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>>> Posted: September 1, 2001
TECH POLL REPORT
Tech Spending Up Slightly, But No Real Improvements Expected Until 2002
BY LORRAINE COSGROVE WARE
For the second consecutive month, technology spending indicators measured in the CIO Tech Poll either held steady or showed modest improvement.
CIO's Future Technology Growth Index,
... which measures the overall health of IT budgets and the significance of new economy technologies on IT spending,
... increased from July to August.
The 219 CIOs surveyed predicted that IT budgets will increase at a higher rate in the coming 12 months than reported in the previous three months.
Anticipated investment in B2B2C and expected revenue from the Internet both reached five-month highs as well, hinting that the worst of the tech slump is nearing an end.
Future Technology Growth Index Returns to April 2001 Levels
Current and future IT budget increases, which fell to 5.2 and 3.8 respectively in May, climbed back up to levels not seen since April.
After falling to an all time low of 1.7 in May, the 12-month Future Technology Growth Index (TGIF), a measure of IT budget activity in the coming 12 months, rose 25% from 2.5 in July to 3.1 in August.
When asked how current IT budgets compared with the previous 12 months, panelists reported that IT budgets increased 7.2% on average-up 22% from the levels reported in July (5.9%).
Additionally, estimated IT budget increases for the next 12 months inched up from 6.2% in July to 7.2% in August, an increase of 16%.
Each month, CIO magazine, in partnership with Ed Yardeni, chief investment strategist of Deutsche Banc Alex. Brown, surveys a panel of senior executives on current and future IT spending as well as other IT issues. In terms of title, 90% of panel members were CIOs. The remaining 10% were CEOs, CFOs, COOs or other members of senior management. Almost all (97%) of the panel members were based in North America. Companies included in CIO's Tech Poll represented a broad range of industries, including technology services, finance, manufacturing, health care and distribution. In terms of company size, 39% of the respondents were from companies with 1,000 or more employees.
Glimmer of Optimism
Investment in B2B2C Internet systems, as a percent of the overall IT budget over the past 12 months, increased to 15.2%, up from 13.3% in July.
Going forward, IT professionals plan to invest 15.9% of IT budgets in B2B2C systems over the next 12 months, up from 15.3% reported in the previous month.
Expected revenue from the Internet as a percent of total revenue increased approximately 13% from July levels.
Panelists reported that the IT labor situation is improving.
The majority of CIOs surveyed (68%) said that labor was available, while only 17% indicated that IT labor was hard to find.
Results of a hiring survey conducted by RHI Consulting forecasts an increase in IT hiring for the fourth quarter of this year.
... The hiring survey, which was administered to American CIOs in companies with 100 employees or more, reported that 18% of survey respondents plan to add IT staff in Q4 2001 while only 3% expected staff reductions.
... Katherine Spencer Lee, executive director at RHI Consulting, believes that the slight upturn in hiring is a correction to companies' overly drastic staff cuts earlier in the year. <<< |
