Johannesburg — A GROWING number of companies are cutting back on IT spending as a proportion of their overall turnover, a study has revealed, raising concern that this will affect their performance in the future.

A report compiled by software consultancy nFold and technology market research organisation World Wide Worx, found that only 39% of medium and large organisations in SA had budgeted to spend more than 1% of their turnover on IT.

The last survey, carried out in 2005, found that 63% said they planned to spend more than 1%.

Sandy Pullinger, MD of nFold, said last week that a contributing factor had been the recession. Companies had been monitoring their operational spending, leading to delays in software upgrades.

"There has been a dramatic shift in corporate IT spending patterns," Pullinger said. "When we conducted the survey in 2005, only 19% of companies budgeted for IT spend on an ad hoc basis. This year 32% said they were."

At least 35% of companies this year were also evaluating software spend on an ad hoc basis.

"It is clear that software forms less of an upfront purchase priority today than four years ago, but that doesn't mean software has declined in importance .

"We find that senior decision- makers in the organisation are more involved in large software purchasing decisions than ever before, with a quarter of companies reporting that financial decision makers now play a role... . Previously, financial executives played almost no key role."

Pullinger said that companies could well find themselves paying for this decision in the future. "Software should be driving business value, which will not happen if it's being addressed on an ad hoc basis," she said.

The survey also asked respondents which three IT trends would affect their company in the next three to five years.

In first place was mobile applications, followed by convergence and integration.