IT Budgeting and Priorities What Your Customers Are Thinking
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The uncertainty in the market may be tough for those in the channel, but if a new survey of CIOs and executive IT leaders conducted by the Society for Information Management (SIM) is to be believed, spending will largely hold steady or even increase in 2010.
Year of Cuts
Unsurprisingly, IT dollars dwindled in 2009. Approximately 52% of respondents reported their IT budgets were down this year. About 25% reported increases, though, and 23% said they held the line.
Stabilization for 2010
Many more expect budget stasis in 2010, with 45% predicting their budgets will remain the same. An optimistic 27% believe their budgets will increase in 2010. And 28% believe their dollars will shrink.
Keeping Things Running
CIOs estimate that in 2010 69% of their allocated funds will be spent on running existing systems, while 31% will be spent on building and buying new systems. These ratios remain largely the same compared to this year.
Outsourcing on the Rise
Service providers can expect to dip into a larger share of IT dollars in 2010. This year most IT departments spent 8% of their budgets on domestic outsourcing and 4% on offshore outsourcing. In 2010 they’re expected to bump up to 9% for domestic and 6% for offshore.
Slight Slide in Consulting
However, these outsourcing dollars may come slightly at the expense of consulting spend, which will drop from an average of 12% of IT budgets in 2009 to 11% of budgets in 2010.
Need to Become More Strategic
The majority of CIOs (58%) reported that the IT budget makes up about 3% or less of all corporate revenue.
Top Spending Priorities
1. Business intelligence2. Server virtualization3. Enterprise Resource Planning (ERP) systems4. Customer and corporate portals5. Enterprise application integration and management6. Continuity planning and disaster management
Top Concerns
The top 10 IT-related priorities that gave CIOs cause for concern are:1. Business productivity and cost reduction2. IT and business alignment3. Business agility and speed to market4. Business process re-engineering5. IT cost reduction6. IT reliability and efficiency7. IT strategic planning8. Revenue generating IT innovations9. Security and privacy10. CIO leadership role