Innovation a low priority for small firms' IT

Spending focused on improving existing systems

IT budgets for small businesses are expected to increase by more than 12 per cent this year, but innovation is being pushed to the side, according to research.

The report on IT budgets by analyst AMR Research reveals spending is focused on improving existing systems, rather than investing in new technology.

‘The numbers look really good, but 20 per cent of the money being spent is on compliance, so actually there is not that much free money floating around for innovation,’ said AMR analyst Nigel Montgomery.

In the 2005 report, product innovation and development was the main focus for business initiatives, but this has now shifted to better use of data throughout organisations. Containment of IT costs is also a new priority.

Companies that have fully integrated IT into the manufacturing process are now investing in software to address customer issues, including pricing management and customer retention.

What do you think? Email us at: [email protected]