CIOs' IT budgets even smaller than planned

Almost half of chief information officers worldwide spent less on IT in the first quarter than they had planned, according to a Gartner survey.

In the Gartner report, released on Monday, 46 per cent of CIOs said their 2009 IT budget had changed since it was finalised. In that group, more than 90 per cent had made an average reduction of 7.2 per cent in the first quarter.

"CIOs reported that renegotiating vendor contracts and headcount reductions were the primary focus areas for accommodating budget reductions," Gartner group VP Mark McDonald said in a statement. "CIOs report shifting more work to in-house resources and delaying capital expenditures, more than reducing IT project investments."

Gartner surveyed CIOs from September to December last year about their spending intentions for the first quarter of 2009, and generally found predictions of mainly flat IT spending, with a minor increase of 0.16 per cent.

The new survey, conducted over March and April this year, found budgets had declined by a weighted average of 4.7 per cent as a result of wider economic woes.

Last year's survey had more than 1,500 responses, while the new research covered around 900 CIOs. Fifty-four per cent of respondents to the latest survey reported no change in their IT budget, and four per cent reported an increase.

The professional services, telecommunications and high-tech industries saw the biggest cuts in tech spending, at 10 per cent. IT budgets in the manufacturing industry fell by around eight per cent, and the utilities and financial services industries saw drops of around four per cent.

Most CIOs say further cuts this year are unlikely, Gartner reported. Respondents said they were hoping for an economic recovery between the first and third quarters of 2010. If and when this happens, they expect IT investment projects and workforce increases to be their first investments.

Original article: Gartner: IT budgets squeezed further from ZDNet UK