Three-quarters of CEOs surveyed say their companies are involved in e-business, and are planning to spend an average of 11.1 percent of their operating budget in support of e-businesses over the next 12 months, PWC reported.

"This level of funding is projected to generate 14.9 percent of revenues for their corporate parents," said G. Steve Hamm, managing partner for PricewaterhouseCoopers' middle market advisory services. "Only 4 percent of the hypergrowth CEOs we spoke with are allocating 80 percent or more of their operating budget to e-business," he added. "In fact, only 3 percent are fully involved, allocating their entire operating budget."

Service companies have significantly higher e-business revenue expectations than their counterparts in the product sector and are earmarking far more in support, according to a PwC survey of chief executives of 441 product and service companies with revenue of $1 million to $50 million.

Eighty-four percent of service companies polled are involved in e-business, compared to just 68 percent of their counterparts in the product sector. Service companies project that their e-business will contribute an average of 20.6 percent of corporate revenues over the next 12 months, and they are committing 17.1 percent of their operating budget over the same time period. In contrast, product sector firms expect to achieve less than half the revenue impact, 9.4 percent, and are committing a more modest 5.0 percent budget allocation, PwC said.

Overall, information technology represents 62 percent of e-business budgeting, or 6.9 percent of operating budget for the companies surveyed. IT spending plans call for a nearly even split between personnel (51 percent) and hardware and software applications (49 percent), according to the report.

The e-business IT budget commitment for service companies is 10.6 percent of operating budget, split 57 percent for IT personnel and 43 percent for hardware and software, while product sector growth firms are committing just 3.1 percent of total operating budget for e-business IT, allocated 56 percent for hardware/software, and 44 percent for IT personnel.

"Plans for sustained capital spending in support of e-business -- particularly by service companies, which see a strong fit with their business -- will continue to produce substantial dividends for our economy, going forward," Hamm noted.

-- SmartPros News Staff

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