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By Michael Eggebrecht
While one-third of enterprises expect their IT budgets to rise this year, 42 percent don’t expect to see any growth, according to a new survey from research firm Ovum.
The CIOs surveyed by Ovum were not enthusiastic about their short-term prospects, and those who do expect healthier budgets only foresee a 1 percent to 5 percent increase.
“The survey data, while promising, does not translate into an IT spending recovery,” said Rhonda Ascierto, senior analyst at Ovum, a unit of business data provider Datamonitor Group. “Realistically, the numbers more likely reflect the effect of previously deep budget cuts during 2008 and the first half of 2009, which left many IT departments operating at ‘bare-bones’ capacity.”
The proportion of CIOs who expect to see slight decreases or big bumps in their budgets are the same as in last year’s survey, said the research firm. And with so many organizations predicting zero growth, “it shows that many enterprises remain vulnerable and are uncertain about near-term business prospects.”
Ovum also noted that IT decision-makers, who are usually able to predict their IT budgets within 5 percent of actual spending, were not as accurate in 2009. “Clearly, the negative effects of the economic downturn were greater than expected and businesses were not prepared,” said Ascierto. “Many businesses made short-term cost savings by reducing their operational costs.”
“The confidence of CIOs in their ability to predict IT spending with a reasonable level of accuracy has been splintered, if not shattered,” she added.
The kinds of projects likely to get the go-ahead this year are those that require incremental modifications to existing systems in response to business needs, according to Ovum.
In February, Forrester issued a report predicting that software upgrades and ongoing operations will eat up a sizable part of companies’ tech budgets this year. Forrester found that 41 percent of large companies and 21 percent of small and midsized businesses (SMBs) are planning to upgrade their finance and accounting software; 48 percent of enterprises and 19 percent of SMBs expect to upgrade their CRM software; and 52 percent of enterprises and 18 percent of SMBs will upgrade industry-specific software.
According to a survey released late last month by staffing firm Robert Half Technology, 37 percent of CIOs identified software and hardware upgrades as an area they expect to spend money on after putting projects on hold in 2009.
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