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42 percent of CIOs decreased Q1 IT budgets

Monday, June 08, 2009

In the first quarter of 2009, CIOs experienced significant IT budget revisions as executives gained a greater understanding and solidified plans for addressing the global financial crisis, according to a worldwide survey of 900 CIOs by Gartner Executive Programs (EXP).

The survey was conducted from March 1 to April 30 2009 and sought to gauge the potential impact of the global economic turbulence on IT budgets. These CIOs encompass more than US$77 billion in revised IT spending. Forty six percent of respondents said that their 2009 IT budget had changed since it was finalised.

The results of this survey were compared with the results of the Gartner EXP 2009 CIO Survey, conducted from September to December 2008, which had more than 1,500 responses.

CIOs in the original survey reported a flat budget with a minor increase of 0.16 percent. CIOs responding to the survey in the first quarter now report a weighted average decline of 4.7 percent. More than 90 percent of firms changing their budgets made a reduction in the first quarter, with the average reduction being 7.2 percent. Fifty-four percent of respondents reported no change in their IT budget, with the remaining 4 percent reporting an increase in their IT budget.

Mark McDonald, group Vice President and Head of Research for Gartner EXP, commented, “CIOs reported that renegotiating vendor contracts and head count reductions were the primary focus areas for accommodating budget reductions. 

The survey found that CIOs expect the economy to recover between the first and third quarter of 2010. CIOs plan to increase IT investment projects and workforce levels as their first investments in such a recovery. Software, hardware and infrastructure investments are also high on the CIO’s agenda on the path to economic recovery.

“Executives making plans in the fourth quarter of 2008 faced an uncertain future as the global financial crisis unfolded,” Mr. McDonald said. “Based on CIO contingency plans, they are now better prepared for future economic challenges.”

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