IT budgets, salaries going up in 2007

IT budgets, salaries going up in 2007, CIOs say

IT budgets, staffing and salaries are expected to increase again in 2007, according to a survey of CIOs and other IT executives that are set to be released this week.

The survey will be discussed at the annual meeting of the Society for Information Management (SIM), an association of 3,000 CIOs, IT executives and academics. SIM’s meeting, which will focus on using technology to drive business value, will be held in Dallas.

In its annual survey, SIM found that 85% of CIOs expected their IT budgets to rise or hold steady in 2007. Similarly, 80% said their 2006 IT budgets had increased or held steady compared with 2005 levels.

“It’s continuing to look positive for IT in terms of career opportunities, salaries and investment,” says Jerry Luftman, a professor and associate dean for graduate IS programs at Stevens Institute of Technology in Hoboken, N.J., who conducted the survey.

Luftman says SIM members are accurate at predicting future budgets. “Last year, 20% of folks projected that their IT budgets would be cut this year, and that result was spot on,” he says.

In terms of staff, 72% of CIOs predicted that their IT head count would stay the same or rise in 2007. This result is consistent with the 72% of CIOs who said their IT head count actually did stay the same or rise from 2005 to 2006.

Luftman pointed out that last year CIOs predicted a larger rise in IT head count for 2006, with 83% of respondents predicting that staffing levels would stay the same or rise.

“The trend is still going up, which is good, but it’s not going up quite as much as IS executives were pushing for,” Luftman explains.

In terms of salaries, 71% of CIOs predicted that their IT staff would see raises in 2007, while 20% said salary levels would stay the same as 2006.

This compares with 74% of CIOs reporting raises for their IT staff in 2006 and another 23% seeing salaries hold steady.

“This is a good story, with 97% of IS executives saying that their salaries are the same or better than a year ago,” Luftman says. “Historically, they are pretty good at projecting salaries for the next year.”

The survey finds that more CIOs report to the CEO of their companies, up to 45.2% this year from 42.6% last year. CIOs also are holding on to their positions longer, with the average tenure being 3.6 years, up from two years in the early 2000s.

“I’d like to see [tenure] over five years so that CIOs can have a stronger impact on the business,” Luftman says.

Offshore outsourcing remains an issue but not a big one. CIOs said that 3.3% of their 2007 IT budgets would go to offshore outsourcing, compared with 2.7% in 2006. On average, CIOs said that 4% of their IT budgets were allocated to offshore outsourcing in 2006.

Web services topped the list of the CIOs’ top technology developments. A newcomer to the list, Web services bested business intelligence and security technologies, which came in at Nos. 2 and 3.

This year’s SIM survey attracted 139 written responses from CIOs and IT executives who belong to the group. Read how the CIO and corporate vice president of Children’s Hospital Health System in Milwaukee interpreted the survey.