Investment in IT among Europe?s top companies reached #51 billion in 1997, but still trails behind the US by about 25 per cent.
According to a new report by Spikes Cavell for 'Information Week', there are some stark differences between European and US spending habits. IT spending per employee in the US is just over #4,000 across all sectors, compared with under #3,000 in Europe, with the top 500 US companies investing an average of 2.9 per cent of their turnover in IT, compared with 2.1 per cent in Europe.
Bruce Stewart, IT analyst with the market researchers Gartner Group, explained that there is a fundamental difference in IT culture in the US. ?There is a crucial understanding of the importance of IT at CEO level in the US. IT really matters, and because of this ideas move at greater rapidity. This is one reason why the US is two years ahead of Europe in terms of Year 2000 compliance.?
The survey, which lists the top 500 European corporations in terms of IT investment, found that Germany has the highest IT spend among top corporates (#12.5 billion), though this is shared by only 85 organisations. The UK, with a slightly lower spend of #10.5 billion, dominates the survey with 128 organisations in the top 500.
It also has positive messages for European companies. ?The study does confirm that US corporations spend more on IT than their European counterparts, but the important thing is to look at how far Europe has come," said Jeff Gould, the report's publisher. "With Europe?s top corporate IT departments spending the better part of $100 billion this year, no one can say that this continent is missing out on the information revolution.?
The study also revealed that European corporations are slowly changing their attitude towards IT, and are beginning to extract the maximum business benefits out of IT budgets.
Luke Spikes, managing director of Spikes Cavell, which provided data for the report, agrees that there has been a shift to a more proactive attitude towards IT in Europe, particularly at board level.
He said: ?There has been a recognition that IT can move the business forward, and also control is now been taken at board level because in the past IT investment has been left to technologists, which in many cases has been a disaster.?
The survey noted that the UK?s IT expenditure tends to be mostly requirement led, and rather less visionary than that of European counterparts.
But this can also lead to greater efficiency. ?By contrast, European culture dictates that it will not tolerate the waste that the US has experienced regarding IT investment," said Stewart. "There is a tendency to hold on to investments and not branch out into new areas. However, European companies are the best in the world at exploiting existing opportunities, and for that reason they will eventually catch up with the US in terms of IT spending.?
Neil Spencer-Jones, managing consultant at the National Computing Centre, agrees. ?IT in the UK is driven bottom up. The reality is that IT doesn?t have the right profile, and there is a clear lack of understanding of what IT can deliver.?
He called for the introduction of an IT audit so that businesses can more effectively look at how IT can solve their problems. ?Just as financial auditors form an opinion on the robustness of the financial control systems, IT auditors should test how robust IT systems are.?
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