Local IT industry set for modest recovery: IDC

Last year was not the IT industry's annus horribilis after all, according to the latest findings of an IDC executive survey. It shows IT spending trends and CIO attitudes in Australia as surprisingly positive against the recession cloud that analysts predicted for 2002.

Addressing IDC's Directions 2002 Conference, IDC InTep Forum manager Peter Hind said while it was widely perceived the IT industry had struggled to survive budgetary constraints last year, the results of a recent study covering 300 trans-Tasman IT executives painted a refreshingly different picture.

"The perception is 'we never had it so tough'; that quite a few of us ate rice pudding last year, but is this perception valid?" he asked.

According to the survey covering CIOs from all industry sectors, and despite a gloomy economic outlook, IT spending was relatively steady during 2001.

However, IT spending is plateauing now, Hind said, because it is far less an executive priority or strategic area than before.

IT spend as a proportion of annual turnover is around 2 per cent, according to IDC research.

Hind said the way business perceives IT is moving from a "galvanised view to one of operational performance".

He suggests this change could be a good thing. "We're moving away from a panacea of [business] problems to a realisation that IT is just a contributor to solving business problems."

Compared to six months ago, current economic sentiment is stronger among IT and business leaders from the top end to medium-size sector.

Among CIOs the e-business market is seen as a hot investment.

Hind said most of them were assessing how they could "seriously" harness e-business for efficiency gains and competitive advantage.

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