IT budget growth estimates for the coming year increased again, according to the latest CIO Magazine Tech Poll. After dropping to 5.2 per cent in October 2005, CIOs’ budget growth estimates rose to 5.7 per cent in November and to 7.8 per cent in the December Poll. These increases reflect greater confidence among IT executives as we wrap up an economically challenging year and head into 2006.
The Tech Future Growth Index (TFGI), which projects IT activity over the next 12 months, improved month to month as well, climbing to 3.1 in December -- up from 2.1 last month.
The majority of CIOs (70 per cent) in CIO Magazine's December Poll indicated that their IT spending will increase in 2006, though most (54 per cent) indicated that the increase will be modest. Technology areas that show the most improvement for investment month-to-month included infrastructure software (37 per cent will increase spending compared to 32 per cent in November) and e-business applications software (30 per cent versus 23 per cent in last month’s poll.) Additionally, investments in security software (50 per cent will increase investment) and storage systems (50 per cent will increase investment) will remain strong in the coming year.
IT is decidedly strategic
2006 promises to be a demanding year for IT executives as their CEOs turn up the pressure to both contain IT costs and drive business innovation. According to CIO Magazine’s Fourth Annual State of the CIO Survey, the view of technology in businesses has most definitely shifted. When we first launched our survey of top IT executives, the majority (58 per cent) viewed IT’s role as a utility that supports pre-defined business initiatives. Today, close to three-quarters (73 per cent) of CIOs surveyed believe IT’s role is strategic—one that proactively envisions business opportunities and then initiates with technology. Looking ahead in 2006, CIOs report that their greatest impact on the business will be to lower business costs, drive innovation and contribute to the company’s competitive advantage.
Each month, 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 November, 171 executives responded to the survey. Companies with more than 5,000 employees represented 14 per cent of the responses.
CIO’s Tech Poll represented a broad range of industries, including finance (14 per cent), non-computer/communications manufacturing (11 per cent ), health care (11 per cent), technology services (11 per cent), education (9 per cent) and state or local government (9 per cent).