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IT budgets on the rise

Rey R. Vicente | May 15, 2012
Improving competitiveness and controlling costs remain the major objectives of companies seeking for technologies to invest on.

Budgets Slashed

On the other hand, only 25% of survey respondents said their IT budgets will be slashed or, at best, keep IT spending tight this year to manage their bottom line. Some say they will minimize cost as there were no "must-have" technologies that will spur new investments and that major projects were already completed last year. Among those who have reduced their IT budgets this year, 14% said their spending will drop by 10% to 30% while five percent will trim their budgets by 40% to 50%. Only two percent will reduce their IT allocations by less than 10%.

Asked why their IT budget was trimmed down, Ronilo Quiat, IT manager of Ortigas & Company, replied, "the decrease in our capital expenditures for IT this year is significant because we are almost done with our SAP implementation that started in 2010."

Comparing their IT CAPEX this year with the last two years, Quiat revealed that "it is a lot smaller because of the one time payment for the SAP license and implementation costs for the past two years."

Quiat also attributed the lowering of their operating expense budget to IT manpower reduction. "I decided not to replace two IT senior staff who resigned last year because maintaining the SAP system is much simpler compared with our legacy systems."

For the 29% of the respondents who expect their budgets to remain unchanged from the previous year's, the need to adopt a more cautious strategy to counteract the uncertainties that affect the business conditions is important for managing IT costs.

Apart from this, some of their IT projects were already done and implemented the previous year as revealed by Xavier Lucas, an IT manager of Holy Cow Animation, Inc., who said, "Our major IT projects were already implemented last year. We have pending projects but this will be on a case to case basis depending on our clients' project demands."

Budget Priorities

For this year, the top IT budget priorities which survey respondents expect to receive the greatest increases are the following: security project, storage, data networking, disaster recovery/business continuity, managed network services, application/ systems integration, deployment and development of new software application, replacement of aging hardware, and network convergence.

Majority of IT managers claimed that security projects will absorb a large share of the IT budget this year. Security is a top-level issue for IT due to the increasing threat posed by computer viruses, spam and hackers alike.

To counteract the harmful aftermath that these threats may bring about, Lucas disclosed that "we are still in the process of improving our overall data security in terms of hardware and software, bringing to mind that everyday new kinds of threats are emerging so equipping a business with the best technology is a must."


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