Large Sized Enterprises in Most Industries Expect Single-Digit Increase in IT Spending
STAMFORD, Conn., January 4, 2006 – Following a period of cost cutting and reactive spending, organizations with more than $1 billion in revenue will be cautious when making their IT spending decisions in 2006, according to Gartner Consulting’s Worldwide IT Benchmark Service.
In 2006, the most significant difference in spending will be in the consumer products industry, with IT spending increasing 7.9 percent in 2006, up from flat growth in 2005 (see Table 1). Although IT spending in the electronics and insurance industries is expected to be 7.8 percent and 6.5 percent, respectively, this actually represents a decline from 2005, when IT spending in those industries increased 8.3 percent and 7.7 percent respectively. The professional services industry will see the biggest decline in IT spending in 2006, as spending is expected to decline 1.7 percent, down from 10.1 percent in 2005.
Gartner’s Worldwide IT Benchmark Service and The Worldwide IT Benchmark report includes five volumes of comprehensive IT spending and performance data across 20 industries. This report highlights comprehensive IT spending plans of more than 1,500 companies with more than $1 billion in revenue, combined with historical spending and performance data on more than 10,000 companies worldwide. This allows companies to look at key cost and performance indicators by IT domain to gauge and manage organizational effectiveness and performance optimization.
“While we are seeing all organizations moving away from reactive IT spending and toward improved agility and long-term strategic support at a macro scale, there are a number of different trends that are specific to each industry, geography and organization size,” said Howard Rubin, an associate with Gartner Consulting.
“No single measure or investment can help an organization support the growth and direction of its business, but organizations that develop ongoing strategic performance management programs that allow them to manage their performance and track their competitive environment will be first in managing business growth, strategy and operations effectively,” said Mr. Rubin.
| Industry | Spending Change (%) – 2004-2005 | Spending Change (%) – 2005-2006 |
|---|---|---|
| Consumer Products | 0.0 | 7.9 |
| Electronics | 8.3 | 7.8 |
| Insurance | 7.7 | 6.5 |
| Chemicals | -0.2 | 5.1 |
| Construction and Engineering | 0.0 | 4.9 |
| Information Technology | 2.3 | 4.7 |
| Healthcare | 8.9 | 4.6 |
| Education | 6.0 | 4.1 |
| Energy | -2.9 | 3.9 |
| Pharmaceuticals | 5.6 | 3.3 |
| Utilities | -0.6 | 3.1 |
| Banking and Financial Services | 7.1 | 3.1 |
| Media | 2.8 | 2.9 |
| Government | 5.0 | 2.4 |
| Food/Beverage Processing | 6.0 | 1.3 |
| Manufacturing | -1.3 | 1.2 |
| Telecommunications | 0.2 | 0.0 |
| Metals/Natural Resources | 0.8 | 0.0 |
| Hospitality and Travel | 0.0 | 0.0 |
| Transportation | -1.4 | -0.2 |
| Professional Services | 10.1 | -1.7 |
| Retail | -0.1 | -4.9 |
Gartner’s Worldwide IT Benchmark Service is a real-time, comprehensive data resource designed to provide key cost and performance indicators by IT domain and focused high-level comparisons of companies. Gartner’s Worldwide IT Benchmark Service surveys companies from more than 30 countries in more than 20 industry sectors. Please click here for more information on Worldwide IT Benchmark Research.
About Gartner:
Gartner, Inc. (NYSE: IT) is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 9,000 clients, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company’s businesses consist of Research and Events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customized engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has more than 3,900 associates, including more than 1,200 research analysts and consultants, in more than 75 countries worldwide. For more information, visit http://www.gartner.com.
