UK Plc: "Soberly upbeat"

Three-quarters of executives running UK companies believe that the economy is in recovery mode, and more than that identify technology as a key ingredient for keeping improvements coming.

This rosy forecast, from an Economist Intelligence Unit (EIU) survey of 153 director-level executives in February and March does, however, come with some caveats. There is widespread fear that too much of the UK economy depends on consumer spending - which may still prove fragile if the housing market deteriorates or there are interest rate or tax rises - and that Chancellor Gordon Brown's growth forecasts are overly optimistic.

Dennis McCauley, EIU director Global Research Technology, said: "[UK executives] are in general optimistic but cautiously so. You could call them soberly upbeat."

The study, put together as a white paper called 'A science, not an art; Growth Strategies in the UK', and sponsored by SAP, found a maturing in the way that most companies do business, with a focus on retention of customers and the best employees as well as a continuing focus on eking out further productivity gains.

McCauley said: "The late 90s were all about customer acquisition. That's not happening anymore, certainly not in areas such as mobile [telecoms]."

The rise in customer relationship management (CRM) is music to the ears of software giant SAP, which, according to figures from investment bank UBS, is now the market leader in dollar terms, ahead of Siebel.

"My favourite comment from this research was 'I don't need advertising, I need CRM'," said Peter Robertshaw, SAP director of marketing and new business development.

But while a retrained approach is probably healthy for many of the companies surveyed, it also points to a knock-on challenge - selling is much harder. Forty-nine per cent of respondents cited competitive pricing pressures as the greatest constraint on growth - presumably as buyers are much stingier as to what they'll pay.

A further 40 per cent mentioned the rising burden on governance and compliance - though recently this has also been a way for cash-strapped CIOs and other IT chiefs to get certain projects signed off.