AMR Research says it has detected an upturn in the economy with 80 per cent of companies expecting their 2004 IT budgets to grow or remain stable.
Overall budgets are expected to grow by two per cent while companies continue to outsource Web hosting and data center services in an effort to reduce costs and focus on core competencies. Applications developemnt is emerging as the primary area for outsourcing, mentioned by more than 57 per cent of companies.
AMR’s findings also suggest that spending on Enterprise Resource Planning (ERP) applications and Supply Chain Management (SCM) applications would continue to grow in 2004, while the overall budget allocation for customer management applications would remain constant in 2004.
"We are seeing purse strings begin to loosen up with the growing demand to replace older systems and the belief that the economy is beginning to improve," said Jim Shepherd, senior vice president at AMR Research. "For this new IT spending to be of most benefit, companies must act now to ensure their IT programs are focused on improving business processes, and ensuring consistency across the enterprise."