Study: Web Services Lead Growing IT Investment

A SIM survey of senior IT execs reflects changing priorities and upbeat trends in spending and salaries.

DALLAS—Web services have come out of nowhere to emerge as the top technology for 2006, according to a survey of senior IT execs.

In a poll of 139 members of the Society of Information Management conducted in May 2006, the respondents placed Web services at the top of their technology to-do lists. Web services were not among the top six technologies in the previous years survey.

The results of the survey, revealed at SIMs annual SIMposium conference here, also showed increases in IT budgets and salaries, reflecting a continuing bullishness for IT in general and a reversal of the bearishness surrounding IT from 2001 to 2004.

"The tide has turned; the economy is great; were hiring and paying more to ourselves and our staffs," Luftman said in a presentation to the SIM members. Luftman said the survey sample represented a cross-section of SIM members in a variety of different businesses and from companies large and small.

Security, which had been at the top of the list for two years, dropped to third place, said the studys author, Jerry Luftman, professor and associate dean of graduate IS programs for the Stevens Institute of Technology, in Hoboken, N.J., and SIM vice president of Academic Community Affairs.

Luftman said the lessening in interest in security probably reflects the progress that IT pros believe they have made in the past several years to make their IT systems less vulnerable to attack.

Business intelligence was in second place behind Web services, followed by security, business process management, customer portals and systems integration. Luftman said the emphasis on Web services is tied to an increased emphasis on virtualization and SOA (service-oriented architecture). He said its likely that members will make greater use of thin clients and servers such as mainframes sporting virtualization technologies.

The tone of the survey was upbeat overall. "Projections for 2007 are extremely positive," Luftman said in an interview. He noted that budgets have in general either stayed the same or increased. "Thats good news. Next year, 84.6 percent [are] expecting their budgets to be greater than or equal to this years," he said.

/zimages/6/28571.gifCIOs say 2007 looks like a good year for IT. Click here to read more.

Among the favorable findings, 11.1 percent of respondents said they are allocating 10 percent or more of their corporate budgets to IT; last year only 6 percent of respondents could make that claim. Meanwhile, 70 percent said their IT staff headcount will stay the same or increase. There was more good news: 64 percent said they had less than 5 percent staff turnover. "Thats much better than a few years ago, with the turnover rate was around 20 percent," Luftman said. "Theres more hiring and a high level of retention."

In other findings, the top concern of SIM members was alignment of IT with business strategy. No. 2 was attracting and retaining IT professionals—both ranked No. 1 and No. 2 in last years survey. Luftman noted that attracting and retaining IT staff was not on the list of top 10 concerns three years ago—reflecting a continuing resurgence in hiring. Meanwhile, complexity reduction and business process re-engineering were off the top 10 list of concerns completely, he pointed out.

/zimages/6/28571.gifBad boss? Fix your bosss failures with a gift of the fun book that teaches needed skills: "Management by Baseball, The Book Tom Peters Wished Hed Written." Click here.

Luftman said he does not believe that budgeting for rollouts of Microsofts Vista release of Windows, due in 2007, is reflected in the budget figures for next year. "What is the business case for Vista? Software as a percentage of IT budgets is flat," he said. Meanwhile, budgets for hardware and networking are on the rise for 2007, he noted.

The survey found offshore outsourcing currently takes up 4.2 percent of IT budgets, up from 3.1 percent last year. That number will increase to 4.8 percent next year. Luftman said the survey revealed that some companies had tried offshore outsourcing unsuccessfully and had cut back offshore expenses to zero, while others had increased offshore budgets dramatically. Most respondents dont practice offshore outsourcing at all, Luftman said.

/zimages/6/28571.gifCheck out eWEEK.coms for the latest news, reviews and analysis on IT management from