Watch CBSN Live

Gartner's Take On IT Spending -- Companies Scale Back

The other day, I mentioned Forrester's take on enterprise IT spending, at least in terms of software. Gartner has come out with its own study on IT spending, the the results look a bit more sobering.

The first quarter of calendar 2009 saw a significant change in CIO spending outlook. In a survey of 900 CIOs, Gartner found "significant budget revisions" compared to the CIO survey it took from September to December of last year. Forty-six percent had revised their 2009 spending plans.

CIOs in the original survey reported a flat budget with a minor increase of 0.16 percent. CIOs responding to the survey in the first quarter now report a weighted average decline of 4.7 percent. More than 90 percent of firms changing their budgets made a reduction in the first quarter, with the average reduction being 7.2 percent. Fifty-four percent of respondents reported no change in their IT budget, with the remaining 4 percent reporting an increase in their IT budget.
Budget cuts were happening across the board, which actually isn't too surprising given how quickly the economic climate spiraled into the ground. Here are some of the budget adjustments by industry:
First Quarter Budget Adjustments by Industry
Industry % Change
Healthcare +2.2
Professional Services -10
Telecom/High Tech -10
Manufacturing -8
Utilities -4
Financial Services -4
The weighted average decline was 7.2 percent, rather than the flat results expected by the study last year. Major ways of achieving the reductions were in reducing headcount and in renegotiating contracts with vendors. But there's a bit of good news:
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 the CIO's agenda on the path to economic recovery.
Scissors image via stock.xchng user jmjvicente, site standard license.
View CBS News In
CBS News App Open
Chrome Safari Continue