Wednesday, July 22, 2009

Analysts cut down IT Budgets, but any more will not be

As has shown new interrogation Gartner, in 1st quarter of this year IT Directors had to reconsider the budgets as business formed the approach to overcoming of world financial crisis. In interrogation which passed from March, 1st till April, 30th, participated nearby 900 CIO from the different countries of the world. According to respondents, as a whole on their IT Budgets it was necessary over $77 billion 46 % of IT Directors have noticed that in the beginning of year their budgets for 2009 have been changed: in 42 % of cases are reduced, in 4 % - are increased.

54 % of respondents have declared that their IT Budget has not undergone changes. Thus over 90 % of the companies which have reduced the IT Budget in 1st quarter of this year, cut down it on the average on 7,2 % from originally planned level. To judge scale of changes, in Gartner result results of similar interrogation in which from September till December of last year have taken part over 1,5 thousand CIO. Then they expected that IT Budgets of their companies for 2009 Remain at level of 2008 or will very little increase – by 0,16 %.

Now it is informed on decrease in IT Expenses on 4,7 % (in comparison with the budget confirmed in the end of the year) on the average on all sample of the interrogated. Thw world: influence of crisis on the company IT Budget. A source: Gartner, 2009 By words. Mark McDonald. (Mark McDonald), vice-president Gartner, CIO the IT Budgets, basically, at the expense of revision of cost of IT Contracts, and also personnel reduction cut down. Besides, they tried not to reduce, first of all, the investment into IT Projects, and to shift the work most part on shoulders of regular IT Experts and to postpone planned earlier capital expenses.

On increase in the IT Budget at 2009 – on the average on 2,2 % - have informed only IT direktory from public health services sector.

In all other vertical markets, on the contrary, in 1st quarter IT Budgets have been reduced.

Have been most strongly mentioned sector of professional services (-10 %), a TV set and IT (also-10 %), the industry (-8 %), housing and communal services (-4 %) and financial services (-4 %). The majority of IT Directors realise threat of the further reduction of IT Budgets this year, but consider such probability low. At the same time, quantity CIO, having the developed plan for a case of unforeseen circumstances, has grown twice in comparison with 2008 Such plans provide both reduction, and possible increase in IT Expenses. 44 % of IT Directors thus do not believe that they should take advantage of extreme plans, the others assume that such necessity can arise in the nearest half a year.

Russia: influence of crisis on the company IT Budget. A source: CNews Analytics, 2009 Interrogation has shown that IT direktory They expect restoration of economy somewhere in between 1st and 3rd quarter 2010 plan to increase at first signs of this restoration investments in IT and to type new employees. Money on ON, hardware and IT Infrastructure development also will be first of all. The heads of business making plans in 4th quarter 2008 , Have faced the uncertainty caused by begun economic crisis, - McDonald makes comments.

– taking into account the extreme plans developed by IT Directors, they are is better prepared now for the future changes in economy. Nevertheless, majority CIO do not expect a fast embodiment of these plans. It means that the companies do not plan till the end of 2009 of other updatings of IT Budgets, except already made in 1st quarter. As to priorities Russian CIO, that, according to spent CNews Analytics, more than half from them have confirmed IT Budget reduction for 2009 In comparison with 2008 it is curious that in 29 % the companies participating in research it has remained in former volume, and at 10 % even has a little increased.

The last are represented by players who managed to avoid accumulation of the big credit loading.

Now they aspire to strengthen the positions in the market (including meaning expansion and consolidation – at the expense of weak players).

In these companies continue to develop IT Infrastructures counting upon fast growth, and also to introduce necessary for business ON. From those respondents who has fixed IT Budget reduction, approximately at 13 % its volume was cut almost by half. 8 % have declared even more dramatic recession – on 70 %.

14 % interrogated have informed that the indicator has decreased within 25-40 %. Anna Zajtseva. , the analyst of UK Finam Management, confirms that in the Russian companies reduction of expenses on IT in the majority was spent already after acceptance of the initial budget. In many of them as a result there were long-term projects which have already been started, and also the projects directed on maintenance of current requirements of business, - she speaks. - expenses which have been focused on satisfaction of requirements of development of the company in the long term several years, as a rule, are postponed without day. As a matter of fact, now many comanies work with situational IT Budgets – the management is guided by a situation in economy, being ready how quickly to increase an expense on IT, and to go on their further reduction.

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