Analyst Puts Brave Face On 2010 IT Spending

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Over half of companies say IT budgets will remain flat or even decline in 2010, but Gartner is still optimistic about the potential of technology to ease the recession

Despite its research revealing that 45 percent of companies plan to keep IT budgets static and 13 percent intend to cut investment in technology, analyst Gartner says that chief information officers are still well placed to help their businesses recover from the recession.

In a report released this week, Early Findings From the 2010 Gartner CEO and Business Executive Survey, the analyst group revealed statistics which it claims paint an optimistic picture for the role of IT departments in 2010. According to Gartner, 62 percent of chief executive officers see IT as key to their “post-recession strategy” and only 13 percent disagree with that view.

“These preliminary results will help CIOs and their teams with the planning and budgeting work they are doing in the next few months,” said Mark Raskino, research vice president and Gartner fellow. “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.”

According to Raskino, it is critical that CIOs stay engaged with upper management as the economies begins to recover in 2010. “CIOs are in a good position to have that conversion right now. They should also take advantage of business leaders’ relatively positive attitude towards IT investment during budget negotiations,” he said.

But while Gartner’s research reveals some positives, the analyst also revealed that while 43 percent of respondents will increase IT investment in 2010, 45 percent will keep the same IT investment level, and 13 percent of business leaders plan to decrease IT investment level. Despite these findings, the analyst company still believes that 2010 will be a relatively good year for IT spending. “These findings reinforce Gartner’s IT spending forecast of 3.3 percent growth in 2010,” said Raskino. “With this warm attitude to IT, CIOs should stand their ground if peers attempt to gain investment share at IT’s expense.”

But although the analyst appears to be looking for the best scenario in its data, Gartner goes on to admit that the recovery will not be a spring-back to pre-recession levels of activity. Approximately 51 percent of those businesses surveyed admitted that they expected to see core production and services remain static or even decrease during 2010.

“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.

Late last month, the European Union announced the finalisation of a project designed to use supercomputing technology to create advanced financial models to help predict and prevent future financial crises. The EURACE project has been in development for three years and is based on agent technology – one of the applications of which is computer generated effects in the film industry – known as Flexible Large-scale Agent Modelling Environment (FLAME).


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