January 20, 2010 – Following a year of significant cuts, IT budgets are expected to stay flat in 2010, giving CIOs the same level of resources they had in 2005, according to Gartner’s 2010 CIO survey.

An 8.1 percent budget decline in 2009 wiped away nearly four years of increases and raises questions about whether recovery projections will overcome last year’s steep cuts, according to the report, "Leading in Times of Transition: The 2010 CIO Agenda."

Though the status of IT budgets is uncertain, some of the challenges presented in 2009 should begin to dissipate. Instances of delayed spending paired with increased demand for services and reduced resources should ease as the economy transitions to recovery, according to commentary from Mark McDonald, group vice president and head of research for Gartner EXP.

“CIOs see 2010 as an opportunity to accelerate IT’s transition from a support function to strategic contributor focused on innovation and competitive advantage,” McDonald said, assessing the survey responses from 1,586 CIOs. “They have aspired to this shift for years, but economic, strategic and technological changes have only recently made it feasible.”

A reprioritization of key IT projects is expected in 2010 as business leaders shift from cost to revenue, impacting IT project portfolios in turn. Mark Raskino, research vice president and Gartner fellow, described this as a shift away from the “low-hanging fruit” of cost-cutting.

“Business leaders are gasping for growth after a long period holding their breath, and they are expecting to increase the importance of IT in their post-recession approach. It is critical that CIOs review business leaders’ rapidly changing tactical business priorities and often unstated new expectations of where IT can help as the economy turns,” Raskino said in December about IT priorities.

The new report illustrates market stability with economic change and continued business priorities focusing on process improvement, cost reduction and analytics.

CIO’s technology priorities, on the other hand, put lighter-weight technologies in a position of increased importance, ranking virtualization, cloud computing and Web 2.0 technologies at the top.

Services-based and social media technologies provide the cost, capacity and capability gains required to define, source, create and deploy information- and process-intensive solutions, according to Gartner analysts. Additionally, they can be deployed quickly with little expense upfront.

“These technologies, implemented properly, create the opportunity for IT to change its role and the operational performance of the enterprise,” said McDonald. “Asymmetric technologies like virtualization, cloud and Web 2.0 enable companies to get out from under a front-loaded heavy investment model that limits IT’s agility and flexibility.”

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