by Carolyn Johnson

Survey Indicates Technology Budgets on the Mend

May 14, 2010
BudgetingTechnology Industry

CIO magazine's quarterly survey shows a brighter outlook for IT departments, but large companies are faring the best.

It’s been four months since CIO reported on its last survey about IT and the economy, and now nearly half of CIOs surveyed (48 percent) say their overall budget will increase in the coming year. That’s up from the 40 percent reported in February and only 14 percent nearly a year ago. Spending plans remain focused on applications (50 percent) and web or mobile investments (40 percent). But 53 percent of IT leaders expect the percent of their total IT budget allocated to new projects to increase, up from 43 percent last quarter and 23 percent in mid-2009.


CIOs IT Economic Impact Survey results

Registration is required to download the full survey results. IT staffs will be happy to know that more CIOs also plan to ease up on many of the restrictions imposed during less-favorable economic times. Fifty-six percent will increase IT capital spending and 44 percent said they expect to increase IT salaries in the next year. Meanwhile, 48 percent plan discretionary IT project spending increases, up from 36 percent at the end of last year.

Large Companies: Stable or Growing

Despite the encouraging data, roughly one third of CIOs surveyed are still feeling the effects of the recession (36 percent), particularly those at small and midsize companies. Nearly half of large-company CIOs (47 percent) say their organizations are growing while 32 percent of midsize companies and 45 percent of small companies report they’re still battling the poor economy.

Poor economic conditions may be speeding up the use of alternative IT models such as cloud, on-demand services and software as a service for 39 percent of all IT leaders and nearly half of those from large companies. Hiring and outsourcing remains relatively flat. While 38 percent report they plan to increase IT headcount in the next year (up from 30 percent in the winter) and 66 percent say they have no plans for further layoffs, 62 percent say they have no plans to hire. The majority of respondents say that their spending on contractors, outsourcing and offshoring will remain the same.