IS Budget Allocations in Organizations with E-Commerce Applications in Place

September, 2002

Internet users are beginning to show their preferences. There has been a considerable amount of research accumulating from credible sources that indicate significant emerging patterns of Internet usage. Health information, travel services and information, online entertainment, and retail shopping have become some of the most popular online activities. We have also started to grasp what works and what flops on the web. Customer service, user friendly sites, and email marketing are among the most important aspects of successful Internet e-commerce.

The bottom line for IT departments is that the pressure is still on and e-commerce is not going to go away. Worldwide e-business product spending will reach $78 billion in 2002. The United States will account for $32.8 billion of the worldwide total. European countries will spend $22.9 billion, Asia/Pacific will spend $18.2 billion, and Latin American countries will spend $2.2 billion.

There are several significant differences in budget allocations between organizations with e-commerce applications in place and organizations without e-commerce applications in place.

  • Personnel costs comprise 37.7 percent of the IT budget in organizations with e-commerce applications in place compared to 30.8 percent in organizations without e-commerce applications in place.
  • LAN servers/superservers comprise 7.9 percent of the IT budget in organizations with e-commerce applications in place compared to 11.4 percent in organizations without e-commerce applications in place.
  • Workstations, desktop PCs, portables, and notebooks comprise 7.8 percent of the IT budget in organizations with e-commerce applications in place compared to 11.2 percent in organizations without e-commerce applications in place.

September 2002