IT Still Relevant Even in a Downturn

By Allen Bernard

(Back to article)

Even when faced with a discouraging economic outlook, CEOs, CIOs and top enterprise managers projected increased budgets and staffing needs for 2009. That's according to a survey commissioned by the Society for Information Management (SIM) that was completed in June.


More than three-hundred respondents, primarily senior IT leaders within SIM's membership base, participated, representing data from nearly three-hundred companies.


The results showed that:


       44% project their 2009 budgets will increase from 2008.

       43% estimate they will have a greater headcount in 2009 compared to 2008.

       75% project IT staff salaries will increase in 2009.

       An average of 5.2% of IT budgets is anticipated to be spent on outsourcing (a 2% increase from 2008).


While the survey was taken before the recent financial developments, SIM VP for Academic Affairs and Distinguished Professor and Associate Dean at the Stevens Institute of Technology, believes that the results overall are very positive for the IT industry.


“It’s clear that unlike previous economic downturns, or threat of a downturn, this go around it seems IT and business folks are working proactively and much closer together as opposed to waiting for the disaster to hit and slicing and dicing,” said Luftman.


The SIM study confirms that business leaders continue to view IT as an important strategic partner and understand that it plays an important role in growing organizations, even in times of economic distress.


Budgeting and staffing projections are only a small part of the comprehensive SIM study. Additional research results including the state of the CIO, business/technology alignment, and career development will be presented during SIM's annual conference, SIMposium, taking place November 9-12 in Orlando, FL. Luftman will also provide his up-to-date views on the impact the current economic situation will have on IT in 2009, based on historical results from SIM's past surveys.


But, given business’ dependence on IT today, Luftman doubts IT will see the Draconian operational cuts that have come in days past. What will suffer will be new projects. “Clearly companies understand the dependence they have on IT not just for back-office stuff but for strategy initiatives so you can’t slice you could in the past. Thank goodness … it’s reaching a turning point in the relationship between IT and the business”


Even SAP’s recent news of falling orders for the latter half of September are most likely a reflection of companies hedging their bets and putting new projects on hold, said Luftman.


“(There’s) a clear recognition we have to tighten our belts a little bit … but I don’t think I see the sky is falling yet for IT.”