Frustrated executives have long chafed at the difficulties of working out just how much their companies benefit - if at all - from costly IT investments.

But now that economies are stagnating and most dotcom upstarts have failed, they are taking a sharp and critical look at their IT systems and strategies.

In many cases, executives do not like what they see. "The vast majority of companies believe that they need to make improvements across all IT value-related activities," says PA Consulting in a study called Increasing business value with Information Technology.

PA also found that only 40 per cent of executives polled in Europe, the US and Asia-Pacific had confidence in the business cases used to justify their companies' IT investments.

John Little, a member of PA's global IT consulting group, is "stunned" at these findings. "It says something about the real frustrations of getting value out of IT, which are emphasised in the current climate."

Since IT is so central to corporate activity, the need to identify the real benefits of investment is especially acute. Many companies wonder what they have spent their money on - especially if they were spooked into action by the threat of online competition - and how they can control IT strategy without being left behind in the e-business race.

"We are seeing some backwash from the internet boom - there's a flight to certainty," says Alisdair Milne, head of IT consulting for the UK and Ireland at Cap Gemini Ernst & Young. Companies are also stretching out some IT projects and slowing down their equipment replacement programmes.

"Companies are becoming more rigorous. They are looking before they leap when it comes to IT investment," says Chris Gant, a partner at KPMG Consulting. "Companies have started to look at things more holistically - seeing how any project links to other areas in their business."

But whatever approach they adopt, the challenge now is for companies to make sure that their IT policies match their strategic aims. Chip Gliedman, of US-based market analysts Giga Information Group, notes that many companies devote nearly 75 per cent of their IT budgets to maintaining systems and infrastructures.

This leaves only around 25 per cent for new projects. But on average, only around a third of those, representing some 8 per cent of total IT spending, actually deliver value. Thus, he says: "It is imperative that IT aligns itself with the key corporate goals."

It is, of course, for companies to decide what their goals are. They may want to increase market share, enhance profitability, speed up innovation or raise brand awareness. Or they may be aiming at a combination of some or all of these.

They are likely to have a variety of IT projects to help them achieve their objectives, covering such areas as enterprise resource planning, supply chain management, customer relationship management, online sales and marketing.

PA recommends that companies should agree both what drives value in the business so that IT can be used to best effect, and who is responsible for realising the business value of IT.

"Many companies are frustrated by the practicalities and pressures on their IT resources and find that the impetus for delivering business benefits is lost after the financial investment and immediate project deadlines are met," PA says.

Jack McMullan, also with PA's IT consulting group, believes companies must measure the value they are getting from IT. "A lot of companies just consider 'design, build and implement' and forget that the benefits should be part of the overall project," he says.

Thus, they should look again at their IT projects to see if these are achieving their purpose. In some cases, companies may need to spend more on some projects to obtain long-term value.

Managers are now subject to a bewildering array of influences and expectations. At the same time as they are being asked to improve performance, corporate budgets are under extreme pressure.

"The number of constraints on the IT side is increasing massively," says Andy Jerram, London-based senior vice-president at United Management Technologies, the US consultancy. "There is a need for reprioritisation and reoptimisation."

Awkward though these words may be, they highlight the challenge of thinking hard about what IT strategies are supposed to deliver and then realigning these to business goals.

Companies should look anew at their objectives. These may have changed in the light of changed circumstances. "Maybe a year ago, revenues and market share were at the top of the list," says Yorai Linenberg, a partner at UMT. "Now, it may be cutting costs and improving margins."

But even if the objectives remain the same, "reprioritisation" is still necessary, he adds. IT projects should be scrutinised to see if they are contributing the intended value to the business. This should not be a one-off exercise, but be carried out regularly.

For many companies, this is a far cry from the rushed investments indulged in during the dotcom and e-commerce phase. "The problem with the e-stuff was that it was blind spending," says Mr Gliedman. "Now, it has to be more 'where are we trying to go as a business?'."

A firm business case has to be established for any investment. "'If we don't do it, we will die' is not a business case - a threat is not a business case."

Mr Gliedman warns against treating technology as a separate entity. Wholesale cuts in the IT budget could prove a false economy if business efficiencies are hampered. These could also ignore crucial links between projects. For companies wanting to improve performance without jettisoning existing IT systems, the use of middleware programmes to integrate functions is becoming increasingly important. This enables businesses to retain flexibility without being locked into expensive upgrades.

Despite the renewed emphasis on caution, safety and value, companies have not lost the will to experiment. But they are less likely than a year or so ago to commit large sums to projects with only vague payback prospects. This is not a time for bold leaps in the dark.