Global IT budgets to rise 3%: Gartner

The global IT budget is expected to increase by 3.3 per cent in 2008, slightly higher than 2007, according to a new Gartner EXP Worldwide Survey of CIOs.

However, if certain economies do experience a recession, the figure could see a drop.

The report also notes that Indian companies will report stronger-than-average IT budget increases of around 13 per cent versus the world average of 3.3 per cent for 2008.

Keeping recession in mind, Gartner is recommending that its CIO clients should work on two budgets. One would be the official IT budget, which assumes continuous growth. The other, which Gartner calls a 'shadow budget', will help the company to prioritise projects.

Peter Sondergaard, global head of research, Gartner said, "We are recommending a shadow budget that assumes a budget cut. We are asking CIOs to do a bit of homework upfront, so that if a budget cut is announced, they know which projects need to be prioritised and what can be cut."

Enterprises are willing to invest in IT that delivers distinctive solutions. IT budgets at these companies are growing at a rate of 4.9 per cent on an average, compared with IT budgets at generic IT shops which will rise by an average 3.1 per cent.

"Even if there is a recession, it does not mean that all goes out of the window. Because while the budgets might go down, the CIO priorities and business demand will not be compromised. They will have to meet their customer and business requirements," said Partha Iyengar, head of research, India, Gartner.

India's ICT market is estimated to grow at a five-year compound annual growth rate (CAGR) of 20.3 per cent to reach $24.3 billion, or nearly 2 per cent of the country's GDP, by 2011.

The increased spending by Indian CIOs is directed primarily towards building new business capabilities, with 30 per cent of the IT spend allocated for business growth and 19 per cent for business transformation.

The role of Indian CIO is much more challenging than his global counterpart, according to Iyengar.

"Among the large companies, the CIOs have a direct link to the management. The CIOs do not have a direct line with the CEO in the medium segment, but are still expected to deliver on all parameters," added Iyengar.

The Indian IT landscape is evolving rapidly, driven by forces from different directions, including the continued growth in offshore IT services sector, but is increasingly augmented by strong domestic ICT growth.

The companies in India are trying to manage their strong growth in an increasingly resource-constrained environment by rapidly improving their IT infrastructure.