IT tops manufacturers' spend for the first time

NEWS IT spend this year in the manufacturing industry has outstripped spend on plants and machinery in the UK for the first time, according to the latest figures from Bourton Group. The consultancy conducted its annual survey of investment within manufacturing, an industry which has traditionally spent the majority of its investment in factory machinery. However, this year's figures - compiled by questionnaires from more than 300 manufacturing companies - sees information technology spend just edging in front of plant investment. Stuart Smith, a director at Bourton Group, said the change had occurred despite investment in IT being much harder to justify through traditional measures than cash going into other areas. He said: "We saw a huge rise in money spent on IT to beat the millennium bug. What we see now is IT departments continuing to justify this investment post-Y2K and then expanding upon it." The survey also finds top company executives think IT investment will continue to rise for the foreseeable future. Smith explained: "CEOs are finally seeing that ebusiness is here to stay, and are suddenly running to catch up. The problem is that a boardroom mentality of 'must-have-it' towards IT hides the fact that many don't know why it will benefit them." The sector has been accused of being slow to take up ebusiness ideas, but the growth of online procurement hubs over the last year particularly has stimulated IT investment. Jonathan Stephenson, consultant for analyst house Butler Group, said the figures were not surprising. "Most successful manufacturing companies now are actually not manufacturing companies in the strictest sense - they assemble parts manufactured by other companies. In this business organisation is the most important thing. Therefore most manufacturers will have high IT costs because they are essentially information companies in the same way banks and retailers are." David Taylor, president of IT director's association Certus, said: "While there are still many manufacturing companies that haven't embraced ebusiness, these figures are hugely exciting. They show that the virtual world really is here to stay in this sector."