IT to See Larger Budgets, Play Key Role In 2010: Report

Four in 10 business executives plan to increase spending in IT in the coming year. With a renewed focus on the customer and revenue growth, CEOs and other senior executives plan to give IT the funding for key technology projects and talent retention in 2010.

Business may not grow tremendously in 2010, but executives and business leaders--62 percent of them--expect information technology to play a vital role in business recovery, said a recent Gartner study of 190 respondents. The report, entitled "Early Findings From the 2010 Gartner CEO and Business Executive Survey," found that 42 percent of executives from companies with $1 billion in revenue or more have a renewed focus on revenue growth rather than cost cutting, which dominated most companies in 2009.

Forty-three percent of executives expect to increase IT budgets in 2010, while 45 percent will keep IT at the same levels. Only 13 percent expect to decrease IT spend next year, finds Gartner. The Stamford, Conn.-based research, analyst and consulting firm said that these findings help confirm its forecasts for a 3.3 percent increase in IT spend in 2010.

"With business leaders progressively shifting their time and attention away from the introspection of restructuring and tactical cost cutting, and back towards customer value propositions and servicing during 2010, IT leaders should propose new ways in which technology can be used to support existing and new customers," said Mark Raskino, research vice president at Gartner, in a statement. "They should also discuss talent-management issues and consider special provisions for key talent."

Executives may be more focused on revenue growth, shows the study's findings, but business activity and production levels get a mixed report: 49 percent expect an increase; 31 percent expect things to get worse; and 20 percent expect no change at all.

"This further suggests very few business leaders are anticipating any sort of V-shaped recovery, and business volumes will not recover quickly," said Raskino. "With the expectation of a modest rise in business activity, CIOs should control infrastructure investments accordingly."

Priorities for 2010 show a renewal on "the customer." Keeping loyal customers and growing that loyalty got the highest marks for priorities in 2010 with 85 percent of respondents. Other business priorities include retaining top talent (ranked priority No. 3) and cost cutting which dropped from the No. 1 priority in 2009 down to No. 5.

"These preliminary results will help CIOs and their teams with the planning and budgeting work they are doing in the next few months," said Raskino in the statement. "Business leaders are gasping for growth after a long period holding their breath, and they are expecting to increase the importance of IT in their post-recession approach. It is critical that CIOs review business leaders' rapidly changing tactical business priorities and often unstated new expectations of where IT can help as the economy turns."