BusinessCompany NewsFDs lack IT investment strategy

FDs lack IT investment strategy

Few finance directors in the UK address IT purchasing strategically having only a short term strategy, according to a report.

Link: Accounting scandals hamper IT spending

Its Technology Acquisition Report, which interviewed 100 finance directors from UK companies with over 500 employees, found that 45% of companies have only a short-term technology spending strategy.

And the report says UK companies are less likely to lease IT equipment than their US counterparts.

‘It is a mindset thing,’ said Kirstine Wilson, marketing director at Siemens Financial Services. ‘Only around 30% look at leasing for IT but if you look at assets such as vehicles – where there is a lot of obsolescence – the figure is much higher. But there is now an acceptance of the accelerated cycle of obsolescence and refreshment in IT.’

IT investments are made in cash by 68% of companies, which the report said suggested impulse purchasing rather than a measured approach.

Over 50% of respondents expect to renew desktop hardware at three year intervals, but had no fixed timetable for back end hardware renewal or software products.

Seventy eight per cent also said that reviews of technology happened ‘as and when,’ rather than to a timetable. But budgeting for IT is assessed more regularly, with IT financing being reviewed yearly by the majority of companies.

System security, security of information and use of technology to gain competitive advantage were seen as the top three reasons for IT purchasing.

Leasing IT systems is less popular in the UK than it is in the US, with 32% of UK businesses funding their technology in this way, compared with 70% in the US.

Although UK firms are comfortable with leasing schemes for other business tools, such as office equipment and cars, this has yet to penetrate to IT spending.

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