Monday, June 8, 2009

Most companies reduce IT spending:Gartner

More than 90 firms reduced their IT budget during the first quarter of 2009 with a weighted average decline of 4.7 per cent, a worldwide survey consultancy firm Gartner reveals.

Survey across 900 companies, conducted during March and April this year, has revealed that the CIOs encompassing more than USD 77 billion in revised IT spending. 46 per cent of respondents said their 2009 IT budget had changed since it was finalised.

In a previous survey the CIOs reported a flat budget with a minor increase of 0.16 per cent. CIOs responding to the survey in the first quarter now report a weighted average decline of 4.7 per cent.

More than 90 per cent of firms, changing their budgets, made a reduction in the first quarter, with the average reduction being 7.2 per cent. 44 per cent of respondents reported no change in their IT budget, with the remaining 4 per cent reporting an increase in the same.

'' CIOs reported that renegotiating vendor contracts and headcount reductions were the primary focus areas for accommodating budget reductions,'' said Mark McDonald, group vice president and head of research for Gartner EXP.

CIOs report shifting more work to in-house resources and delaying capital expenditures more than reducing IT project investments, he added First quarter 2009 IT budget reductions were reported across the board based on both size and geography of the organisation. CIOs in healthcare-related industries reported an average budget increase of 2.2 per cent, but CIOs in all other major industries reported a decline in the first quarter of 2009.

The largest decline was in professional services at -10 per cent, followed by telecommunications and hi-tech at -10 percent, manufacturing at -8 per cent, utilities at -4 per cent and financial services at -4 per cent.

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