IT budgets still being cut, say CIOs

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Some 42 per cent of chief information officers (CIOs) said their IT budgets had decreased in the first quarter of 2009, according to Gartner Executive Programs (EXP).

The survey conducted by the analyst firm showed the average decline of the budgets was 4.7 per cent.

Carried out in April and May, the survey found 46 per cent of the respondents said their budgets had been changed since they were finalised, with over 90 per cent of those saying it had been reduced.

Mark McDonald, group vice president and head of research for Gartner EXP, said: “CIOs reported that renegotiating vendor contracts and head count reductions were the primary focus areas for accommodating budget reductions.”

“CIOs report shifting more work to in-house resources and delaying capital expenditures more than reducing IT project investments.”

However, even with the negative results, almost half of the CIOs didn’t believe they would have to go into their contingency plans and most expected the economy to recover in between the first and third quarter in 2010.

McDonald said: “Executives making plans in the fourth quarter of 2008 faced an uncertain future as the global financial crisis unfolded. Based on CIO contingency plans, they are now better prepared for future economic challenges.”

“However, most CIOs do not see immediately implementing those plans. This supports a position that the first quarter budget adjustments reflect firm plans for the remainder of 2009.”

The survey also found that the first thing CIOs want to increase is IT investment projects and staffing followed by software, hardware and infrastructure investments.

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