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December 12, 2010

UK businesses failing to invest in IT innovation: Fujitsu

23% of an IT budget is invested in innovation versus 38% on IT operations and maintenance

By CBR Staff Writer

The cut backs in IT budgets were cited as an important reason for lack of investment (47%) in IT innovation, but 67% stated that it is ‘too easy to keep things ticking over’ as the primary reason for lack of investment in IT, according to Fujitsu‘s first bi-annual Business Certainty Index.

The report revealed that approximately 23% of an IT budget is invested in innovation versus 38% on IT operations and maintenance, which is expected to increase marginally (by 1 or 2%) in 2011.

Fujitsu private sector business managing director Duncan Tait said it is quite right that the economic climate has made businesses take stock and reassess where their priorities are and in many instances this has been for the better.

"However, the ‘keep calm and carry on’ mentality is not enough and in uncertain times businesses need to be prepared to fight, adapt, be agile and innovate in order to compete successfully both nationally and internationally," Tait said.

The study showed that Business intelligence topped the list of areas for investment over the coming year with 36% of companies stating it either their first or second priority.

Moreover, this figure rises sharply in the financial services sector to 44% of businesses while virtualisation and open source have minimal interest levels across all sectors, however cloud will be driven by the retail sector with 40% of retail companies seeing it as a key investment area in 2011.

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Application transformation is also high up the agenda for companies in the financial services sector with 41% seeing it as an area of focus for 2011.

The report revealed that business merger and acquisition activity is led by the transport and retail sectors respectively.

Approximately, 42% of the transport industry report that business merger activity is likely to be up in 2010 compared to 2009 and 39% of the retail sector are highlighting acquisition activity as greater than in 2009.

Further, the retail sector is the most confident in being able to gain investment monies for new ideas, with 54% seeing it as achievable versus only 32% in the financial services sector.

In terms of IT investment, 82% of businesses feel that IT investment will be back to the levels of the end of 2007 by the end of 2011.

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