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May 18, 1988

UK CORPORATE COMPUTER SPENDING TO RISE 11% THIS YEAR – PRICE WATERHOUSE

By CBR Staff Writer

Information Technology strategy planning in British companies is now passing from the data processing manager to an director with specific responsibility on the board, and only 39% of data processing managers will be responsible for corporate computer and communications planning in five years time. So says accountant and consultant Price Waterhouse, which yesterday published the latest in its annual Information Technology Review based on a survey of 750 data processing managers and, for the first time, 250 chief executive officers. The chief executive survey, which was carried out in association with the Financial Times, shows that top management is now far more aware and exercises greater control over the company’s information technology budget. It is estimated that five years ago 41% of companies employed no performance measurement techniques at all and consequently computer costs were soaring out of control. However there has been a dramatic increase in measurement techniques which has enabled management scrutinise its budget resulting in a UKP100,000 reduction in real terms in the average data processing department budget in the last three years. There has also been a shift to user’s lib, with user-controlled day to day applications now double those controlled by data processing departments, compared with a four-to-one domination by data processing departments five years ago. However with computers now being aimed at increasing competitiveness rather than achieving operational savings, chief executives are finding it more and more difficult to assess the return on their investment. Nearly three times as many executives as five years ago – 24% say they feel that they are being pressurised into spending more on computing by arguments that their competitors are spending more. The cost containment policies are beginning to break down and the report predicts an 11% rise in computer spending this year, the biggest rise in three years. The survey also takes a swipe at what it describes as the prodigious claims for artificial intelligence by pointing out that only 11% of UK companies have tried out expert systems and only 7% have actually put them into use: indeed many questionnaires were returned asking what an expert system actually is. The problems of delivering systems to time, cost and specification tops the worry list of UK data processing managers and are characterised by an industry-wide problem of low quality software. Finally the report says that one in three top managers have computer facilities on their desks – but they rarely switch them on, preferring to rely on traditional information sources.

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