Benchmark your IT MOOSE budget, not your total IT budget

IT budget benchmarks continue to be a hot topic for CIOs, especially in the wake of a recession that has caused companies to cut IT budgets to the bone.

To help CIOs defend their budget levels, determine whether more cuts are in order, and build the case for increased IT spending, Forrester provides annual IT budget benchmarks, based on data from our global IT budget and spending surveys.

Our most recent survey provides a preliminary look at the 2010 IT budget benchmarks based on responses from 1,000 IT executives and technology decision-makers from SMB and enterprise companies globally. The results indicate continued budget restraint among CIOs, with more than 60 per cent of respondents reporting that their capital, as well as their total IT spending, would be less or the same as 2009.

As a result, the majority of IT organisations said that they would focus on reducing the ongoing operations and maintenance budget as a way to both deliver some margin improvement while also enabling some investment for critical needs such as delayed infrastructure refreshes and mandatory initiatives resulting from regulatory requirements.

Forrester calls this part of the IT budget the IT MOOSE budget, with MOOSE being an acronym for IT spending to Maintain and Operate the Organisation, Systems, and Equipment.

Figure: Total IT Spending And IT MOOSE Spending As A Percent Of Revenues By Industry
Base:1,032 IT decision makers. Source: Forrsights Budgets and Prioritiies Tracker Survey

For several years, Forrester has been recommending that companies focus their benchmarking efforts primarily on the IT MOOSE portion of their IT budget, rather than the total IT budget. We have argued that this IT MOOSE budget is a better item to benchmark for three reasons:

MOOSE is more consistent from year to year
It lacks the yearly variation of the new project portfolio, which will rise or fall as strategic business priorities change and as discretionary IT project spending expands or contracts with the economic cycle.

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