Web technology spending to rise despite economy: survey

A study released Tuesday by management firm Towers Perrin suggests North American executives plan to endure a slowing economy by increasing or maintaining rather than cutting Web technology investment.

Two thirds of the 233 executives who took part in Towers’ inaugural e-Track survey said their companies will either raise or maintain spending on Web technology while only about 20 per cent plan to reduce their investment. The trend holds especially true for spending on internal areas like online learning, online recruiting and technology infrastructure.

“External focused and internal focused, they’re saying, ‘We’re not going to decrease investments,'” said Minaz Lalani, leader of the Canadian e-business group at Towers Perrin. “They’re looking more on the strategic level, on what’s going to give them a competitive advantage.”

Lalani said by increasing or at least maintaining Web technology spending levels, companies are aiming to realize operational efficiencies including those relating to human capital. The ideal situation, he said, is to maximize and retain skilled employees and shed employees whose jobs can be automated.

“They’re wanting to leverage technology and make sure people do the right stuff,” Lalani said. “They want to have employees help themselves and customers by doing things the right way.”

But Lalani stressed that investment is directed almost as much at innovation as at cost cutting for the companies, half of which have 10,000 or less employees. While 97 per cent of respondents cited operational efficiencies as a being of high strategic importance, 85 per cent made said innovation was a top priority.

“What they’re seeing is that over the long term, this is the right way to go,” Lalani said.

The determination of responding executives, 10 per cent of whom represent Canadian companies, to continue spending on Web technology comes in spite of only moderate returns from such investments to date. While 44 per cent of respondents said results of Web technology investments partially met their expectations, only 15 per cent set those expectations had been fully met.

But Lalani said mere moderate levels of satisfaction can be attributed to planning and budgeting problems of early Web technology endeavours. He said early on companies were interested mainly in having Web operations up and running, while scant attention was paid to what benefits the technology was delivering.

‘What wasn’t in a metric was, ‘How many customers do we want online? How many sales do want online?'” he said. “Now companies are getting smarter. They’re saying ‘Why are we doing this?’ And they’re putting the right resources in place.”

That means money. Seventy-two per cent of respondents to the Towers survey said success of Web technology endeavours was most hampered by business concerns overriding implementation plans. Lanani said companies would, for example, estimate they needed $1 million for a project, realize once it began that $1.2 million was required, and cut corners to meet the $1 million budget.

According to the survey, businesses in North America are moving into the second phase of Web technology, with a focus on interactive and transaction-oriented applications allowing management of customer relationships and access for employees to human resource services.

The survey also shows more movement online results in more stress in the work environment. Eighty-four per cent of survey respondents said both employees and employers are feeling the affects of the 24/7 reality and their work is suffering as a result. Lalani said companies are increasingly looking to options like telecommuting as a means to stem worker burnout.

The e-Track survey is composed of respondents from a cross-section of industries, including financial services, manufacturing, health services and telecommunications. The results are considered to reflect the general population of companies 99 times out of a hundred with a margin of error of plus or minus six per cent.

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Jim Love, Chief Content Officer, IT World Canada

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