Gartner: IT budgets in 2010 to be at 2005 levels

Business process improvement to top business priorities during the year

IT budgets will only rise by a weighted global average of 1.3 percent in nominal terms in 2010, compared with 2009 levels where IT budgets declined 8.1 percent, said Gartner following the release of results from the 2010 CIO survey by Gartner Executive Programs (EXP).

2009 was the most challenging year for IT since the survey began in 1999, and CIOs had faced multiple budget cuts wiping away four years of budget increases, giving CIOs basically the same level of resources as they had in 2005, said the analyst firm. While there are some signs of recovery in the 2010 projections, these will not overcome last year's cuts, Gartner added.

The worldwide CIO survey was conducted by Gartner EXP from September to December 2009 and represents CIO budget plans reported at that time, said the research house, adding that the survey includes responses from 1,586 CIOs representing more than $126 billion in corporate and public-sector IT spending across 41 countries and 27 industries.

"2009 was the most challenging year for CIOs in the corporate and public sectors as they faced multiple budget cuts, delayed spending and increased demand for services with reduced resources," said Mark McDonald, group vice president and head of research for Gartner EXP. "This is set to change in 2010, as the economy transitions from recession to recovery and enterprises transition their strategies from cost-cutting efficiency to value-creating productivity."

McDonald said that while technologies are transitioning from "heavy" owner-operated solutions to "lighter-weight" services, CIOs are, in turn, transitioning IT beyond merely managing resources to taking responsibility for managing results.

"Transition gives the enterprise and IT the opportunity to reposition themselves and exploit the tough corrective actions taken during the recession," he said. "CIOs see 2010 as an opportunity to accelerate IT's transition from a support function to strategic contributor focused on innovation and competitive advantage. They have aspired to this shift for years, but economic, strategic and technological changes have only recently made it feasible."

Gartner EXP's CIO survey findings show that, in the near term, business expectations and CIO strategies appear stable, with a continued focus on business process improvement, cost reduction and analytics.

According to Gartner, the top 10 business priorities in the order of their ranks are:

* business process improvement;

* reducing enterprise costs;

* increasing the use of information/analytics;

* improving enterprise workforce effectiveness;

* attracting and retaining new customers;

* managing change initiatives;

* creating new products or services (innovation);

* targeting customers and markets more effectively;

* consolidating business operations; and

* expanding current customer relationships.

Top 10 technology priorities in the order of their ranks are:

* virtualization;

* cloud computing;

* Web 2.0;

* networking, voice and data communications;

* business intelligence;

* mobile technologies;

* data/document management and storage;

* service-oriented applications and architecture;

* security technologies; and

* IT management.

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