While the economic downturn is not causing wholesale changes in IT budgets, it is shifting spending toward projects that can provide quick, demonstrable returns on investment.

A February 2009 study conducted by Silver Spring, Md.-based AIIM finds trepidation about the economy at large offset by a commitment to spending on information technology deemed essential to the organization.

Indeed, pessimism about the economy was abundant, with only 34% of respondents predicting that the downturn would abate in 2009. Although this feeling was widespread, the numbers did reveal that the tendency to be pessimistic grew along with the size of the company queried.

While more than half of respondents (53%) said the downturn would result in no change in their IT budgets, 69% agreed that capital requests are much more difficult to get approved than last year, and that only projects that demonstrate positive, hard dollar returns are getting the nod. Moreover, 41% said the acceptable length of time to implement a project has been significantly cut.

As a corollary, the survey revealed that the projects that are perceived as "not central to the business" have the greatest chance of being axed. Respondents cited spending on desktop PCs and workstations as the most likely to see a decrease in funding, followed by mobility initiatives.

Also vulnerable to the downturn is headcount, with 47% of respondents saying that spending in the area has decreased in recent months, and 12% saying it had decreased significantly.

Surprisingly, two trends widely seen as making inroads into cash-constrained data centers, Software-as-a-Service (SaaS) and open source software, received only lukewarm receptions from respondents. While 42% said the economy has made open source solutions more attractive to their organizations, only 33% said the same about SaaS.

Also ominous for vendors, 42% of respondents said they were actively seeking to reduce the number of technology solutions providers from whom they buy.

(c) 2009 Insurance Networking News and SourceMedia, Inc. All Rights Reserved.

Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access