Funding for IT budgets-including allocations for salary increases-will go up next year, but cost cutting is still a major concern. Business intelligence-despite its expense and effort-continues to be a No. 1 technology investment priority in 2010.
workers, listen up: Management is budgeting for raises next year.
These raises, however, come with an expectation
for technology to be a strategic cost-cutting and simultaneous
revenue-producing investment. Business intelligence-despite its expense and
effort-continues to be the No. 1 technology investment of 2010.
In exact terms, 61 percent of executives are
planning to give technology worker salaries a boost in 2011. Only a third of
employers will be keeping salaries flat. The silver lining is less than 10
percent will be chopping salaries next year, according to annual data compiled
by SIM (Society for Information Management), which surveyed more than 172
Of most concern to executives such as CIOs and senior
IT managers is business productivity coupled with cost reduction. Other major
concerns include speed to market, business agility, business and IT alignment
and the reliability and efficiency of IT practices.
"The No. 1 response is getting more revenue
from IT investments as in leveraging IT to reduce business costs," said Jerry
Luftman, professor of information systems at Stevens Institute of Technology, in
an interview with eWEEK. "It is also clear that the trend for offshore
outsourcing is expected to continue to rise."
Luftman is a former SIM executive vice president who will
be presenting the survey results to SIM attendees Oct. 3 at
its annual conference in Atlanta. Luftman has been
producing the research for this report for the last 10 years.
For IT budgets, 38 percent of executives are
increasing them next year, 27 percent are decreasing them and 35 percent are
keeping them flat. Compared to last year, there is an 11 percent increase in
budget spending-a good sign for projects and resources that have been on hold
Many executives are looking for IT to lead the way
in business process re-engineering, in strategic planning and keeping data and
intellectual property secure. Making the list of concerns for the first time,
however, was globalization.
The No. 1 technology investment for these
172 organizations is BI (business intelligence). According to Luftman, BI has
been the top technology investment for the last three years despite a recession
and challenges for many with effective BI implementation. Given the emphasis on
cost reduction, how is it that business intelligence ranks above
virtualization, ERP (Enterprise Resource Planning), continuity
planning/disaster recovery and cloud computing?
"I am surprised too that it remains so high other
than they recognize its importance but are still struggling to implement it," Luftman said.
Cloud computing made the top five technology
investments for the first time in this year's SIM report, further
confirming its ascendancy as companies look to reduce costs in areas across the
landscape of cloud-based services. Another trend that continues to be taken
advantage of is offshore outsourcing, which will see an increase of 2 percent,
from 5 percent in 2010 to 7 percent in 2011 IT budgets, according to the SIM report.
IT turnover rates were low in 2010, according to
the study. Seventy-one percent of SIM survey participants saw
less than 5 percent of IT workers leave their company. Nearly 16 percent saw 6
to 10 percent turnover. The average rate of turnover was about 5.5 percent for
2010; last year, that rate was 6.9 percent.
"The insights from the study confirm that the
economic downturn is continuing to cause a significant shift in IT priorities,"
said Luftman in a SIM statement. "It is
essential to recognize how organizations are leveraging IT during this
prolonged economic conundrum, as well as preparing for when the economy will
Another thing Luftman noted is that as the economy
improves, many people are expected to hit the retirement ranks, though he expects
see a larger hiring pool next year.