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Pragmatism, Persistence Fuel 2010 IT Budget and Hiring Trends

By Laura DiDio
Dec 16, 2009 4:00 AM PT

From Australia to Italy, from Canada to Columbia, and from the U.S. to South Africa, pragmatism is the order of the day for IT departments as they struggle to stretch their 2010 budgets and resources to make much needed infrastructure upgrades in the face of a still uncertain and tight economy.

Pragmatism, Persistence Fuel 2010 IT Budget and Hiring Trends

Those are the results of a new 2010 IT & Technology Trends survey that polled over 500 respondents from 18 countries worldwide on IT budget and staffing issues for the year ahead. ITIC partnered with Stratus Technologies and Sunbelt Software to poll C-level executives and IT managers and found that businesses are in a better place now than they were at the close of 2008. There's even a hint of cautious optimism in the air.

By and large, organizations of all sizes and across all verticals will maintain IT staffing levels and budgets during 2010 as they continue to implement upgrade and migration projects that began in 2009, the survey results indicate.

Modest Improvements

Nearly one-third of organizations -- 31 percent -- revealed that their IT budgets would remain the same in 2010, while 27 percent said their budgets would increase. A 17 percent minority expected their IT budgets to decrease in the New Year. Interestingly, 15 percent of respondents said their 2010 IT budgets were still not approved, and 10 percent remained unsure of their budgets for the next 12 months.

Among respondents who indicated their budgets would increase, the largest percentage -- 27 percent -- said the increases would be modest -- in the 4-6 percent range. Only 3 percent indicated their budgets would rise by 30 percent or more, while 50 percent were unsure.

Among the 17 percent minority of respondents who said their budgets would decrease, cuts were expected to be minimal or modest. Some 7 percent said they would decline by 1-3 percent, while another 11 percent said they would decline by 4-6 percent. Only 7 percent of the respondents indicated their firms would slash 2010 IT budgets by 21 percent or more; 68 percent said they weren't sure how big their budget declines would be.

IT Hiring: Modest but Stable

It is apparent that IT staffing levels are stable, based on the survey responses. However, it's safe to say that very few firms would consider themselves fully staffed or even at pre-December 2007 levels, which was when the recession officially began, according to the U.S. government.

Although the economy has not fully recovered, there is a sense from the survey respondents that the worst may be behind them. Over half of those polled -- 52 percent -- said their organizations would maintain current IT staffing levels for 2010.

There are signs that business is improving: 25 percent of those polled said their organizations would hire additional IT staff as needed in the coming 12 months. Only a very small 2 percent minority said their firms were planning layoffs. Another 14 percent of respondents said their organizations had made no decisions on hiring and were taking a wait-and-see approach.

Current IT staffing levels: Surprisingly, just over one-quarter -- 26 percent -- of survey respondents indicated that their IT departments were smaller than they were in 2008. The biggest percentage -- 42 percent -- said they were not, while another 32 percent said their IT staffing levels were about the same as they were a year ago.

Anecdotal responses from around the globe all shared a common thread: pragmatism and a desire to do what it takes to weather the ongoing economic downturn. Many respondents voiced concern about staying on top of crucial issues like security and disaster recovery, and finding the funds to make the necessary desktop and server hardware, software and application upgrades.

Whatever It Takes

Once again, pragmatism seems to be the byword. Many of the survey respondents simply said they were picking up the slack and working harder and longer hours.

It's also apparent that some vertical markets have been hit harder by the recession than others. Government agencies, state and local municipalities have suffered. Likewise, the automotive industry and smaller hospitals and consulting firms have also been hit hard over the past 18 months.

An IT manager at a small government agency noted that a large part of their budget came from state and federal grants.

"Those sources are about dry in this economy," he said. "We took a 65-percent cut in state funding this year and pray that we can maintain that low level in next year's state budget rather than take another cut."

An IT manager at a mid-sized U.S. consulting firm said his organization was just trying to weather the severe downturn.

"Our existing clients have cut back on spending and only do what is absolutely necessary to keep their systems running. New clients are much more difficult to cultivate, so survival over this period is the top priority," he observed.

"Our main goal is to keep the infrastructure updated, supported and available with less staff," said an IT manager at a mid-sized healthcare firm with 1,000 users.

No one is sure when the economy will rebound to pre-2007 levels. Meanwhile, IT departments are doing the only thing they can do: endure. The silver lining in the cloud is that most organizations have adapted to the belt tightening and working longer hours and have somehow generally managed to keep the corporate data centers up and running. It may not be comfortable or optimal, but it's working.


Laura DiDio is the principal at Information Technology Intelligence Corp. (ITIC), a research and consulting firm that covers the high-tech industry.


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