IT budgets globally are predicted to grow and there is a positive outlook. However according to a report just published by Datamonitor, the analyst firm. However, they are likely to be spending more with their in-house IT departments, for best value and faster communications.
"Enterprises spend over a third of their IT budgets on internal development and maintenance. This makes sense given the in-house team is usually the first choice to address an organization's IT needs," says Aphrodite Brinsmead, technology analyst at Datamonitor and author of the study. "This method is often used due to cost effectiveness and the fact that developments can be carried out faster due to the staff already being in place and having a better knowledge of the business."
The survey of 500 IT decision makers in enterprises across the US, Europe and Australia, undertaken in the first half of 2007, reveals the majority of enterprises IT budgets have increased from last year and a high proportion are expected to increase in 2008. The largest proportion of enterprise IT budgets will be spent on internal development.
Over half of the surveyed firms in retail banking, energy/utilities and financial markets indicate they will be increasing their budgets in 2008 but expenditure on hardware may begin to decrease.
Hardware has always taken up the largest proportion of enterprises' IT budgets and is still reportedly over one third in this survey. However, software and services may be gaining more traction, as the proportion of budgets spent in these areas appears to be gradually increasing. Datamonitor believes this is due to the regular updates needed by software, new investments in enterprise resource planning (ERP), customer relationship management (CRM) and business intelligence (BI) as well as a higher demand for services. This is likely to be a result of increased complexity in the IT infrastructure and vendors promoting their managed and professional service solutions effectively.
