- Major Studies
(Irvine, CA) After a year of budget cuts, layoffs, and delayed projects, IT executives are looking forward to 2010 as a period of stabilization and rebuilding. According to the Computer Economics fourth-quarter outlook survey, the typical IT organization plans to raise its IT spending on operations by 2.0% in the coming year.
The in-depth survey of 139 US and Canadian IT organizations shows that more than half anticipate increasing IT spending in the year ahead, with the median budget increase projected at 2.0%. The survey indicates budget cutting and layoffs are in the past for most organizations, although hiring and capital spending will continue to be restrained through at least the first half.
As one might expect, the outlook for 2010 appears upbeat only in comparison to an anxiety-filled 2009. The projected 2% rise is operational spending lags behind the 2.5% rise in 2005, during the recovery in IT spending after the previous recession.
“Based on our 20 years of tracking IT budgets, all signs point to a recovery year,” said Frank Scavo, president of Computer Economics, Irvine, Calif. “IT executives are prepared to make mid-year adjustments, up or down, based on the strength of the recovery, but right now we it appears we see a year of stabilization in IT spending and staffing.”
Slightly more than half of IT organizations (52%) expect to increase their IT operational budget in 2010 over 2009 while about one-third (32%) expect no change. Only 16% of all IT organizations plan to make further budget cuts in the year ahead. Furthermore, more than half (52%) of all organizations expect to increase IT operational spending in 2010.
In other positive news, only 7% of IT organizations currently plan to make additional staff cuts in 2010, an indication that the worst is over for IT professionals, while 39% plan to add new positions, restoring some of the staff reductions made over the past two years. While broad, hiring of IT workers is not going to be deep. Year over year, IT staffing levels will be flat at the median and rise 5% at the 75th percentile, the study found.
Additional excerpts of the report, including three graphics, can be found in the Computer Economics Research Byte entitled, Outlook Brightens for 2010 IT Spending.
The full report, Outlook for IT Spending and Staffing in 2010, assesses the spending and staffing actions IT managers are currently taking (both positive and negative), how severely they cut IT spending and staffing over the past year, and what they are including in their budget plans for the year ahead. The full report provides 2010 forecasts for IT operational spending, IT capital spending, and IT hiring, both for the composite sample and by organization size.