships, she says.

Nine out of 10 companies surveyed for the InformationWeek Research 2Q Priorities study of 300 business-technology executives have similar beliefs. They're planning to improve customer service and hoping to better understand and meet the needs of customers.

In general, most IT managers are looking ahead to the rest of the year with cautious optimism. InformationWeek Research found that 38% of the surveyed executives have a positive outlook on IT spending and budgets in the next three months, compared with 33% who hold that view about current spending plans. The small-but-noticeable increase complements the finding that executives are more upbeat about their company's revenue growth for the remainder of the year. Sixty-five percent of the respondents expect this year to be better than 2001, compared with 60% in the previous quarter.

Aggressive growth is planned for restaurant chain Champps Entertainment Inc., where director of IT Jeffrey Gengler oversees the systems that support 33 restaurants today and will support six to eight more restaurants to be opened this year. Gengler has big plans to move IT forward to make the Englewood, Colo., company more productive and efficient, he says. Like 85% of the executives surveyed, Gengler is focused on IT offerings that will boost business value: He's investigating data mining, supply-chain management, and inventory-control products as the foundation of efficiency and productivity initiatives.

But Champps has found a way to closely manage its IT costs so that ambitious initiatives don't take too big a bite out of the budget. The company uses four application service providers to host most of its technologies, which allows IT costs to remain relatively flat while the $133.3 million company grows, Gengler says. Increased costs to scale existing IT systems for new restaurants are minimal. Having systems hosted also makes his job a bit easier. "I really like the idea of having a centralized data center and application support--there's no additional cost for support, and it improves my budget planning for future growth," he says.

Like Champps, American Power Conversion Corp. also plans to improve its supply-chain technologies. The company wants to use EDI technology to procure 80% of its raw materials, up from 50% today. "It's faster, more efficient, and reduces cost when we automate the process," says David McDonald, director of supply-chain systems at the $1.43 billion electrical-device manufacturer in West Kingston, R.I. Eighty-four percent of survey respondents say simplifying business processes is a key goal.

Brad Friedman, VP of information systems at Burlington Coat Factory Warehouse Corp. in Burlington, N.J., says a company must make sure that its IT investments align with strategic business objectives. "My biggest objective is to ensure that the technology we employ has a defined and significant business benefit," says Friedman, who's also moving forward with a Web-based supplier-procurement system that he expects will reduce costs. Adds Friedman, "I'm protecting the technological investments today and into the future."