IT departments retrench as recession lingers

IT spending will remain flat this year

Spending by IT professionals will remain static for the rest of the year as they focus on updating, rather than adopting, technologies, according to a survey by Gartner.

The analyst firm said that IT spending will increase by just 1.1 per cent this year as chief information officers (CIOs) look to do more with less.

"Economic conditions are changing CIO spending priorities as the need to upgrade infrastructure is being appropriated from reduced operating budgets," said Mark McDonald, group vice president and head of research at Gartner Executive Programs.

This means that IT teams are shuffling the budget around and increasing the focus on money-saving technologies.

"CIOs felt they could no longer delay infrastructure upgrades and other capital investments, and they funded them at the expense of operating budgets," said McDonald.

"The larger the organisation the tighter it is managing its IT budget in general, and IT operating expense in particular.

"This continues a trend we have observed since 2008 as larger IT organisations started reducing their resource requirements through consolidation, waste elimination and other measures. CIOs at the largest organisations indicate that opportunities in these areas remain."

Gartner also found that 60 per cent of respondents expect to see continued economic challenges, and are turning to third-party providers and managed services companies to cut costs. Some 53 per cent of European organisations plan to increase their use of outsourcing in line with efforts to cut costs.

"European organisations expect providers to deliver further cost reductions, " said Claudio Da Rold, a vice president and distinguished analyst at Gartner.

"Although 40 per cent of respondents will increase the external share of their budget, only 24 per cent will increase the budget for providers, and almost a quarter still expect that their IT services budget will continue to decrease in 2010."