CIOs report expected increases in IT budget growth again this month. According to the latest CIO Magazine Tech Poll, IT budgets will increase 8.6 percent in the coming 12 months, up from 7.8 percent reported in December, 2005. IT spending projections have been climbing steadily after dropping to 5.2 percent in October of last year. While many CIOs say they’re boosting investment in infrastructure, companies are also moving ahead with new technologies such as VoIP and mobile solutions.
The Tech Future Growth Index (TFGI), which projects IT activity over the next 12 months, improved this quarter as well, climbing to 3.8 in March—up from 3.1 in the December Poll.
When asked about spending on eight specific IT categories, the average number of panelists who plan to increase spending in the coming year was 44.8 percent in January, up from 40.7 percent in the previous Poll. Spending on Storage Systems showed the greatest potential with 56.7 percent of respondents planning to increase investment in this category, up from 49.7 percent reported in December. Close to half (49 percent) will increase spending in telecom equipment while 42 percent will increase investment in data networking equipment.
When asked about new technologies, half (51 percent) reported that their companies are making significant investments in mobile technologies (52 percent) server virtualization/consolidation (51 percent) and VoIP (41 percent).
Labor Market Continues to Tighten
Concerns about IT labor scarcity are growing. One quarter (26 percent) of CIOs surveyed described IT labor as “hard to find”, a significant jump compared to one year ago (13 percent). Additionally, 66 percent said IT labor was “available” in our latest poll (versus 74 percent) and five percent said “hard to find” compared with 13 percent reported in March 2005. In a recent survey conducted by the Society of Information Management (SIM) , nearly 80 percent of respondents indicated that they would be hiring to fill entry and mid-level IT positions in the coming year. However, the confluence of global sourcing, retiring baby boomers and declining enrollment in IT programs in U.S. universities is creating a staffing challenge. SIM suggests that CIOs consider structural changes in the IT function and rethink the role of the IT professional to train and retain key IT staff.
Each quarter, CIO magazine, in partnership with Deutsche Bank Securities and Ed Yardeni, chief investment strategist, Oak Associates, surveys a panel of senior executives on current and future IT spending as well as other IT issues. In March, 180 executives responded to the survey. Companies with 1,000 to 5,000 employees represented 30 percent of the responses.
CIO’s Tech Poll represented a broad range of industries, including finance (19 percent), non-computer/communications manufacturing (11 percent ), state or local government (9 percent), technology services (9 percent), education (8 percent) and health care (8 percent).
Recent Reports:
February 2006
Tech Spending Forecast Continues to Climb
Companies Prepare for Growth by Investing in Infrastructure
December 2005
CIOs Upbeat on IT Budgets Again this Month
IT Executives Say IT Spending to Increase in 2006
November 2005
IT Spending Outlook Perks Up
CIOs Adjust Budget Growth Forecasts Up Slightly
