Economy freezing IT budgets, survey shows

Despite earlier plans to boost budgets in 2009, the recent economic crisis has many IT leaders tightening their belts and preparing for sparse spending in the coming months. (See a slideshow of what the economic rescue package could buy.)

Back in June, the Society for Information Management (SIM) polled more than 300 IT executives about their plans for IT spending in 2009 and this week released results that showed 44% planned for bigger budgets and 43% intended to increase staffing. Three-quarters of those polled also expected to see IT staff salaries increase in 2009. (Watch a slideshow of which Wall Street "fat cats" will be fine despite the economic crisis.)

"Budget and headcount forecasts remained strong, despite the fact that economic conditions were weakening at the time the survey was taken," said Jerry Luftman, SIM vice president for academic affairs and Distinguished Professor and Associate Dean at the Stevens Institute, in a SIM press release. (Listen to a podcast with Luftman.)

Yet a more recent tally from the CIO Executive Board revealed strikingly different spending plans. The late September survey of some 50 CIOs by the association for IT executives showed that more than half of those polled have put nonessential projects on hold and about one-fourth have decided to freeze IT hiring. And 61% of those surveyed admitted they were re-evaluating their 2009 budgets.

John Turner, director of network and systems at Brandeis University in Waltham, Mass., says his IT budget has been directly impacted by the current economic crisis.

"Our operating expenditure budgets have been frozen and cut, and we currently have a hiring freeze in effect," Turner reports. "There is an obvious direct financial impact to our institution when there is this amount of uncertainty in the market."