Capital Budgets for IT Hit the Wall

Capital Budgets for IT Hit the Wall

For 2008 the top IT spending is on improving service level peformance.

The economic slowdown (some would say free fall) has hit corporate IT capital budgets, impacting their ability to fund long-term investments in IT infrastructure, equipment and major systems, according to a recent report from research firm Computer Economics Inc. Based on a study of over 200 IT executives, the report confirms a pullback in IT spending growth, with spending this year flat compared to 2007.

"As organizations are placing a lower priority on new system development," the report states, "it is natural that IT capital spending would show slower growth. It is also logical that spending cuts would fall harder on capital spending, much of which represents new initiatives that can be deferred, than on operational spending, which largely comprises ongoing maintenance and other spending that is non-discretionary."

The top five IT spending priorities in 2008, according to the survey respondents, are:

  1. Improving our IT service level performance
  2. Improving our disaster recovery capabilities
  3. Increasing IT security
  4. Reducing the cost of ongoing IT maintenance and support
  5. Improving the skills of our IT staff.

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