IT Confidence Hits A Very High Note 2

The quarterly InformationWeek IT Confidence Index reached a record high 1,655 in March, up 18% from December and a whopping 119% from a year earlier.
Business-technology executives, as a whole, are an optimistic lot these days as they view the U.S. economy and their businesses' prospects.

The quarterly InformationWeek IT Confidence Index reached a record-high 1,655 in March, up 18% from December and a whopping 119% from a year earlier. That's when pessimism about economic prospects was in full swing as American troops awaited word from Washington to invade Iraq. Last March, the index bottomed out at 757.

Among the 333 executives surveyed earlier this month by InformationWeek Research, nearly two-thirds expressed a positive outlook on current economic conditions, up from one-third on the eve of the Iraqi war. These execs are even more optimistic about business prospects for their own companies, with eight of 10 conveying a positive attitude, up 12 percentage points from three months earlier. For the most part, these business-technology executives see the coming three months as strong ones for the economy and their businesses as well.

The improving economy means businesses should begin to tackle IT projects that might have been placed on the back burner in more troubling times. More than six of 10 respondents say they have a positive attitude about their companies' IT project starts and initiatives in the coming months; a year ago, fewer than half had such rosy attitudes.

IT Confidence Index

H.M. Stauffer & Sons Inc., a $25 million a year maker of trusses used for roofs, floors, and wall panels, has been experiencing annual sales growth of about 15% to 20% in recent years, and intends to invest some of that increased revenue into IT and communications projects. "We're dependent on the health of the housing market," says VP and CFO David Kramer. "As long as it stays healthy, and we expect that it will, we should be in reasonably good shape."

One IT project Stauffer will tackle involves fine-tuning its Microsoft Great Plains enterprise resource planning system to improve the accuracy of inventory tracking. In addition, the 125-employee company will automate its paper-based truss-designing system, doubling or tripling the output of a dozen designers, Kramer projects. The company also will look into replacing its phone system with one based on Internet technology that would allow workers to access voice and E-mail messages in Microsoft Outlook.

Industrial construction has lagged residential building in recent years, so companies that supply goods to that sector are beginning to see the economic rebound. Despite slow growth in its industry, Ilsco Corp., maker of electronic connectors used in industrial construction, has seen its market share improve. "We've been doing alright, but we'd love to have [the] late '90s and early 2000 back," says VP of finance James Valentine.

With prospects for more industrial building--and more revenue--the private manufacturer may soon implement a customer-relationship-management system. "We've held back on a few projects over the past two or three years, primarily CRM, waiting for the economy to come back," Valentine says.

As the economy improves, he says, the 600-employee company will be more likely to invest in IT that has a longer and less-direct payback on investment. "When you're fighting the economy, you don't necessarily emphasize the soft cost in savings," he says. With the economy on the upswing, companies like Ilsco are set to acquire IT that offers hard and soft returns on their investments.

Editor's Choice
Samuel Greengard, Contributing Reporter
Cynthia Harvey, Freelance Journalist, InformationWeek
Carrie Pallardy, Contributing Reporter
John Edwards, Technology Journalist & Author
Astrid Gobardhan, Data Privacy Officer, VFS Global
Sara Peters, Editor-in-Chief, InformationWeek / Network Computing