Report: Companies plan to slash IT spending

News by Fiona Raisbeck

British businesses will slash IT spending next year as a result of gloomy forecasts for the global economy, new research shows.

British businesses will slash IT spending next year as a result of gloomy forecasts for the global economy, new research shows.

The survey, released today by Gartner, found that companies expect to spend an average of just 2.8 per cent more on IT in 2007. In the UK that figure drops to only 0.9 per cent. This is markedly different to predictions made by analysts earlier in the year that claimed IT budgets would rise by 6 per cent.

"A number of factors have combined to force enterprises to lower their IT spending forecasts from the first half of 2006," said Jed Rubin, director at Gartner Consulting. "Looking back at the distribution of spending this year, enterprises spent more to support core business operations. This includes increasingly complex infrastructure and applications requirements, rising energy costs, regulatory requirements and other non-discretionary spending to keep the business running."

Rubin claims this increase in "run the business" spending has overwhelmed budget resources that were set aside for strategic and transformational investment, causing organisations to cut back IT spending in the coming year.

The research also revealed the differences between sectors. The survey predicts that the biggest growth in IT spending will be in the media industry, with nearly seven per cent. Conversely, the consumer products sector will see the biggest decline in IT costs next year, as spending is expected to fall by nearly 6 percent, down from an 8 percent increase in 2006.

Topics:

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events