UK IT spend – it's not so bad after all

At last, a welcome change from all those market carnage / vendor roadkill reports. The National Computing Centre(NCC) today releases its twentieth annual survey of IT spending in the UK. And the results are faintly encouraging.

The NCC 2001 survey is based on answers from 390 organisations, with a collective annual IT spend of £1bn-plus.

First the good news for IT vendors. Confidence in IT spending remains buoyant, according to the NCC poll, with a small majority of respondents (57 per cent) forecasting a spending increase of 2.4 per cent in the current year, up from 1.8 per cent the previous year.

Now the not so good news: NCC took a second snapshot of opinion following the September 11 attacks; while 73 per cent of respondents said that their spending plans remained unchanged, 27 per cent had revised IT spending plans in the light of changing economic prospects. Not so good, but not so terrible either.

Curate's Egg

The NCC survey records a huge disparity of IT spend between various industries - with the annual amount per user in the health sector (£1,325) coming in at less than 10 per cent of that of users in the finance sector (£13,685).

Local government joins health as "Cinderella sectors', so far as the NCC is concerned. Councils' total combined IT spend per end-user(£2,203), compares poorly with the median annual IT spend across all sectors of £3,022 per end user.

Central government is more generous to itself, with an annual spend of £4,444. The difference between local and central government for capital spend per end user is even more marked (£463: £1,333), the survey notes.

There are also huge variations in the numbers of IT staff per end user, with the finance sector and averaging 106 IT staff per 1000 users, while the Health sector makes do with 19 per 1000.

Accountability

Do organisations get value for money from their IT spend? More to the point do they know how to evaluate whether they are getting value for money in the first place. According to NCC, control and evaluation is patchy. Eighty per cent of organisations exert central control over their IT budgets, but only 56 per cent have "mechanisms for evaluating the effectiveness and value of that spend".

The NCC Says

NCC views as essential the accelerated take-up of IT by the Manufacturing and Distribution sectors, and by Local and Central Government if competitiveness and e-government targets are to be achieved. The Health sector in particular is badly served by its low expenditure and low number of IT staff per end user.

There needs to be greater accountability for the measurement of IT spend if the IT function is to be better represented at company board level. ®

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