CXO

IT Pros Spending Smarter in 2001—But Still Spending

Despite the downturn in the economy, companies are still spending money on IT in 2001, but they are spending smarter. Seventy percent plan to spend the same or more this year as opposed to last year.

Liz Warin or Lisa WahrmundCorporate Technology Communications(312) 832-9300lwarin@ctcomm.comlwahrmund@ctcomm.com
TechRepublic Survey Reveals a Change in Spending Priorities
LOUISVILLE, Ky., May 10, 2001—Despite the downturn in the economy, companies are still spending money on information technology (IT) in 2001—but they are spending smarter. Although many experts predicted IT spending would be down drastically this year, a recent survey of IT pros by TechRepublic found that 70 percent of respondents said they plan to spend the same or more this year as opposed to last. But their priorities have changed.

TechRepublic (www.techrepublic.com) is a Web-based resource that provides real-world information to IT pros in real time. TechRepublic surveyed 470 IT professionals about their companies' IT spending plans for 2001 and found that budgets are the same or moderately higher this year compared to last year. Eleven percent of respondents planned no change in budget from last year to this year; 26 percent planned to spend 1 percent to 10 percent more; 17 percent planned to spend 11 percent to 25 percent more; 7 percent planned to spend 26 percent to 50 percent more; and 9 percent planned to spend more than 50 percent more. 

Respondents disclosed, however, that spending priorities have changed. Companies are reevaluating how they spend, and they are now looking for a better return on investment. Thirty-seven percent expect a better return on investment in 2001, and 30 percent want more value without spending more. The survey showed that some respondents have had to revise their 2001 IT budgets. Although 40 percent report the slowing economy has not changed their budget plans, 45 percent reported a decrease in the original IT budget for 2001, and 16 percent reported an increase.

The survey also found that if the economy worsens and companies are forced to cut back in certain areas, the most aggressive spending reductions would be in consulting services (42 percent). Asked what they were least likely to cut, respondents said personnel expenses including training (23 percent), network equipment (17 percent), and server equipment (15 percent).

Plans were mixed for spending on enterprise resource planning (ERP) products like customer relationship management (CRM) and supply chain management (SCM) solutions. Eight percent of respondents said they were least likely to make budget cuts in this category, while 11 percent reported they were most likely to aggressively cut ERP spending if they had to cut something.

"Although companies may not be spending less money, they are spending their money differently," said Tom Cottingham, founder and chief executive officer of TechRepublic. "Companies are shifting their priorities and investing in core equipment, like networks and servers, and areas that offer more direct return on investment. When money is tighter, IT investments are still critical—they can help drive new efficiencies and productivity—but they must show return more quickly.”

As part of the monthlong series on doing more with less, TechRepublic explored how some companies were learning to do IT on a shoestring budget. For example, one company, Population Action International, decided that instead of paying a consultant to perform monthly IT support systems checkups, they would pay the consultant once to teach their staff to perform the checkups on their own. This ended up saving the company 30 percent on consulting fees in the first year. 

In an article called “IT Managers: Prepare To Do More with Less,” Bob Artner, vice president of content at TechRepublic, encouraged IT leaders to adapt to the new budget realities, telling them:

  • ·        Your consulting budget may take a huge hit.
  • ·        You may need to cancel planned projects that haven't started yet.
  • ·        You may have to stretch out existing projects or deployments.
  • ·        You may have to deal with morale problems.
  • ·        You may not be able to afford to counter an offer.
  • ·        You may have to reduce staff.

Full results on the IT spending survey are available from TechRepublic. The company also offers tailored surveys for companies seeking information on IT spending plans in specific market segments. Throughout the month of April, TechRepublic focused on the issue of disaster recovery plans.

About TechRepublic
TechRepublic provides real-world information to IT pros in real time at www.techrepublic.com. It also provides its members with the largest and most comprehensive source of IT community, content, and research available anywhere. TechRepublic’s services include IT industry news, analysis, columns, articles, downloads, career-management tips, forums, a job directory, a peer directory, a vendor directory, e-commerce offerings, and electronic newsletters.

Content on TechRepublic's Web site is categorized by IT job segments. CIO Republic provides analysis and insight for an organization’s chief information officer, chief technology officer, and other IT executives. Developer Republic features in-depth information specifically for the needs of enterprise developers. IT Consultant Republic features content tailored to today’s IT consultant. IT Manager Republic provides information and resources for IT managers. Support Republic’s solutions assist help desk professionals. NetAdmin Republic features content written especially for network administrators.

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