If you're making any final adjustments to your IT budget for 2003, here's some good news that might convince your CFO to nudge those figures a little higher. In a recent survey of top IT managers by CIO magazine, around half of the 301 respondents stated that they expect a pickup in IT spending this quarter or during 2003. Most of the other respondents stated that their spending has already picked up or never declined in the first place.
The survey, which CIO magazine completed in mid-November, included over 100 respondents from mid-market companies in North America. The table below shows the answers that the study participants provided when asked about an IT spending pickup.
As a whole, the study participants forecasted that their IT budgets will grow at an average rate of 5.1% over the next 12 months. This is a significant increase from the 4.4% rate that the participants forecasted in a similar survey conducted by CIO magazine back in October. It also contrasts sharply with reports from study participants that IT spending for the past 12 months was down 0.5% from the previous year.
When do you expect a pickup in your IT spending?
|
It never slowed down
|
15.9%
|
|
It has already picked up
|
11.3%
|
|
Fourth quarter of 2002
|
3.3%
|
|
First half of 2003
|
26.2%
|
|
Second half of 2003
|
20.9%
|
|
Beyond 2003
|
15.0%
|
|
Not sure
|
7.3%
|
Making Sense of Spending Surveys
Of course, other research groups have come out with their own studies that paint different pictures of IT spending for 2003. Back in October, Gartner Group released results from its 2002 budget survey, which indicated that 2003 spending would decline by 0.2% after plummeting 7.1% during 2002. By contrast, International Data Corporation recently predicted that worldwide IT spending in 2003 will grow by 9% over 2002 levels and that the recovery will actually begin during the fourth quarter of this year.
Before you throw up your hands in despair over getting a single reliable figure for spending increases, allow me to let you in on a secret. Over the years, I've found that Gartner Group typically underestimates future IT spending while IDC overestimates it. This largely happens because the two groups calculate IT spending in very different ways. Without going into the arcane details of survey methodologies, here is the fundamental difference between the two firms.
- Gartner Group asks its study participants--who are mostly managers of corporate IT departments--to estimate their IT budget for the next year. This budget excludes spending that is outside the control of the central IT department.
- IDC asks its study participants--who are a mix of IT managers and other managers with technology purchasing authority--to estimate their IT spending for the next year. This includes any spending that might take place within the company.
Given these different approaches, it becomes easy to see why Gartner Group's figures would be less optimistic than IDC's figures. Budget forecasts are typically more conservative than forecasts of actual spending; likewise, forecasts that exclude out-of-budget purchases at the departmental level are more conservative than those that include them. As a result, when Gartner Group and IDC talk about IT spending increases, they are really talking about two different things.
While CIO magazine's spending surveys, like those of Gartner, gather information from top IT managers, they do so in a different manner. Gartner Group asks study participants to provide dollar figures for this year's and next year's budget and then calculates the percentage change between the two. By contrast, CIO magazine asks its participants to estimate the percentage that their budget will change over the next twelve months. This simpler and more direct method is, in my opinion, a better way of determining how IT managers think their IT spending levels will change over the next year. As such, I tend to look to the CIO magazine polls as a more reliable indicator of the spending changes that most companies will actually make.
Now that I've provided you with a brief seminar on the games that IT research firms play, you should be better equipped to take those final funding requests down the hall to senior management. Before you do so, however, be sure to check out the article I wrote earlier this year that reveals another spending survey secret. Between these two articles and your own spending calculations, your crystal ball on next year's budget should become a little clearer.
Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at
More than ever, there is a demand for IT to deliver innovation. Your IBM i has been an essential part of your business operations for years. However, your organization may struggle to maintain the current system and implement new projects. The thousands of customers we've worked with and surveyed state that expectations regarding the digital footprint and vision of the company are not aligned with the current IT environment.
TRY the one package that solves all your document design and printing challenges on all your platforms. Produce bar code labels, electronic forms, ad hoc reports, and RFID tags – without programming! MarkMagic is the only document design and print solution that combines report writing, WYSIWYG label and forms design, and conditional printing in one integrated product. Make sure your data survives when catastrophe hits. Request your trial now! Request Now.
Forms of ransomware has been around for over 30 years, and with more and more organizations suffering attacks each year, it continues to endure. What has made ransomware such a durable threat and what is the best way to combat it? In order to prevent ransomware, organizations must first understand how it works.
Disaster protection is vital to every business. Yet, it often consists of patched together procedures that are prone to error. From automatic backups to data encryption to media management, Robot automates the routine (yet often complex) tasks of iSeries backup and recovery, saving you time and money and making the process safer and more reliable. Automate your backups with the Robot Backup and Recovery Solution. Key features include:
Business users want new applications now. Market and regulatory pressures require faster application updates and delivery into production. Your IBM i developers may be approaching retirement, and you see no sure way to fill their positions with experienced developers. In addition, you may be caught between maintaining your existing applications and the uncertainty of moving to something new.
IT managers hoping to find new IBM i talent are discovering that the pool of experienced RPG programmers and operators or administrators with intimate knowledge of the operating system and the applications that run on it is small. This begs the question: How will you manage the platform that supports such a big part of your business? This guide offers strategies and software suggestions to help you plan IT staffing and resources and smooth the transition after your AS/400 talent retires. Read on to learn:
LATEST COMMENTS
MC Press Online