According to research conducted in the Computer Economics IT Spending and Staffing Benchmarks study there are some new and surprising trends in IT management as the US moves out of it's recessionary economy. The goal of the study is to provide key metrics to assist organizations in the financial and strategic management of information technology.
The study was conducted as an in-depth survey of IT executives in the U.S. and Canada to gather detailed metrics concerning their IT spending and staffing levels, use of outsourcing, and adoption of IT management best practices. The respondents include executives in the public and private sectors. The study is based on a survey of more than 200 IT executives conducted in the first quarter of 2011.
The study provides composite statistics of IT spending and staffing data, a segmentation of the same statistics by organization size, and individual chapters for 19 commercial and government sectors and subsectors.
Here are some of the highlights of the survey:
1: IT Operational Spending Moves Out of Recession, But Recovery Is Weak
Research shows since 1990 shows that during recessions, fewer than 50% of IT organizations increase their IT operational budgets. This was the case during the recession in 2009, and it continued into 2010. This year, the IT spending recession has largely passed, with 60% of IT organizations now increasing their IT operational budgets.
2: Nearly One-Quarter of IT Executives Expect Operational Spending Cuts
Through their lack of confidence in their spending plans, IT executives confirm the IT spending recovery is weak. When asked about their expectations for change in IT operational spending, nearly one-quarter expect budget cuts in the year ahead compared to only 16% who expect a green light to exceed their spending plans.
3: Half of IT Executives Believe Budgets Are Inadequate
While the trend in IT spending—as outlined in the first two findings—is important, it is also important to evaluate whether the current level of spending is adequate. Half of IT executives feel their IT budgets are adequate (49%) or more than adequate (1%) to meet the needs of their businesses.
4: IT Budgets Not Keeping Pace with Corporate Revenue
Despite the modest 2% increase in median IT operational spending this year, IT operational spending as a percentage of revenue declined. IT operational budgets fell to 1.6% of revenue from 1.8% last year. This indicates while corporate revenue has generally been increasing, top management has not been granting commensurate increases in IT spending. Organizations are restraining IT spending, especially in the area of hiring.
5: IT Operational Spending per User Lowest in Six Years
A second important measure of IT spending is IT operational spending per user. This metric is not as popular as IT spending as a percentage of revenue. Nevertheless, it is perhaps more useful as it normalizes IT spending in relationship to the number of users. IT spending per user and the number of users in an organization should move in parallel when there is no change in spending levels.
These findings were taken from the Executive summary of the published research, for the complete results and the full publication see www.computereconomics.com .
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