IT budgets lag behind business growth

Organisations are not increasing their IT investment at the same rate the business is growing, according to a study by Gartner.

But IT budgets are also harder hit and more negatively affected by a fall in company revenue, Gartner found.

The analysis of nearly 900 companies worldwide compared actual and planned IT spending patterns against revenue during the past three years.

It found that even in organisations with sales growth of 10 per cent the IT budget increases remained at five per cent or less.

Jed Rubin, director of consulting at Gartner, said in a statement: "This analysis confirms that organisations are not increasing their investment in IT at the same rate as the business is growing. The results also show the extent by which IT investment is reduced within organisations experiencing revenue decline."

Gartner found that in organisations where IT spending is more closely aligned to revenue growth or decline, it is a result of greater communication between the CIO and other leaders in the business and more frequent budget review cycles.