Only about one in 10 UK firms will see a sharp decline in IT budgets in 2009, despite the gloomy economic outlook, according to Gartner’s annual survey of business priorities and CIO strategies for the year just started.
The analyst firm’s annual CIO Agenda was based on responses from about 1500 CIOs globally, representing more than $135bn (£93bn) in corporate and public-sector IT spending. It found that in the UK only 10 per cent of CIOs will see a budget cut of 10 per cent or more. Total IT budget decline in the UK will be 2.2 per cent, compared to 0.5 per cent across Europe and 0.2 per cent globally. The figures are not adjusted for inflation.
“The general picture is that in the US things will be flat and in the UK budgets will decline but only slightly,” said Dave Aron, a research vice president at Gartner. “But what’s interesting is that only a relatively small number will see a significant decline if you take ‘significant’ to mean 10 per cent.”
Aron said that the plans being hatched for 2009 are very different to those laid in the wake of the dot-com bust in 2001 when many internet startups collapsed and firms had already laid out on projects to combat the Y2K bug and on SAP and other enterprise resource planning suites.
“IT is being seen as already pretty lean and mean and budgets haven’t grown that much in the last five or six years, especially if you factor in inflation. IT is seen as part of the solution rather than part of the problem because it can actually help to generate efficiencies. That’s very different to the situation at the beginning of the decade when things had got so exuberant that firms were still on the rebound in IT for years afterwards. There has been very little exuberant IT spend in the last few years and a lot of organisations have got better at business IT strategy so they’re better aligned.”
Aron said that CIOs planned to continue spending but with certain rearrangements, for example getting rid of “zombie projects”.
“The motto is ‘here’s to less but better stuff’,” he said. “Don’t just make what you’ve got more efficient but be more aggressive about prioritising. There may even be a small spike now as companies spend to generate efficiencies and it is critical not to damage what you’ve already got by under-spending on maintenance and development.”