Internet Spending Largely Unchanged

 
 
By Mel Duvall  |  Posted 2001-03-19
 
 
 

Despite the abrupt economic downturn and the hammering that technology stocks are taking, many executives in charge of Internet commerce initiatives said they have not seen their budgets slashed.

However, according to an exclusive survey of such managers commissioned by Interactive Week, increasing attention is being paid to e-commerce projects that will help corporations cut costs.

The informal survey, conducted by BestTel, polled 400 interactive managers on March 14 and 15 to find out whether the market for Internet commerce software, hardware and services has been affected by the gloomy market conditions.

The survey found that a clear majority of the 100 respondents, 69 percent, said their budgets for Internet and e-commerce initiatives have not been affected, while a further 10 percent said their budgets have increased by an average of 17 percent.

Not all companies have gone unscathed, however, with 21 percent of respondents saying budgets have been cut by an average of 30 percent.

"If anything, were going to beef up our Internet activities," said Todd Krause, an executive at financial services firm Harris Associates in Chicago. "You get to the point where you become so dependent on this stuff that you have to keep upgrading, or risk falling behind."

Harris Associates has just handed over its time and expense management operations to Concur Technologies through an application service provider agreement. Krause said the primary driver was a desire to cut costs, while a secondary factor was a need to give employees the ability to access the applications via the Internet while on the road.

Interactive Week asked I-managers if there has been a change in spending priorities as a result of the economic conditions. About 55 percent said there has been no change, while 28 percent said there was more focus on cutting costs. About 19 percent said more attention was being paid to improving customer service, while 17 percent pointed to a goal of increasing online revenue.

In terms of where money would be spent, the big winner appears to be Internet security, with 51 percent saying they would spend more in the months ahead. Areas feeling the pinch are outsourcing, with 36 percent planning to spend less, and consulting and systems integration services, with 35 percent spending less.

"Everyone recognizes e-commerce presents a huge opportunity for them to be more effective in the way they do business," said Craig Hodgetts, manager of outsourcing at Deloitte Consulting.

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