Fujitsu launches results of first bi-annual Business Certainty Index

London, 10 December 2010 – The results of Fujitsu's first bi-annual Business Certainty Index*, a pulse check of the mood of British business, has shown apathy is the main reason for the lack of investment in IT innovation. Cut backs in IT budgets were cited as a significant reason for lack of investment (47%) but more worryingly 67% stated the fact that it is 'too easy to keep things ticking over' as the primary reason for lack of investment. This is echoed by the fact that only 23% of an IT budget is invested in innovation versus 38% on IT operations and maintenance – a figure that is set to only increase marginally (by 1 or 2%) in 2011.

Duncan Tait, managing director of Fujitsu's Private Sector Business, said: "It is quite right that the economic climate has made businesses take stock and reassess where their priorities are – and in many instances this has been for the better. However, as a nation that is proud of its innovation heritage, my concern is that the very low investment levels we are seeing at the moment will simply be too low to help businesses adapt to the changes we're all currently facing.

The 'keep calm and carry on' mentality is not enough. In uncertain times businesses need to be prepared to fight, adapt, be agile and innovate in order to compete successfully both nationally and internationally."

(Click here to view a video of Duncan talking more about his views on the current business environment and how businesses are responding in uncertain times.)
 
Investment Focus
Business intelligence tops the list of areas for investment over the coming year with 36% of companies stating it either their first or second priority. Interestingly this figure rises sharply in the financial services sector to 44% of businesses. Virtualisation and opensource have minimal interest levels across all sectors, however cloud will be driven by the retail sector with 40% of retail companies seeing it as a key investment area in 2011. Application transformation is also high up the agenda for companies in the financial services sector with 41% seeing it as an area of focus for 2011.

Investment and risk
Business merger and acquisition activity is led by the transport and retail sectors respectively. 42% of the transport industry report that business merger activity is likely to be up in 2010 compared to 2009 and 39% of the retail sector are highlighting acquisition activity as greater than in 2009. Unsurprisingly operational risk is rated the area most important when setting the strategic direction of a business with IT risks rated well behind financial, people and operational. This is felt most sharply in the transport sector where 70% of companies see it as the single most important factor. The overriding focus on operational investment is deemed to be preventing businesses from being able to generate rapid change in their organisations – 52% across the board but rising sharply to 67% in retail.

The retail sector is the most confident in being able to gain investment monies for new ideas, with 54% seeing it as achievable versus only 32% in the financial services sector.

In terms of IT investment 82% of businesses feel that IT investment will be back to the levels of the end of 2007 by the end of 2011 – 2007 is widely regarded as the peak for IT investment.

Certainty and optimism
The coalition government has got a cautious backing from British business with by far the majority agreeing that the new government has a great chance to positively impact British business. This sense of optimism is shared by the fact that 56% of businesses feel more confident in Vince Cable as business secretary, compared to his predecessor Peter Mandelson. Interestingly this figure is much higher with the retail sector, at 64%. This commercial optimism is echoed with a greater sense of personal optimism with 53% of those asked saying that there are more optimistic about their own jobs compared to 2009.

* The Fujitsu bi-annual Business Certainty Index was carried out in the Summer of 2010 and interviewed 100 business leaders across the retail, transport and financial services sectors. 50% of those asked were either CMO/marketing director or CFO and the other 50% were CIO/IT decision maker level.

The full research results can be viewed here.