BUSINESS SPENDING on technology is set for a modest increase according to new research, which found that the recession has made firms increasingly appreciate the contribution that technology makes to their success.

Almost three-quarters of business and IT executives (72 per cent) surveyed by the Economist Intelligence Unit said they place greater value on the IT function than they did before the downturn. The survey also found that 42 per cent of organisations plan to increase selective spending on IT projects, with 11 per cent saying they will allocate more money to IT across the board.

The research, sponsored by Accenture, polled 557 senior executives in Ireland, the US, UK, Germany, France, Spain and Italy. Irish and UK executives emerged as the most confident, with 63 per cent saying they expect technology investment to increase this year.

“It might seem counterintuitive, but that is what’s happening. Companies stalled investments for 12 months and now we are in a situation where they need to regain market share or reorganise themselves and go after a new customer base,” said Hilary O’Meara, head of Accenture’s technology practice in Ireland.

That does not mean a return to the days of dotcom excess. IT projects will be managed more rigorously than before, said Ms O’Meara. The research found that over 75 per cent of large firms now measure the performance and benefits of their technology investments.

“We will see a lot more scrutiny around how long it will take to see a return on investment,” said Ms O’Meara. “Large two- or three-year projects with big upfront investment are definitely not flavour of the month.”

Some projects will be aimed primarily at helping businesses to save money using technologies like virtualisation and open source software, the survey said.