IT Operational Budgets at Highest Levels Since 1997

IT operational budgets, as a percentage of company revenues, are at their highest levels since the late 1990s, but that increase comes as large enterprises continue to outsource IT work, according to a recent survey by research firm Computer Economics.

The survey, “IT Spending, Staffing and Technology Trends,” found that median operational budgets across the IT board represented 2 percent of overall company revenues in 2006, up from 1.7 percent in 2005 and 1.9 percent in 2004.

The 2 percent figure is the highest in the survey since 1997, when the IT world was in the middle of the dot-com boom and Y2K spending, said Frank Scavo, the president of Computer Economics, based in Irvine, Calif.

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The survey also found that IT operational budgets grew 4.1 percent in 2006, compared to 2.5 percent growth in 2005, while the expectation for operational growth in 2007 was about a 5 percent increase.

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“It’s a period of organic growth,” Scavo said. “It’s the highest point since 1997, but it’s a more normal growth period for IT and for business.”

The growth, however, comes with a price, as large enterprises continue to outsource large portions of IT work and the market pool of qualified professionals remains tight.

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