European CIOs bullish over IT budgets

Gartner finds that expenditure cuts are US phenomenon.

By CIO UK staff
Published: 09:38 GMT, 07 April 08

CIOs in Europe see no evidence for the reported squeeze on IT expenditure and some are even seeing a rise in budgets.

That's according to a First Quarter Worldwide CIO survey conducted by market analysts Gartner, which found that some IT execs in Europe and Asia Pacific are seeing their budgets grow by around three percent and five percent respectively. CIOs responding to the survey said they saw budget reduction as a US phenomenon. Gartner believes this indicates that the European and Asia Pacific markets feel independent of the US economic conditions.

“The first quarter should be the toughest in terms of budget changes as executives are cautious at the start of the year,” said Mark MacDonald, group vice president and head of research for Gartner Executive Programs.

No change in 2008 budget was reported by 62 percent of CIOs, 23 percent did report a drop in budget, but 15 percent said their budget had in fact increased by 15 percent. CIOs who have had their budget cut said it was only by 10 percent. Gartner surveyed 1,011 CIOs in the first quarter.

“This indicates that IT budgets are not the ‘target rich’ environment for cost cutting they have been in the past,” MacDonald said. Gartner carried out the survey to measure the impact of the wider economic slowness on CIOs. The Credit Crunch affecting major banking groups and a volatile US dollar have put a dark cloud over the economy in the first quarter of 2008. Gartner compared the results of this survey with the results from its Executive Programs 2008 CIO survey, which was conducted between September and December 2007 and had 1,500 respondents.

Despite the financial concerns, Gartner found that on 32 percent of those surveyed had a contingency plan in place for budget cuts.

CIOs told Gartner that the budget cuts they are witnessing are in line with corporate wide “belt-tightening” and not cuts or restructuring to their IT budgets. IT budget growth remains at 3.3 percent. MacDonald said, “We are seeing caution rather than wholesale cutting.”

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