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Worldwide IT budgets to fall this year

June 08, 2009 18:54 IST
The global IT spend is expected to decline by 4.7 per cent this year with companies worldwide revising the amount incurred on it amid the ongoing economic slump, Gartner survey said.

According to a survey by IT research firm Gartner, about 46 per cent of the respondents said there was a decline in IT budgets for the year 2009. The average reduction was around 7.2 per cent.

The Chief Information Officer (CIOs) responding to the survey in the first quarter now report a weighted average decline of 4.7 per cent (for the year), Gartner said.

About 54 per cent of the respondents reported no change in their IT budget, while the remaining four per cent said they had increased their IT budget for the year.

Gartner surveyed about 900 CIOs in March and April this year to gauge the potential impact of macroeconomic concerns on IT budgets.

In the first quarter of 2009, the CIOs had experienced significant IT budget revisions as executives gained a greater understanding and solidified plans for addressing the global financial crisis.

"Renegotiating vendor contracts and head count reductions were the primary focus areas for accommodating budget reductions. CIOs said more work would be shifted to in-house resources and delayed capital expenditure more than reducing IT project investments," Gartner EXP Group vice president and Research Head Mark McDonald said.

The survey said that the largest dip in IT budget was in professional services-- telecommunications and technology at 10 per cent, manufacturing at 8 per cent, both utilities and financial services at 4 per cent.

Healthcare-related industries, however, reported an average budget increase of 2.2 per cent. The survey found that CIOs expect the economy to recover between the first and third quarter of 2010.

CIOs plan to increase IT investment projects and workforce levels as their first investments in such a recovery. Software, hardware and infrastructure investments are also high on their agenda, Gartner said.

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