Japanese firms plan to cut their information technology-related investment by 0.3 percent in fiscal 2002, according to the Japanese unit of U.S. high-tech consulting firm Gartner Group Inc.

The decline, which follows a 6.7 percent rise in fiscal 2001 and a 5.9 percent advance in fiscal 2000, shows that companies are becoming less enthusiastic about IT spending, said Gartner Japan Ltd.

The findings are based on a survey carried out on 1,230 companies, excluding those with a workforce of less than 50.

According to the results of the March survey, 43.2 percent of the firms said their IT-related spending plans remain unchanged, while 29.2 percent said their spending will decrease and 27.6 percent foresaw greater expenditures, according to Gartner Japan.

It said that in March last year, 18.1 percent of the respondents said they would increase their IT spending by more than 20 percent in fiscal 2002, but that the figure had shrunk by nearly half to 9.6 percent in the latest survey.

“This apparently is largely a result of the companies’ own earnings results in fiscal 2001 as well the uncertain prospects of the domestic economy. At the same time, it appears that one of the main reasons for a decline in investment is the perception that IT investment does not enhance business in the short term,” it said.

Gartner Japan said, however, that while firms are generally thinking of cutting spending on hardware and human resources, they are looking to spend on software, outsourcing and networking.

“IT investment in fiscal 2002 as a whole is on a downtrend, but we think there will be a relatively high demand for solutions and outsourcing services, including application service provider services, which will lead to efficient operations of existing IT systems,” it said.

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