CIO survey: IT spending projections drop sharply in May

CIO - IT spending projections by CIOs dropped last month to their lowest level since November 2003, according to the latest CIO Magazine Tech Poll (download PDF), with just 4.8% of respondents predicting growth for the next 12 months. That's down from April, when 7.9% of those who took part in the survey expected growth over the next year.
"We can't deny this is one of the deepest drops we've mapped in one month in the five-year history of the poll," said Gary Beach, group publisher at CXO Media Inc. "But on the other side of the coin, [that figure] is pretty consistent with what others are saying."
It's also important to note that 14.8% of the CIOs surveyed reported that IT labor is hard to find, he said.
"I think the bigger story here is the continued focus on the tightening labor market, where 15% of the overall respondents complain that it is hard to find key IT labor," Beach said. "And for companies with more than 5,000 employees, 34.9% said it was hard finding good IT labor. That's more than double, so the bigger firms cut too deep, too quick two or three years ago when companies focused in on lowering costs."
When asked about spending in eight specific IT categories, the average number of CIOs who planned to increase spending in the next 12 months was 39.2% in May, down from 43.3% who said that in April. Also in May, 15.1% of CIOs said they planned to decrease spending in the next year. That's slightly higher than the 14% who said in April they would be cutting spending.
Security software remains the strongest sector in the poll, with 54% of respondents predicting they would increase spending in that area, down from 58.7% in April. Storage also continues to be a priority, with 46.5% of respondents planning increased spending in this category, slightly less than the 50% who said that in the April poll.
According to the latest CIO poll, 45.1% of respondents plan to boost spending on computer hardware, down from 49.2% in April, while 21.4% intend to decrease spending. That's up from April, when 18.7% of respondents expected lower spending.
When asked about the biggest barrier to implementing IT at their companies, the No. 1 answer -- from 41.2% of the poll respondents -- was that firms are unwilling to change business processes to take advantage of new and more powerful technology, Beach said.
And 19% of the CIOs said the biggest barrier is that business colleagues justdon't understand IT, he said. "So there seems to be a standoff between the business execs and the CIOs."
Who's to blame?
"I would say that it's probably the CIOs' fault, because they're not educating the business execs," Beach said. "Because the business leaders are comfortable with what they're doing, they say why should they change the business practice to take advantage of more powerful technology?"