Spending 2003: How Bad is the Bite in Your Budget?

This year’s budget numbers are in: IT spending will be down, if slightly, with large companies taking the brunt of the hit. Large-company CIOs responding to our annual spending survey report a 0.5 percent decline in budgeted spending for 2003, while small companies are looking to increase spending by 5 percent. The decrease is leading to lower levels of spending in a variety of technologies and business initiatives.

Especially hard-hit: infrastructure, emerging technologies, and a number of efforts corporations clearly consider luxuries in tough times—including collaboration, distance learning and marketing automation. The big surprise? The added caution on the part of large companies. Significantly more large-company respondents attribute their cost-cutting to their current financial position than their small-company counterparts, and almost 50 percent more of them cite “reducing operating costs” as the primary motivator of their IT projects in 2003. The numbers suggest they’re in worse financial shape, and the many stakeholders they must answer to, including public shareholders and Wall Street, appear to be forcing them to watch their pennies more carefully.