The IT spending freeze is over. After dropping by 0.2 percent in 2003, IT bud- gets are increasing by 2.2 percent in 2004. Even large corporations, which cut their budgets a year ago, plan to increase IT spending this year, by 2.0 percent, while small companies expect to spend fully 8.3 percent more than last year. The reason: With the economy rebounding, the more than 600 IT executives who responded to this month's survey are planning to increase IT spending primarily to generate revenues. Planned spending for 2004 is up over 15 percent on most kinds of IT initiatives compared to 2003, including CRM, business intelligence and distance learning. But there's another reason CIOs are planning to up spending: They've gotten better at managing their budgets. Most IT organizations actually came in under plan in 2003, as CIOs improved the IT budgeting process and consolidated control over spending in the IT organization. Still, nearly half of IT executives believe their company is spending too much on maintenance and operations, and not enough on strategic initiatives. So don't be surprised then if actual IT spending in 2004 goes up even more than budgeted.
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