IDC: Execs Consider Technology Critical to Business Success

Survey finds majority of business execs support aggressive use of information technology

Survey finds majority of business execs support aggressive use of information technology

Boston — April 8, 2004 — Recent surveys of U.S. business executives confirm that information technology is central to the execution and success of today's business strategies, according to market intelligence and advisory firm IDC.

The survey results, revealed this week at IDC's Directions 2004 Conference, show that senior business executives already spend 20 percent of their time dealing with IT issues and plan to increase their engagement with IT in the coming year. IDC said it expects this trend to continue as a majority of the executives surveyed indicated that their companies should use technology more aggressively in support of their business strategies.

"Executives are spending more of their valuable time dealing with IT issues because they consider technology to be critical to the success of their business," said Frank Gens, senior vice president of Research at IDC. "A growing level of executive commitment, combined with the desire to 'play offense' with technology, supports the argument that IT matters, and the vast majority of business executives clearly understand this."

Against this backdrop, IDC estimated that worldwide IT spending will increase by 5 percent in 2004, driven largely by an improving economy and the need to address infrastructure issues delayed during the downturn. Over the past nine months, a series of IDC end-user surveys shows that the likelihood of IT budget increases has gone up by nearly 15 percent. At the same time, business IT investments were up nearly 16 percent in the fourth quarter of 2003.

"IT spending growth will continue to recover along with the overall economy, but most CEOs remain cautious about the recovery and are focused on addressing their top business priorities," said Stephen Minton, research director in IDC's Global Research Organization. "In this environment, most decision-makers will continue to be very cost-conscious and are unlikely to authorize big-ticket purchases."

The areas expected to benefit from budget increases in 2004 are the infrastructure areas that suffered most from under-funding over the past several years: PCs, servers and infrastructure software. Over time, however, security and mobility will become increasingly important growth areas in many budgets.

Meanwhile, most IT departments will continue to focus on infrastructure improvements, introducing new software solutions and managing the costs of IT. However, IDC also found that using technology to realize cost savings and to capture new customers is gaining in importance as key measures of IT success.