Goldman Sachs: IT faces monthly budget reviews

Half of all senior IT managers in the world's largest companies are re-examining their budgets at least once every 30 days,...

Half of all senior IT managers in the world's largest companies are re-examining their budgets at least once every 30 days, according to the latest quarterly survey of IT spending by US finance house Goldman Sachs.

"More frequent evaluation of budgets suggests that companies are in a better position than before to adjust spending levels - whether for better or for worse - in reaction to changes in the environment," the report said.

Some 21% of IT managers are reviewing budgets quarterly with a further 23% saying they reassess budgets "as business conditions change".

Goldman Sachs questioned 100 US-based IT directors from the top 1,000 global corporations, but Martha Bennett, vice president of Giga Information Group, said the findings mirrored what was happening in the UK and Europe.

"You can't make changes to long-term IT projects on a monthly basis, but monthly reviews are prudent management," said Bennett. "They are in line with most organisation's budget and board meetings and help you avoid nasty surprises and react quickly to events."

She highlighted a growing trend of IT directors holding budgets that they are not allowed to spend fully and noted the demise of the end-of-year rush to spend up to budget limits. IT directors now get kudos with the board for giving back money to the business, she said.

The Goldman Sachs survey revealed no signs of an upturn in corporate IT spending in 2003, with security software and wireless LAN projects remaining the top priority for managers. For the first time, VPN debuts as a category separate from security.

David Roberts, chief executive of the UK Corporate IT Forum, said this mirrored priorities among UK blue-chip companies. He also suggested that IT departments could face legislation, related to security and data protection, which might make an increased call on IT budgets.

The survey found Linux has been deployed by 53% of respondents, a significant increase from the 39% of participants who were planning to increase Linux deployments in Glodman Sachs' survey last October.

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