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By Mark Henricks
Gobal information technology budgets remain stuck at a 1.1
percent growth rate, according to Gartner's 2010 Mid Year CIO Survey, but the overall number conceals variations in how CIOs are
treating capital and operations expenses, and results also vary by industry.
The survey of more than 500 CIOs around the world appeared
to show little difference from a poll at the end of 2009, which forecast a 1.3
percent growth in IT budgets. At the same time, they confirm that 2010 will
represent a significant rebound from 2009, when global IT budgets shrank 8.1
percent, according to Gartner.
Equally interesting was the way in which CIOs said they were
attempting to balance their IT budgets by increasing capital expenditures while
reducing operational outlays. The survey found that CIOs on average were
boosting capital spending by 3 percent while cutting operating budgets by 1
percent.
Mark McDonald, group vice president and head of research at
Gartner Executive Programs, said
that this result showed that CIOs had decided they could no longer put off
critical investments in equipment and infrastructure, and were essentially
robbing operating budgets to beef up capital outlays. McDonald warned that this
could mean even the modest increase in IT budgets could be short-lived, as CIOs
ran out of resources to fund continuing purchases.
Other details of the survey included that small firms
anticipated larger percentage increases than large ones. Companies with IT
budgets below $50 million averaged 20 percent increases. McDonald noted that
the counterbalancing trend of big-company reductions in budgets has been going
on since 2008 and shows no signs of ending.
Results also varied according to the industries in which
firms operated. Fields that had seen the biggest decreases in IT spending over
the last couple of years were now leading the way, McDonald said. These include
retail, financial services and manufacturing. Other relatively strong IT niches
included healthcare and utilities. Government and education, meanwhile, were
spending less.
One additional item of note concerns some changes in the
budgeting process. Gartner noted that most companies have traditionally set
annual IT budgets during the fourth quarter. Just under half (49 percent) of
CIOs said they did that last year as well. However, more than a quarter (26
percent) of firms only completed the IT budgeting process in the first quarter
of this year. More than one in 10 (11 percent) said they have yet to finalize
their IT budgets. According to Gartner, “This indicates that IT spending is
expected to be more fluid and respond to changing business conditions.”
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