Slowdown or No, Businesses Aren’t Cutting IT Budgets

By Maria Valdez Haubrich

Despite qualms about a possible double-dip recession and lots of uncertain economic indicators, companies by and large aren’t planning to cut their IT budgets, InformationWeek reports.

InformationWeek took a look at several different IT-related surveys, including the Society for Information Management’s poll of CIOs and other IT leaders. In that survey, more than half (56 percent) of respondents said their companies’ 2011 IT budgets will be higher than last year’s. In contrast, only 17 percent expect to cut IT budgets cut. This is a dramatic change from 2010, when only 34 percent expected IT budgets to rise and 35 percent expected them to fall.

What about next year? The picture is just as bright for 2012, with 51 percent projecting that their IT budget will rise and only 15% predicting them to decline. InformationWeek notes that its own survey, done a few months prior to the SIM survey, was even more optimistic, with 69 percent of companies surveyed predicting 2011 IT budgets to increase.

So despite the gloomy economic news, why are IT departments still planning to spend? One expert cited in the article notes that in prior recessions, the value of IT wasn’t as evident and so it was one of the first areas to be cut. That view is outdated today.

A senior technology equity analyst with Wells Fargo, who also agrees that IT budgets are likely to stay on course, told InformationWeek there are several reasons IT budgets won’t get cut: First, they’re already lean from the prior recession. Second, since companies’ growth projections have been cautious to begin with, an economic slowdown won’t make a huge difference. Third, IT is now seen as essential to remaining competitive.

That said, what areas are businesses focusing their IT budgets on? Business intelligence is still number-one on the list, but cloud computing moved from number 5 on the list last year to number 2. Mobile apps and customer relationship management (CRM) also entered the top five.

What’s your IT priority this year, and why?

Image by Flickr user Blake Patterson (Creative Commons)

This entry was posted on Thursday, October 20th, 2011 at 6:00 am and is filed under Small Business, small business, Social CRM, Technology. You can follow any responses to this entry through the RSS 2.0 feed.


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