Gartner First Quarter Worldwide CIO Survey Shows IT Budget Growth Remains Broadly Stable, but One in Five CIOs Experience IT Budget Cuts
Global CIO Study on Latest IT Spending Trends to be Examined During Gartner Symposium/ITxpo: Emerging Trends, April 6-10, in Las Vegas
While 62 per cent of CIOs reported no change in their 2008 IT budgets, 23 per cent indicated a decline in their budgets, and 15 per cent of respondents reported an increase in their budgets. Of those respondents reporting a decline in budget, the decrease averaged at 10 per cent in their committed 2008 budget. For those respondents that reported an increase in their budget, they said the increase was approximately 15 per cent.
The study conduced from February 12, 2008 to March 12, 2008, sought to gauge the potential impact of macroeconomic concerns on IT budgets. Respondents were asked since they finalized their 2008 IT budget, has that budget changed. The results of this survey were compared with the results of Gartner Executive Programs 2008 CIO survey conducted from September to December, 2007, which had 1,500 responses.
"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 US," said Mark McDonald, group vice president and head of research for Gartner Executive Programs. "CIOs responding to the study report that IT budgets are still growing, even in the US, 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 per cent."
US IT budget growth rates are softening. Overall US IT budgets for 2008 are expected to grow, but the growth rate has slowed from 3.1 per cent to an increase of 2.3 per cent. One in four US CIOs indicate that their IT budgets were reduced in the first quarter, 65 per cent were unchanged and 10 per cent reported budget increases in the first quarter.
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. Almost two-thirds, 72 per cent of those reported a decline of 10 per cent or less. "We are seeing caution rather wholesale cutting," Mr. McDonald said. "This is due to CIOs increasing diligence in managing IT spending over the past few years."
Geographically, IT budgets continue to exhibit growth with budget growth increasing in Europe (+3.86 per cent) and Asia/Pacific (+5.98 per cent). The strength of European and Asian CIOs in their economies is reflected anecdotally in their response to this study. On several occasions, CIOs in these geographies commented that they saw the current belt tightening as a US only phenomenon indicating a level of independence from conditions in the US
"The first quarter should be the toughest in terms of budget changes as executives are cautious at the start of the year. CIOs are managing their budgets differently than in the past, on a greater business basis and that is showing up in the results of this first quarter study," Mr. McDonald said.
CIOs were asked about their contingency plans. Only one-third (32 per cent) reported having contingency plans for 2008. "Given economic conditions, CIOs should be prepared and have a contingency plan for both increases or decreases in the next 90 days (by the end of the second quarter of 2008)," Mr. McDonald said.
Gartner analysts will provide additional analysis on the future of IT at the upcoming Gartner Symposium/ITxpo 2008: Emerging Trends, April 6-10 at Mandalay Bay Resort and Casino in Las Vegas. Gartner Symposium/ITxpo: Emerging Trends is Gartner s premier event focused on the emerging trends, technologies, business models and new management thinking poised to have a dramatic impact on business, the economy and society. Thousands of IT professionals from the world s leading enterprises rely on Gartner s Symposium/ITxpo: Emerging Trends event to gain insight into how their organizations can use technology to address business challenges and improve operational efficiency. For more information, please visit www.gartner.com/.... Members of the media can register by contacting GartnerEvents@text100.com
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