CIOs Face IT Budgets at 2005 Levels, Gartner Says

After seeing their budgets shrink by 8.1 percent during the recession of 2009, CIOs will have their spending remain flat in 2010, staying at 2005 levels, according to the Gartner Executive Programs group. As CIOs look for ways to keep costs down while increasing results, they are turning to approaches such as virtualization, cloud computing and Web 2.0 social media technologies, Gartner says.

After suffering an 8.1 percent decline in their allowed IT spending in 2009, CIOs will see a relatively flat 2010, putting their budgets on par with what they had on hand in 2005, according to research company Gartner.

In a report issued Jan. 19, Gartner's EXP (Executive Programs) group found in a survey of 1,586 CIOs that while there were some signs of economic recovery as 2009 became 2010, those signs weren't enough to make up for the damage wrought by the global recession.

Not surprisingly, the CIOs surveyed told Gartner that in the near term, they were focusing on ways to keep costs down while at the same time trying to improve business processes and take advantage of analytics in hopes of making IT a larger business partner within their organizations.

"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," Mark McDonald, group vice president and head of research for Gartner EXP, said in a statement. "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."

Part of that transition means moving away from big IT solutions that are owner-operated and more toward services, McDonald 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," he said. "They have aspired to this shift for years, but economic, strategic and technological changes have only recently made it feasible."

That's reflected in the top business priorities for 2010, according to Gartner. Topping the list is improving business process, followed by reducing enterprise costs, increasing the use of information and analytics, improving enterprise work force effectiveness, and attracting and retaining new customers.

On the technology side, the top of the list includes virtualization, cloud computing, Web 2.0 social media technologies, networking, voice and data communications, business intelligence, and mobile technologies.

Gartner pointed out that many of the top technology priorities, which also include service-oriented applications and architecture, data management and storage, security, and IT management, can be implemented quickly and without high up-front costs. These solutions can cost thousands to implement, with a payback in the millions, according to Gartner.

"These technologies, implemented properly, create the opportunity for IT to change its role and the operational performance of the enterprise," McDonald said. "Asymmetric technologies like virtualization, cloud and Web 2.0 enable companies to get out from under a front-loaded heavy investment model that limits IT's agility and flexibility."