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Forrester on IT Spending

Posted on 11.12.2009

According to the latest Enterprise IT Services Survey by Forrester Research, Inc. (Nasdaq: FORR), IT contractors and consultants will see the deepest decreases in spending, while systems integration and outsourcing services will have the most increases.

Unlike during the last recession from 2001 to 2002, when outsourcing and offshoring experienced growth from firms seeking to reduce internal IT costs, the picture for IT services is much more mixed in terms of spending plans. 30 percent of executives surveyed said they plan to increase spending on systems integration and project work, 26 percent plan increases in applications outsourcing, and 25 percent expect to increase spending on infrastructure outsourcing. However, 41 percent of executives expect to reduce spending on contractors, and 34 percent foresee lower spending on IT consulting.

“As the global economic downturn puts pressure on IT services spending, firms are taking a range of actions to deal with the cuts,” said John McCarthy, vice president and principal analyst at Forrester. “The pressure to reduce IT spending is going to continue well into 2010. The data shows no quick turnaround — it’s going to be a tough year for services firms as clients increasingly ask them to justify the ROI for IT projects and provide more value for a lower price.”


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