Stats Watch: Talking money

Perhaps talk of tighter IT budgets is just that: talk, designed to placate nervous directors and shareholders. Analysts seem to be in agreement that New Zealand firms are walking in step with overseas corporates in maintaining or even increasing IT budgets over the next year or two.

Perhaps talk of tighter IT budgets is just that: talk, designed to placate nervous directors and shareholders. Analysts seem to be in agreement that New Zealand firms are walking in step with overseas corporates in maintaining or even increasing IT budgets over the next year or two.

In the "Forecast for Management" it has been running since 1996, research firm IDC found that IS budgets in New Zealand are expected to increase 2% this year, 3% next year, and about 3% the year after.

In June Gartner said 37% of New Zealand respondents saw themselves increasing their IT budgets this year, about the same percentage maintaining current levels of spending.

And Fairfax Business Research's survey of Kiwi firms done early this year, while finding that the average IT spend in 2003 will drop slightly across all respondents, will increase by nearly $2.5 million in the largest firms (see graph).

The findings tally with the US: less that a quarter of CIOs stateside surveyed by Morgan Stanley expect their budgets to shrink, though they're more down in the mouth about their economy, 95% picking a recovery some time next year rather than this.

Taking into consideration the relatively small number of respondents (59) in the Fairfax study here, on average organisations expect to continue to spend about $1.5 million a year on IT. IDC breaks the budget pie down into organisations spending the same on hardware in the next 24 months as now but slightly more on software. Slight spending drops are expected in networks and maintenance, but slight increases in line costs and training. IT managers figure they will need to spend a couple of percent less on internal staff, though that is likely to be absorbed by an expected slight jump in payments for external staff.

Budget forecasts to Broatch.

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