Companies are spending 20.3 percent of their 2003 information technology budgets on e-business initiatives according to a third annual study by Line56 Media and consulting firm A.T. Kearney. Comparison with prior Line56/A.T. Kearney research (2001: 17.5 percent; 2002: 19.3 percent) shows continuing growth of e-business initiatives relative to overall IT expenditure.

Line56 and A.T. Kearney surveyed companies with greater than US$250 million in revenue and found that although they are currently spending an average of $42.6 million on e-business initiatives, their investments are being made behind user demand. The study also found e-business spending is expected to grow at 2.5 percent in 2004.

The research shows that 38 percent of all e-business spending is directed toward networking and infrastructure initiatives like server hardware, server software and databases. In the area of e-business applications and tools, the majority of spending is being directed toward enterprise resource planning (ERP), portals, supply chain management (SCM), customer relationship management (CRM) and content management initiatives.

"Despite the attention that new areas of e-business like mobility solutions and web services are attracting, traditional investments still take the largest portion of funding," said Bob Haas, vice president, A.T. Kearney. "These findings support our observations that successful companies are taking a more pilot-driven approach to adoption of leading edge technologies."

The research comprehensively benchmarks e-business investment and also explores areas of e-business governance finding management of e-business is now most commonly centralized within the corporate technology organization. These findings differ significantly from Line56's "Who's in Charge" research which in December 2001 showed e-business to be predominantly managed within operating companies or as standalone units.

"In 2001 respondents also indicated that centralization was the direction of their most recent e-business reorganization. Today we are clearly seeing that this shift has taken widespread effect," commented Paul Higgins, chief executive officer, Line56 Media. "Attempts to control costs and increase standardization across operating units are driving the centralization of e- business governance. Our research has validated these efforts by confirming that those companies with e-business units centralized within IT have a greater extent of both standards definition and adoption across the organization."

For a free copy of the Line56/A.T. Kearney E-Business Investment Benchmarking Study visit http://www.line56.com/research/contributor.asp?ID=24

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