CBI report shows web investments paying off for UK firms

That’s chief among findings of a report on information technology’s role in UK competitiveness, published today by the CBI, which surveyed 500 UK companies. It reveals 63% of respondents citing improved customer retention, 60%, better tailoring of products and services, and 57%, new marketing and delivery methods. However mid sized companies have benefited less in terms of entering new markets and geographies. The report, sponsored by Nominet – the internet registry for .uk domain names – suggests that customer focus, rather than cost saving, is now the major driver for IT. More demanding global customers were cited as a driver of IT development by 52% of respondents, and national customers by 51% – with 56% saying they are now capable of serving customers through digital marketplaces. Other major drivers were the varied costs of different locations (47%) and low-cost global competition (35%) – with UK companies seeking efficiency and competitiveness advantages. Interestingly, UK companies are recruiting more foreign IT staff, up seven percentage points on two years ago, while 25% of companies are hiring Indian IT staff and 11% Chinese IT staff. However, only 13% of companies cite an inadequate UK skills base as the reason for hiring foreign staff: main drivers are international growth (61%) and project requirements (46%). Nevertheless, more than two-thirds of firms spend a considerable amount of their IT budgets on outsourcing, with 24% of those who do spending 11—20%, while 17% spend 21—40% – many to UK-based providers. Baroness Shriti Vadera, Under-Secretary of State for Business and Competitiveness, has welcomed the report. “The development and take-up of IT is critical for business growth and efficiency. We need to make sure that all firms have access to technology that will improve productivity and, importantly, the skills to use it effectively,” she said. “At a time of tougher economic conditions and ever-increasing international competition, it is vital that all firms understand how they can use IT to drive performance and create goods and services customers want,” commented John Cridland, deputy director-general of the CBI: “The report highlights ways for government to help companies better exploit the benefits of IT. Business wants clearer and more consistent policies on e-commerce, support for overseas activities, and measures to address technology and skills weaknesses, and security vulnerabilities,” he added.