IT budgets to be slashed by firms
By Adrian Weckler
Irish companies will cut their IT budgets by up to half this year, according to a major new survey by the Irish Computer Society.
The survey, conducted among 200 senior Irish IT managers and executives, revealed that less than one in six IT managers expected any additional funding for IT projects or maintenance this year.
While one in five predicted no change in their IT budgets, almost two-thirds expected budget cuts of up to 50 per cent.
The startling figures look set to reignite a debate over the commitment of Irish companies to developing a smart economy, which the government has committed itself to. It may also disappoint Irish hardware and software vendors, who were hoping for a recovery in the industry this year.
The survey revealed that the vast majority of Irish companies allocated less than 10 per cent of their overall annual budget to IT projects and maintenance, while almost a third kept their IT budgets below €100,000.
At the other end of the spending scale, almost a quarter of large Irish organisations’ IT budgets were more than €1million, while 15 per cent of budgets were more than €3million.
The single biggest item to be cut from IT budgets will be contractors’ salaries, according to the survey. The next biggest items to be reduced will be desktop hardware (27 per cent) new staff recruitment (26 per cent) and desktop software (21 per cent). Staff salaries will also be reduced, according to the survey.
The survey also showed that staff salaries were the single largest item (30 per cent) of expenditure for Irish firms’ IT budgets. Hardware (23 per cent) and software (21 per cent) came next, while maintenance (18 per cent) and outsourced services (17 per cent) made up the rest of the typical company’s expenditure.
On the positive side, IT security, cloud computing and social networking projects will all see an increase in funding, according to the survey. Data storage, network infrastructure and server hardware should also see new orders generated.
The survey also revealed that 56 per cent of senior management in Irish companies merely viewed IT as a method of reducing costs.
“I find this a disappointingly blinkered view of the potential uses of ICT to business in ways which would otherwise be impossible,” said Fintan Swanton, president of the Irish Computer Society.
The survey also revealed that IT managers relied strongly on word-of-mouth recommendations for purchasing decisions. However, it also showed that almost two-thirds of senior IT executives relied on print or online IT trade publications for information and advice on purchasing goods and services.
The survey was conducted in December 2009. A quarter of those surveyed were IT managers in public sector bodies.
Queries regard the survey can be addressed to Tom O’Sullivan, professional services manager of the Irish Computer Society; tom@ics.ie
