SIM's 2008 Survey: Organizations are looking to IT for help, not cuts

On Monday, the Society for Information Management (SIM) released the results of its 2008 IT Trends Survey and it contained a generally upbeat forecast for IT in 2009, although the survey was conducted in June, before the global economic meltdown.

In Orlando at its annual SIMposium conference, SIM revealed that IT budgets and headcount are holding steady and that many organizations are using IT to drive efficiencies, streamline operations, and cut costs, rather than just slashing the IT budget to save money during the downturn.

"The [2008] SIM Survey provides important insights demonstrating that the overall state of IT remains very strong," said Jerry Luftman, SIM vice president of academic affairs and a professor at the Stevens Institute of Technology.

Chart 1 below shows that IT budgets (as a percentage of revenue) are increasing. That means that while revenue may be decreasing in some cases, if companies are cutting costs to compensate then not as many of them are making cuts in IT. It can also mean that those companies who are investing more in IT are also benefiting from greater revenue.

Chart 1

As seen in Chart 2, 44% of respondents were planning to increase their  IT budgets in 2009 (although the situation may have changed since the economic tumult in September/October).

Chart 2

There was a slight drop in the number of companies that plan to increase their 2009 IT budget, as you can see in Chart 3. But with the challenges facing the economy, IT budgets remaining flat would be a big victory. So if you look at charts one, two, and three, Luftman said there's only one conclusion: "Companies are investing more in IT. It's as simple as that."

Chart 3

Of course, much of the concern around budget cuts is actually a fear of layoffs. Chart 4 shows that 43% of companies surveyed were projecting increased headcount for 2009 and 42% were planning to maintain the same headcount. Chart 5 shows that the 43% projection for 2009 was actually an increase over 2008 and compares favorably to recent years. Again, this was taken in June, so the number is likely to have dropped, but fact that the number was strong as it was in June (when there was still a lot of economic uncertainty) means that it's unlikely for there to be a precipitous drop in the IT labor market.

Chart 4

Chart 5

Luftman said, "[Companies] are not cutting IT, that's the important message... Companies are looking at IT as a lever to cut costs in other parts of the business... Here is IT's chance to shine. Here's their chance to make lemonade out of lemons."