The results of a survey of 456 top industry executives confirm that business leaders are loosening the purse strings on technology budgets with an eye toward revenue growth.
NEW YORKThere is more evidence that the IT spending freeze has thawed. IBM Business Consulting Services this week released the results of a survey of 456 top industry executives, the results of which confirm the attitudes reported elsewhere: that business leaders are loosening the purse strings on technology budgets with an eye toward revenue growth. The finding confirms a shift in attitude away from the severe cost cutting of the previous three years.
The survey was carried out in October and November of 2003 by partners in IBMs Business Consulting Services division, which consists mainly of PricewaterhouseCoopers Consulting, which was acquired by IBM in 2002.
"In our industry, cost-cutting your way to success just isnt an option," said Joseph Reiser, CEO of Locus Pharmaceuticals of Blue Bell, Pa. He added, "We want to develop better drugs, we dont want to spend time fixing computers or making them faster."
"Clearly, growth is back on an agenda," said Ginni Rometty, managing partner of IBM BCS. The survey covered business entities with more than $500 million in annual revenues, including independent companies and units of large corporations.
IBM BCS Partner Eric Pelander said that to set aside cost containment and pursue revenue growth, the executives surveyed said they need to make their companies much more responsive to customers than previously. They also questioned whether their employees have the necessary skills to achieve growth through heightened responsiveness.
Pelander, who interviewed an insurance company CEO and a credit card company CEO as part of the survey said, "Both were on the hook to deliver value to their shareholders. They need to get more growth. Cost containment is not enough." He declined to name the executives he surveyed, citing a confidentiality agreement with them.
Pelander noted that the survey had a tilt toward companies based in the Asia and Pacific regions. "Half the sample was Asia-Pacific," he said, adding that of that amount, half were companies based in Japan.
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