IT is the key to competitiveness, CBI claims

splashing the cash - customer demands are fuelling investment in IT according to the CBI

Customer focus rather than cost-saving is now the major driver of IT development among UK companies, according to a report from the Confederation of British Industry (CBI).

Competitiveness: The Role of IT Services report, based on a survey of 500 UK companies and sponsored by internet domain name registry service Nominet, found 52 per cent of respondents feel that greater demand from global customers is now driving their IT development.

Some 51 per cent of respondents claimed their IT development was driven by more demanding national customers. Responding to these demands, 56 per cent of companies said they are now capable of serving customers through digital marketplaces.

Investing in internet-enabled IT services has given UK companies competitive advantages with 63 per cent of respondents claiming it improved customer retention and satisfaction.

John Cridland, deputy director-general of the CBI, said: “This report shows that the main driver for developing IT services is now the ability to help companies focus on customers and add value, rather than simply cutting costs.

“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.”

He added: “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.”

The report also revealed that respondents would welcome help from government in the area of IT, with 42 per cent saying they would like support using IT services to access overseas markets.

Baroness Shriti Vadera, under-secretary of state for business and competitiveness, welcomed the report by saying: “The development and take-up of IT is critical for business growth and efficiency. We need to make sure that all firms - large and small - have access to technology that will improve productivity and, importantly, the skills to use it effectively.”

Emily Taylor, director of legal and policy at Nominet, said: “I hope this evidence can inform the ongoing international debate about how to foster an environment for innovation, investment, and the global development of the Internet.

“The survey shows that what creates Internet and IT competitiveness is a combination of factors: broadband access, regulatory environment, skills and top level management support.”