CIO Magazine Tech Poll: Budget Forecasts for 2006

 IT budget growth estimates for the coming 12 months perked up slightly in the CIO Magazine Tech this month. After plummeting from to 9.3 percent in September to 5.2 percent in the October poll, CIOs’ budget growth estimates rose to 5.7 percent in November. The latest forecasts, while moving in a positive direction, are more moderate compared to just a few months ago.

Likewise, the Tech Future Growth Index (TFGI), which projects IT activity over the next 12 months, recovered nicely in November, reaching 2.1 after dropping from 3.8 to 1.8 in September and October—its lowest level for the year.

Spending forecasts across eight technology categories also rose this month. When asked about spending plans across technology areas overall, the average number of panelists who plan to increase overall spending in the coming year increased to 39 percent compared to 37 percent in the October poll. Technology areas that experienced the most dramatic recovery included telecom equipment (39 percent versus 28 percent in October), outsourced IT services (31 percent versus 24 percent last month) and data networking equipment (41 percent versus 35 percent in last month’s Poll). While spending on computer hardware held steady at 46 percent, spending intentions for both infrastructure software and ebusiness application software fell by approximately 7 percentage points.

Most IT Departments Maintaining Current Level of Outsourcing

Our Poll this month asked CIOs to comment on the percentage of IT jobs they will outsource in 2006. Of the respondents, roughly half (47%) plan to outsource less than 1 percent of their IT jobs. Only 21percent of panelists will outsource more than 10 percent. Twenty-eight percent will outsource between one and nine percent and 4 percent weren’t sure. IT departments may feel increased pressure as organizations put greater demands on IT for business initiatives. According to recent research by Robert Half Technology, two-thirds (66%) of chief information officers (CIOs) polled report that their IT teams have more on their plates than 12 months ago, while only 4 percent of respondents noted a decline in work levels. Katherine Spencer Lee, executive director of Robert Half Technology suggests that managers regularly review employees’ workloads to ensure that their staff isn’t overwhelmed and to assess what additional resources they need to hire or outsource to support existing staff.

Each month, CIO magazine, in partnership with Deutsche Bank Securities and Ed Yardeni, chief investment strategist, Oak Associates, surveys a panel of senior executives on current and future IT spending as well as other IT issues. In November, 175 executives responded to the survey. Companies with more than 5,000 employees represented 23 percent of the responses.

CIO’s Tech Poll represented a broad range of industries, including finance (14 percent), non-computer/communications manufacturing (10 percent ), health care (10 percent), education (9 percent), technology services (10 percent), and state or local government (9 percent).

The complete October CIO Magazine Tech Poll can be found at:

View the Complete Tech Poll Results

To view previous poll results go to:

View Previous Tech Poll Results

–Lorraine Cosgrove