IT budgets inch upward

IT executives’ rising optimism about their business climates will translate into a 2.4% increase in IT budgets this year, according to a recent report from Forrester Research. That compares to a more cautious 1.7% IT budget increase originally projected at the end of 2003.

Last month, Forrester surveyed 878 IT decision-makers at large North American companies about their budget plans. Note that this particular study focuses on actual budgets and not all IT spending for the year, as firms may exceed their budgets for various rollouts or initiatives.

The survey results show that business services and finance and insurance firms lead other industries in year-over-year IT spending increases. Business services firms – such as consulting, transportation, and construction – and finance and insurance will enjoy the biggest year-over-year IT spending increases of roughly four percentage points. Conversely, the public sector, manufacturing and utilities and telecom will be hit with IT budget cuts.

Respondents are using their 2004 IT budgets for basic needs such as security, applications and PCs. Mobility technologies are also important to IT directors, as more than half plan to increase their deployments of wireless LANs, VPNs and personal firewalls. And companies that already have information management technology initiatives underway intend to earmark additional money for projects such as portals and content management.

According to Forrester’s findings, larger firms benefit from IT economies of scale. Overall, companies claim to spend $11,400 per company employee on IT. However, enterprises with more than 20,000 employees only spend $8,384 per employee on IT, as compared to $10,991 in firms with 5,000 to 9,999 employees and $12,474 for those companies with 1,000 to 4,999 on staff.http://www.forrester.com 

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