IT spending still patchy as companies remain cautious

Weak financial reports for the first quarter from technology giants IBM and Sun Microsystems indicate that IT spending is still patchy.

But some vendors did report a strong quarter lending weight to the theory that IT managers aren't necessarily making cutbacks, just being more cautious.

Chris Barclay, IT manager at food manufacturer Greens, admits he is far more selective when it comes to spending simply because there is greater accountability.

"I know in our situation we've tried to do more things internally instead of using outside parties; that's how we're trying to move forward," Barclay said. "We've also changed our spending mix, not spending less but more carefully."

Barclay is under the ever-watchful eye of the CFO in his organization, to whom the IT department reports.

"The CFO in our company is a lot more cautious about dollars and cents and wants to make sure that we're going to get value out of what we spend our money on," Barclay said.

"But I think budgets have had to increase any way because the general cost of operating is not going down.

"Our IT budget is going up, not in leaps and bounds mind you, but it has increased."

IMB IT manager Johan Reyneke also claims his organization is much more selective when it comes to spending.

"Every dollar is turned around twice before it leaves the door," Reyneke said.

But while more IT managers err on the side of caution when it comes to their expenditure, Reyneke claims that IT budgets will have to go up sometime soon, if they haven't already.

"It's been a long time since Y2K, so a new generation of systems and investments are now needed in companies," Reyneke said.

St John of God Health Service IT manager Lindsay Gorrie believes the reason certain vendors are showing poor profits in the first quarter of this year is because people are getting pickier and shopping around a bit more.

"I think it shows that people are diverging more, choosing different vendors; I know we are," Gorrie said, adding that most companies are compelled to get the best deal.

Gorrie said his budget is tighter this year, but with good reason. "We had an unusually high spend last year, but this year we've gone back to normal, so it feels a lot tighter," Gorrie said.

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