CXO

TechRepublic poll shows IT spending increasing but moving out of IT's control

A recent TechRepublic survey shows that IT spending will increase this year—but all of the money won't be going to the IT/IS divisions. Find out how your corporate spending compares with your peers'.


We recently asked TechRepublic members how they expect IT spending to fare this fiscal year. Not surprisingly, most of you anticipate increases, but the money, it seems, won’t necessarily go to the IT/IS divisions.

Of the 107 respondents to the survey, which ran only in the CIO/CTO community, 43 percent say they expect total IT spending in their organization to increase more than 10 percent. Another 21 percent anticipate an increase of less than 10 percent, while 24 percent of respondents predict their IT spending will stay the same. Only 12 percent expect their budgets to decrease.

The majority of TechRepublic members say their IT spending will increase this year.


But compared to the IT budget, only 27 percent of the respondents expect more than a 10 percent raise. Another 26 percent expect an increase between 1 percent and 10 percent. Thirty percent expect their budgets to stay the same, while 17 percent anticipate a decrease.

So if companies are spending more on IT, why aren’t more IT workers expecting the money to fall into their budget? Increasingly, IT dollars are moving out of the IT department and into the individual business units, according to a 1999 Gartner report titled “Reported spending vs. IT spending: Why the difference?”

Gartner predicts that by 2003, the IS budget will represent only 40 percent of IT spending for large corporations.

Most TechRepublic members say their IT divisions’ budgets will increase as well.


The responses to our survey suggest that IT is already experiencing that shift. When asked whether the IT division controls all the IT-related spending, the overwhelming majority—74 percent—answered no.

It’s not just software that individual business units control, either. A majority of respondents say that individual divisions pay for hardware, software, upgrades, and training. Seventy-nine respondents say that training falls under the business units’ domain. Web-related expenses are generally controlled by IT, according to TechRepublic’s survey, but 27 respondents say their companies allow business units to control Web-related expenses.

Web-related expenses still lie primarily in the IT-domain.


Still, our survey found that IT professionals find it easier to justify infrastructure and hardware cost than Internet- or e-commerce-related expenses. Only 42 respondents say they found it easy to justify Internet-related expenses, versus 69 respondents who say hardware was easy to justify.

Despite the widely publicized difficulties IT faces in attracting and retaining staff, only 11 respondents list staffing as an expense that is easy to justify to upper management.

Security receives 51 votes as an easy-to-justify expenditure.

Should CIOs fight the trend for IT dollars to move out of the IT budget? How do you protect your IT dollars? Share your war stories and advice by e-mailing us or posting below.

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