As 2004 Began, economists pointed to signs of an improving economy with greater frequency. If justified, will this enthusiasm be reflected in companies' IT spending in 2004?

Some are hopeful, but non-committal, as to whether this would mean more spending on various e-commerce improvements. A recent Forrester Research report, for instance, projected IT spending would increase by only a slight percentage (1.7%) in the early months of 2004.

Jim Frome is the chief strategy officer for SPS Commerce, which specializes in supply chain enablement services, and is based in St. Paul, Minn. He, too, has seen increases in spending, both late last year and carrying over to early '04.

"I'd agree with [Forrester], although I have no hard numbers," he said. "It seems like a couple of years ago it was a kind of hunker-down mentality, a kind of a 'do the best you can' with the status quo. Last year, we had more positive conversations about technology spending and now we see some of that may actually come true."

SPS includes Grainger and Interline Brands among its industrial distributor clients. While SPS specializes in the overall supply chain, specifics will vary depending on client needs. There is no one area, then, that has jumped out as a target for increased spending in '04, Frome explained.

"We can focus on something as basic as reducing the cost associated with manually processing purchase orders and invoices, to getting into the more meat and potatoes of the supply chain, [such as] improving efficiencies around inventory, logistics, and planning," he said.

Among the areas where some see more spending occurring is in the accounts receivable end of business. Bob Shecterle, vice president of strategy for supply relationship management at PeopleSoft, has seen this coming for a while now.

"It's a function of the economic times of the last few years," he said. "Every industry, regardless of size, has been looking for ways to squeeze as much out of their operations from both cost savings and revenue potential as possible."

"The biggest thing has been the 'electronification,' if you will, of the complete accounts receivable process," said Scott Lutz, director of product marketing, People Soft/Enterprise One. "And I don't mean just on the invoice to cash-receipt side, but everything before and after that as well."

Another finding in the Forrester report speculated that the second half of 2004 would see more IT spending by companies, up to 4 percent. Frome agrees, albeit somewhat cautiously.

"We see things getting better every quarter," he said. "If that trend continues, I'd agree with [Forrester's] statement. I hope they are right, and I think I see more signs [that] that will be true than not."

The general business community is better educated in technology than ever before. So if it does spend more, it will spend more wisely. As a result, companies like SPS aren't as concerned with the education curve as they were only a few years ago. The message it delivers to potential clients is more business oriented than technology oriented, Frome said.

"You've got people more educated about where technology fits into their overall picture to support their business," he explained. "We've seen a more thorough decision-making process in most companies. They'll spend money now, but will prioritize on where they spend it more than they did a few years ago"