One in Four CIOs Cut IT Spending This Year
|
I've been wondering if the recession, if that's what it is, will cause CIOs to start cutting their budgets. Gartner just released its survey on first-quarter 2008 IT spending and reports that U.S. IT budgets are continuing to grow on average, but that growth rate is declining. (In fact, it mirrors the headline from our own recent spending study -- Spending Growth Slows, But No Panic.) The Gartner survey was conducted between Feb. 12 and March 12, with 1,011 CIOs participating from around the world. The key stats: |
One in four U.S. CIOs indicate that their IT budgets were reduced in the first quarter, 65 percent were unchanged and 10 percent reported budget increases in the first quarter. ... Overall U.S. IT budgets for 2008 are expected to grow, but the growth rate has slowed from 3.1 percent to an increase of 2.3 percent. ... CIOs reported budget changes that are in keeping with a general belt-tightening program rather than a restructuring of the IT budget or spending levels. ... 72 percent of those reported a decline of 10 percent or less.
Gartner's analysts have been arguing that IT has become too important and entrenched in operations to be easily cut, and is more likely to be used to enable savings or cuts in other departments. These results validate this point of view, according to Mark McDonald, head of research for Gartner Executive Programs. From the press release ...
"Overall, the majority of CIOs reported no change in their 2008 committed budgets. This indicates that IT budgets are not the 'target rich' environment for cost cutting they have been in the past. However, there is some softness, particularly in the U.S. ... CIOs responding to the study report that IT budgets are still growing, even in the U.S., but growth rates are muted slightly. Historically, the revised numbers are in keeping with the past four years where IT budget increases have averaged 2.4 percent."
IT spending remains stronger outside the U.S. IT budgets in Europe are up 3.86 percent and up 5.98 percent in the Asia/Pacific region. The most worrisome note in the report: A mere 32 percent reported having contingency plans for cost cutting, should that be needed.
This is good news - at least for 75 percent of companies - but remember, we've got a long way to go before we're out of this economic mess. This proof won't be in this pudding for at least a year or more.
For more on IT spending, see Ziff Davis Enterprise's IT Spending survey, which came out in February. And you can read our interview with Mark McDonald here.
