Confidence ‘Will Drive Company IT Spending’

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UK service sector firms are set to increase their IT spending as confidence in the economic recovery grows, a new survey has found.

The Confederation of British Industry (CBI) quarterly Service Sector Survey found overall optimism was at its highest since the poll began in 1998, with the volume of business and staff headcounts both at their highest since November 2007.

All this is translating into raised spending intentions by firms providing services to consumers. The number of enterprises noting that their current systems capacity would be a barrier to new growth was at record levels, while those who listed the uncertainty of demand as a constraint was at a six-year low.

The greater investment in IT will be part of a larger whole, as business and professional services providers in particular have signalled their plans to spend more in these areas, with the commitment to investment at its strongest since May 2004.

For many companies, the need for more capacity will be a matter of greater data storage. Many firms carry details of their customer base and if this is to grow as soaring confidence and incomes translate into more purchasing of goods and services, the ability to store more data will be vital.

With that, of course, will come the need to keep information safe and secure, while those companies whose offices have a relatively low IT use but decide to sink some of their investment funds into digitisation and paperless premises can benefit from creating more floorspace; that could be very useful if they are taking on more staff as part of their expansion plans.

The CBI survey is not alone in providing an indicator of increased growth and confidence. The latest Markit/CIPS Purchasing Managers Index suggested the swiftest rise in new work in 16 years was taking place.

It also noted that this was impacting on the capacity of firms to deal with their growing workloads, with backlogs rising. Employment was also increasing and this may offer part of the solution, but it may be that one of the keys to sustaining the expansion in the longer term is investment in more data storage.

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/". Confidence ‘Will Drive Company IT Spending’/. November 26, 2013. Storetec.