IT spending remains robust

IT operations and staffing account for the majority of spending, according to new report

IT spending is predicted to grow a healthy 4.9 per cent during 2008, according to a new report by the National Computing Centre (NCC).

More than half of the 120 senior IT decision makers polled (58 per cent) said they expect IT spending to keep increasing despite current economic uncertainty.

“We hear talk of a recession, but the Benchmark results indicate that IT purchasers are remaining confident about future economic conditions; they are making sure that their businesses have the right technology to deliver growth of the coming years,” said Stefan Foster, managing director of NCC.

Virtualisation, automation technologies and application such as enterprise resource planning and customer relationship management were identified as the main focus of on-going IT investment, largely based on their ability to cut operational costs.

But while the numbers of firms investing more heavily in IT will rise, the NCC report notes that total IT spending in the UK is likely to drop in 2008. That drop was explained by a decrease in the number of financial services companies participating in the survey. Historically, financial services firms are big investors in IT.

According to the report, in 2008 businesses will spend, on average, £3,275 on IT for each employee. In 2007, the amount was £3,981.

In the finance sector – where the effects of the credit crunch are most immediately apparent – the average spend on IT is £10,300 per end-user

Elsewhere, The Benchmark of IT Spending 2008 report highlights the typical IT spending patterns. It suggest that 39% of the IT budget goes towards operations; 35 per cent on IT staff; 20 per cent is accounted for by hardware spending; and 5 per cent is allocated to IT spending by end users.

The majority of the operational spending goes on existing activities (63 per cent), with just 37 per cent allocated to new developments.

On average, UK firms employ 29.4 IT staff per 1,000 end users. Again, it is t he finance industry that has the highest rations of IT staff to end users; the transport and utilities industries have the lowest.