Gartner Survey of 900 CIOs Shows 42 Percent of Respondents Decreased Their IT Budgets in First Quarter of 2009
June 08 2009 - 8:00AM
Business Wire
In the first quarter of 2009, CIOs experienced significant IT
budget revisions as executives gained a greater understanding and
solidified plans for addressing the global financial crisis,
according to a worldwide survey of 900 CIOs by Gartner Executive
Programs (EXP).
The survey was conducted from March 1 to April 30 2009 and
sought to gauge the potential impact of macroeconomic concerns on
IT budgets. These CIOs encompass more than $77 billion in revised
IT spending. Forty-six percent of respondents said that their 2009
IT budget had changed since it was finalized. The results of this
survey were compared with the results of the Gartner EXP 2009 CIO
Survey, conducted from September to December 2008, which had more
than 1,500 responses.
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.
�CIOs reported that renegotiating vendor contracts and head
count reductions were the primary focus areas for accommodating
budget reductions,� said Mark McDonald, group vice president and
head of research for Gartner EXP. �CIOs report shifting more work
to in-house resources and delaying capital expenditures more than
reducing IT project investments.�
First quarter 2009 IT budget reductions were reported across the
board based on both size and geography of the organization. CIOs in
healthcare-related industries reported an average budget increase
of 2.2 percent, but CIOs in all other major industries reported a
decline in the first quarter of 2009. The largest decline was in
professional services at -10 percent, followed by
telecommunications and high tech at -10 percent, manufacturing at
-8 percent, utilities at -4 percent and financial services at -4
percent.
CIOs recognize the potential for further cuts in 2009, but most
see that as unlikely. The percentage of CIOs with a contingency
plan for the remainder of 2009 has more than doubled compared with
2008. CIOs with additional contingency plans for 2009 are planning
for the potential of renewed IT spending, as well as additional
reductions. While 44 percent of CIOs do not believe they will need
to tap into their contingency plans, those that do believe they
will do so during the next six months.
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.
�Executives making plans in the fourth quarter of 2008 faced an
uncertain future as the global financial crisis unfolded,� Mr.
McDonald said. �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.�
About Gartner EXP
Gartner Executive Programs (EXP) is a membership-based
organization of more than 3,600 CIOs worldwide. Members benefit
from the convenience of a single source of knowledge, one-to-one
counsel, personalized service, the shared knowledge of the world's
largest community of CIOs, and the assurance of Gartner objectivity
and insight. Additional information about Gartner EXP can be found
on the Gartner Web site at www.gartner.com/exp.
About Gartner
Gartner, Inc. (NYSE: IT) is the world's leading information
technology research and advisory company. Gartner delivers the
technology-related insight necessary for its clients to make the
right decisions, every day. From CIOs and senior IT leaders in
corporations and government agencies, to business leaders in
high-tech and telecom enterprises and professional services firms,
to technology investors, Gartner is the indispensable partner to
60,000 clients in 10,000 distinct organizations. Through the
resources of Gartner Research, Gartner Executive Programs, Gartner
Consulting and Gartner Events, Gartner works with every client to
research, analyze and interpret the business of IT within the
context of their individual role. Founded in 1979, Gartner is
headquartered in Stamford, Connecticut, U.S.A., and has 4,000
associates, including 1,200 research analysts and consultants in 80
countries. For more information, visit www.gartner.com.
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