Gartner: IT departments forced back to 2005 budgets

Businesses are imposing 2005-level budgets on their IT departments, in spite of expecting technology to enable major business change, according to an extensive report.

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Businesses are imposing 2005-level budgets on their IT departments, in spite of expecting technology to enable major business change, according to an extensive report.

This year’s Gartner survey of 1,600 chief information officers named last year the “most challenging” for IT since 1999, before the dot com crash, as chief information officers lost the benefits of four years of fighting for budget growth. It estimated budget growth this year, but not enough to return to the heights before the recession.

The UK has a particularly bleak outlook, according to the 2010 CIO Agenda, as it had a three percent cut in budgets last year, the greatest European decline. This was a heavy drop compared to the continental average fall of 1.9 percent.

Mark McDonald, VP at Gartner, said the combination of “multiple budget cuts, delayed spending and increased demand for services with reduced resources” was making work challenging for CIOs. But he predicted 2010 would see the start of businesses moving “from cost-cutting efficiency to value-creating productivity”.

"Transition gives the enterprise and IT the opportunity to reposition themselves and exploit the tough corrective actions taken during the recession," he added.

In CIOs’ favour, some board’s expectations were making the same shift away from pure cost to a focus on better productivity, Gartner said. This could be targeted by technology such as virtualisation, cloud computing and Web 2.0, which usefully often required smaller up-front investments, it said.

Business intelligence remained important among CIOs’ technology priorities, but slipped from being the number one priority for the past five years, to number five. Other favoured technology among CIOs included networking, mobile systems, document management, service oriented architecture and security.

CIOs’ business priorities painted a somewhat different picture, with process improvement topping the list. Other priorities included reducing operational costs, improving analytics, improving staff effectiveness, managing change and exploring new markets.

Additional reporting by Channelworld staff

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