IT budgets for 2005 climbed for almost half of the respondents to a Network World survey, but that’s little solace for most. An even larger percentage of the 390 readers queried say their budgets are inadequate.
Of the fortunate readers who saw their budgets grow for 2005, about one-third got increases of 5% or less, while another third saw increases of 6% to 10%, and a lucky portion of the remainder saw increases of 11% or more.
That’s the good news. The bad news is that 34% of the companies surveyed said their budgets remained flat with last year, while 17% saw decreases.
Given the mix, it isn’t surprising that many IT managers feel they don’t have the resources needed to get the job done. Of the respondents, 9% said their budgets are very inadequate, while another 41% labeled them somewhat inadequate.
Broken out like this, the picture doesn’t look very rosy, but other industry surveys paint a prettier portrait. Forrester Research analyst Andrew Bartels says 2005 IT budgets are up about 4.5% compared with last year. Forrester forecasts IT spending – what companies will spend, not just what they are budgeted to spend – will grow 7% this year.
Salaries continue to be a huge line item for the respondents of the Network World survey, accounting for an average of 29% of their budgets. Almost half of the survey takers increased their salary line this year, while most of the rest kept it flat, and a few cut back.
In terms of employment, 66% of respondents said they plan no change to IT head count. But 21% said they will add employees this year, while less than 8% said they would cut staff.
Interestingly enough, on average only 6% of representative 2005 IT budgets is devoted to contract labor, which for 40% of the respondents is the same as 2004 allocations and is a decrease for another 20%.
Capital equipment is the second-largest IT budget line item, accounting for an average of 25% of 2005 financial resources.
Asked to comment on specific spending plans for three of the hottest network categories – security, VoIP/convergence and wireless – a whopping 59% said they will spend more on security than they did last year..
And finally, with the bitter taste of regulation compliance still fresh in the mouths of public companies exiting 2004, we asked respondents what resources they would dedicate in 2005 to complying with federal regulations such as the Sarbanes-Oxley Act.
For companies regulated by such acts, 71% of the respondents made no budget changes for compliance in 2005, while some cut back resources, suggesting companies are getting ahead of the compliance curve.
