A new European survey, carried out by Gartner, found that the number of companies planning to reduce their IT budgets in 2002 decreased by nine percentage points compared to 2001 figures. In 2003, the trend is set to continue with 26.4% expecting to increase budgets, 25.9% expecting to decrease, and 47.7% expecting to remain the same.
“Budget growth will remain flat for at least the next 12 months because companies have gone back to basics and are focused on integrating and rationalising their existing IT infrastructure, and optimising the over-spend of the last few years,” says Steve Prentice, vice president and director of research at Gartner. He added, “This will mean that vendors offering hardware, telecommunication equipment, network bandwidth and certain software products will continue to be challenged over the next 12 months.”
“There is a lack of consensus among IT directors at the moment,” continued Prentice. “The unity of purpose that fuelled the rush to establish a web presence during the boom years has disappeared. Today’s IT projects vary across areas such as business process optimisation, IT cost optimisation and application integration. This confirms that companies are subconsciously taking an IT spending ‘Gap Year’ – a concept we use advising companies to optimise and integrate existing projects and systems rather than embarking on new projects… Whilst IT spending is currently very tactical, managers must not lose sight of the long-term strategic business objectives that they are required to support.”
