EL SEGUNDO, Calif., Nov.18 -- The single greatest challenge confronting chief information officers throughout the world is to assure that the priorities of their information technology organizations are in line with the business strategies of their corporations, according to a survey of almost 600 I/T executives from around the world by Computer Sciences Corporation (NYSE: CSC).

The company's 11th Annual Critical Issues of Information Systems Management Study revealed that 72 percent of the 594 information technology executives polled ranked "Aligning I/T and Corporate Goals" as their top concern. This urgent message was underscored by the fact that this is the fourth consecutive year the alignment of corporations' business strategies and I/T priorities was rated as the top challenge.

"Information technology can no longer simply support a business -- it must be effectively used to help drive success," Van Honeycutt, chairman, president and CEO of CSC, observed. "The relationship between a corporation's information technology organization and its corporate strategy has to be synchronized. Otherwise, companies run the risk of having mediocre business practices which can damage relationships with customers, employees and trading partners. The Web can help companies align I/T and business issues by enabling them to communicate and transact with these three global audiences almost instantaneously and in a secure environment."

Most I/T executives around the world indicated they were concerned about the lack of their department's contribution to the effectiveness of their companies. In fact, almost 66 percent of this year's respondents felt the users of technology within their companies would rate the overall effectiveness of information systems only as average or acceptable, rather than good to excellent. This is a significant increase from 1996 when 55 percent felt the information systems of their companies would be viewed only as average or adequate by users.

"This shows that from the I/T executives' perspective, things are not improving but are getting worse," Honeycutt pointed out. "CIOs are frustrated at the slow pace of getting this important strategic corporate resource aligned with the business strategies of their companies.

"And interestingly, these concerns are shared by information technology executives in North America, Europe and Asia/Pacific almost equally," Honeycutt pointed out. "Clearly, no one international region is further along toward achieving this critically important goal."

CSC has queried I/T executives on critical technology issues since 1988. The 594 respondents to this year's survey include chief information officers and vice presidents and directors of technology departments representing organizations in 11 different areas such as financial services, healthcare, consumer goods, retail, chemicals, energy and government. Of the total respondents, 36 percent represented North America organizations, 16 percent were from European companies while 48 percent were from companies in the Asia/Pacific region.

I/T Budgets Increase, But Hardly Keeping Pace; Alternatives Sought

In another key finding, the CSC survey showed that budgets of more than half of I/T departments throughout the world have increased. Yet, according to the executives, in year-to-year comparisons, the I/T budgets increased six percent in 1997 and only 6.2 percent in 1998.

"Essentially, I/T departments have been required to keep pace with technological breakthroughs and rapidly increasing demands with little in additional resources," Honeycutt said. "Consequently, I/T executives are increasingly turning to alternative means such as outsourcing as they continue to try to align their information systems with corporate strategies."

According to the survey, more companies than ever before are outsourcing data-intensive activities and infrastructure as ways to reduce or maintain costs while acquiring new skills in key areas such as ERP. Some 78 percent of North American respondents have outsourced and almost 20 percent plan to do more. In Asia/Pacific 80 percent of the companies have outsourced and 30 percent will do so in the future, while in Europe, almost 70 percent of the organizations are outsourcing.

Survey Highlights Y2K Preparations

Perhaps no other technology issue has generated as much global attention recently as remedial preparations for the impact the Year 2000 will have on technology systems.

Of those surveyed, 16 percent reported that they have already deployed Y2K remedial solutions. On a regional basis, 21 percent of North American organizations indicated they have deployed Y2K solutions; 16 percent of the European respondents have solutions in place; and only12 percent of firms in Asia/Pacific are ready for the new millennium. Another 63 percent of the respondents are at various stages of remediation.

The remaining 21 percent of organizations around the world surveyed by CSC are only now assessing the Y2K problem. A regional breakdown shows that 28 percent of the respondents from Asia/Pacific have only reached the initial assessment phase, compared with 17 percent for operations in North America and 11 percent for Europe.

"Those organizations that are still in the early stages of assessing Y2K solutions will clearly suffer negative consequences in 2000, some possibly as severe as interruptions of mission-critical business processes" Honeycutt noted.

In terms of budget allocations to address Y2K remediation, North American companies will clearly outspend their counterparts in Europe and Asia/Pacific. Upon completion, North American organizations will have spent more than $16.5 million each, compared to just under $13 million by European firms and a similar amount by those in the Asia/Pacific region.

Interestingly enough, however, European companies have spent more than $5.5 million on Y2K remediation to date, more than their North American ($3.8 million) and Asia/Pacific ($3.7 million) counterparts.

"One possible reason why European companies will not ultimately spend as much on Y2K remediation," Honeycutt pointed out, "is because of their pending expenditures on another massive I/T expense, the European monetary conversion."

For further information about CSC's 1998 Critical Issues of Information Systems Management Survey write to cscitsurvey@csc.com.

CSC had $7.1 billion in revenues for the 12 months ended October 2, 1998. Headquartered in El Segundo, Calif., the company has 47,000 employees in 700 offices worldwide and provides clients with a wide range of professional services, including management consulting, information systems consulting and integration, and operations support. More information about Computer Sciences Corporation is available at http://www.csc.com.