CIOs See Declining IT Budgets in Q1
About a fourth of CIOs in the United States reported decreases in their budgets in the first quarter of this year, according to a survey released by Gartner this month.
- By David Nagel
- April 11, 2008
Although overall IT budgets are expected to grow in 2008, about a fourth of
CIOs in the United States reported decreases in their budgets in the first quarter
of this year, according to a survey released by Gartner this month and highlighted
at this week's Gartner
Symposium/ITxpo: Emerging Trends
event in Las Vegas.
Budgets Remain 'Broadly Stable'
Only 10 percent of U.S. respondents in Gartner's "First Quarter Worldwide
CIO Survey" indicated that their budgets had increased in the first quarter,
with the bulk -- 65 percent -- saying their budgets remained the same. For the
25 percent whose budgets were cut, most (72 percent) reported decreases of 10
percent or less.
Budget growth on the whole in IT is slowing -- from 3.1 percent to 2.3 percent
-- when compared with a previous Gartner survey conducted in the fourth quarter
"We are seeing caution rather [than] wholesale cutting," said Mark
McDonald, group vice president and head of research for Gartner Executive Programs,
in a statement released in conjunction with the findings. "This is due
to CIOs' increasing diligence in managing IT spending over the past few years."
He continued: "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."
It's a similar picture worldwide, where one-fifth of CIOs reported decreasing
budgets. The Asia/Pacific region reported the strongest growth in the quarter:
"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 U.S.," McDonald said. "CIOs responding to the
study report that IT budgets are still growing, even in the U.S., 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 percent."
Furthermore, the report showed, only 32 percent of CIOs surveyed had some sort
of contingency plan in place for 2008 to address budgetary changes.
"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)," McDonald said.
The Gartner survey polled 1,011 CIOs from around the world in February and
March. Further information is available here.
The Green IT Debate
In other ITxpo news, Gartner hosted a debate on the impact of "green"
IT practices Tuesday. Gartner analysts French Caldwell and Charles Smulders
argued that green IT is fiction, with the IT industry churning out "only"
2 percent of the world's carbon output. Analysts Simon Mingay and Martin Reynolds
argued the opposite, saying green is a function of risk management and that
IT departments should "innovate now and not wait."
Attendees at the Green IT Great Debate sided largely with the pro-green position,
with 58 percent saying that green IT does matter and only 20 percent saying
it does not. A larger percentage -- 71 percent of the session attendees -- said
they "believe human activity is driving dangerous climate change."
Further information can be found at the Gartner Symposium/ITxpo blog here.
Dave Nagel is the executive editor for 1105 Media's educational technology online publications and electronic newsletters.