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Irvine, Calif.––IT capital budgets are rising 4% at the median this year, providing a strong indication that large enterprises are beginning to invest in upgrades to systems and infrastructure, the annual Computer Economics IT Spending and Staffing Benchmarks study finds.
But the newly released study by the Irvine, Calif.-based IT research firm also cautions that IT job growth remains soft and IT operational spending growth is lackluster across all organizations.
“Until we see more strength among smaller companies, we have to conclude that this year will look much like the last two years: there will be a slow improvement coupled with a lack of sustained hiring,” said Frank Scavo, president of Computer Economics. “We are in the midst of an IT spending recovery, but it will need to become broader and deeper before we see any acceleration.”
On the positive side, Scavo said the study provides evidence that IT organizations are stepping up investments in capital projects. In the survey, IT organizations cited upgrading existing systems, becoming more cost-efficient, and developing new systems as their top three priorities. IT executives are also more confident that they will get to spend all of the money in their budgets this year. Only 20% were anticipating not being able spend all of the money in their plans this year, which is down from 31% last year, when the fiscal cliff and sovereign debt crisis prompted a more dour outlook.
Another positive sign is that large organizations are showing relatively strong improvement in IT operational spending. IT operational budgets are up 4.0% at the median for organizations that have IT operating budgets in excess of $20 million. Large organizations are starting hire IT workers in addition to making capital investments. In contrast, organizations with IT operational budgets of less than $5 million plan to boost IT operational spending by only 1.1% and are showing no growth in headcount.
“Confidence is up. IT capital spending is up. But we would like to see the IT spending recovery become broader and deeper,” Scavo said. “We would like to see smaller companies creating IT jobs.”
The Computer Economics IT Spending and Staffing Benchmarks 2013/2014 study is based on a survey of more than 200 IT executives conducted in the first half of 2013. It provides composite statistics of IT spending and staffing data, a segmentation of the same statistics by organization size, and individual chapters for over 20 sectors and subsectors. Additional findings along with a description of the study’s content, design, demographics, and methodology can be found in the executive summary.
About the Study
The Computer Economics IT Spending and Staffing Benchmarks study, now in its 24th year of publication, provides key metrics to assist organizations in the financial and strategic management of information technology. Each year, we conduct an in-depth survey of IT executives in the U.S. and Canada to gather detailed metrics concerning their IT spending and staffing levels, use of outsourcing, and adoption of IT management best practices.