Majority of Industries Seen Cautiously Increasing IT Spending in 2006

Large enterprises in most sectors expect single-digit increases in technology spending, Gartner benchmarking group reports

Large enterprises in most sectors expect single-digit increases in technology spending, Gartner benchmarking group reports

Stamford, CT — January 16, 2006 — Following a period of cost cutting and reactive spending, organizations with more than $1 billion in revenue will be cautious when making their information technology (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, according to Gartner. (See Table 1 below.)

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.

"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 Rubin.

Gartner's Worldwide IT Benchmark Service and The Worldwide IT Benchmark report includes five volumes of IT spending and performance data across 20 industries. This report highlights 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.

The data in the report are intended to help companies look at key cost and performance indicators by IT domain to gauge and manage organizational effectiveness and performance optimization.

Table 1

Note: Represents organizations with greater than $1 billion annual revenue.
Source: Gartner Consulting (December 2005)