CIOs unprepared for cuts in IT budgets says Gartner

One quarter of CIOs facing budget cuts but majority don't have contingency plans to manage shortfall

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By  Imthishan Giado Published  April 9, 2008

A new worldwide survey from research company Gartner has revealed that although enterprise IT budget growth remains consistent at 3.3%, 23% of CIOs report a decline in their budget, with the average decrease estimated at 10%. Only one third (32%) had contingency plans in place for 2008.

62% of the CIOs interviewed in the first quarter of 2008 stated that their budgets remained unchanged, while 15% of respondents received an increase in their IT expenditure, with the average increase in the region of 15%.

Mark McDonald, group vice president and head of research for Gartner Executive Programs, commented on the survey results: "Overall, the majority of CIOs reported no change in their 2008 committed budgets. This indicates that IT budgets are not the ‘target rich' environment for cost cutting they have been in the past. CIOs responding to the study report that IT budgets are still growing, even in the US, but growth rates are muted slightly. Historically, the revised numbers are in keeping with the past four years where IT budget increases have averaged 2.4%."

Gartner reported that most of the budget cuts were the result of a general trend towards parsimony, rather than a drastic case of restructuring.

"We are seeing caution rather than wholesale cutting. This is due to CIOs increasing diligence in managing IT spending over the past few years. CIOs are managing their budgets differently than in the past, on a greater business basis and that is showing up in the results of this first quarter study," explained McDonald.

The intent of the survey was to gauge the effect of macroeconomic concerns on IT budgets, and was conducted from 12th February to 12th March, interviewing 1,011 CIOs. The results were cross referenced with Gartner's CIO survey conducted in September 2007, which drew 1,500 responses.

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