2008 Spend on IT for IT to Jump 9.3 Percent

With theU.S. either in, or almost in, a recession, it?s no surprise that most companiesare expected to spend this year only about 5 percent more than they did lastyear on information technology, according to various analysts? estimates. Butwhat about IT organizations?how much are they planning to invest on ITmanagement software this year?

Surprisingly,although IT groups are not exactly ready to spend like bands of drunkensailors, they plan to boost spending on software to manage IT functions by anaverage of 9.3 percent more than in 2007, according to a January report by AMR Research. ?We are going to startseeing more investment in automation to transform IT processes,? predictsDennis Gaughan, research director at AMR Research in Boston.

Thesurvey, which focused not on the overall IT budget, but specifically onsoftware, hardware and services for IT governance, management, operations, anddevelopment, polled 405 respondents in IT management worldwide. Taken as awhole, those responding said they typically spend one-third of their IT budgeton IT for IT.

?Theseare the tools and the technologies IT needs to spend on to run theorganization,? Gaughan explains. ?These are IT management?s plans forspending.?

Toppingthe list of priorities for IT buyers is improving security and compliance, with49 percent of organizations in the U.S. listing IT security as ?one oftheir top two IT business process priorities? for 2008.

?ITorganizations need to think about risk more strategically than in the past,?Gaughan observes. ?Much of the emphasis on security spending is being driven bythe increase in regulations, requiring companies to do more to protect customerinformation and guard against the kinds of highly publicized data breaches thathave occurred.?

What?smore, the heightened sense of concern over security of customer files and othersensitive data has caused greater organization-wide scrutiny over the ITorganization?s information security programs. ?This has become a boardroomtopic,? Gaughan adds. ?CIOs now see it as something affecting the entire ITorganization, not just the security staff.?

The otherarea poised for growth is systems to help automate companies? adherence to thewidely adopted ITIL standards for improving IT internal processes. Companiestypically use the Information Technology Infrastructure Library (ITIL) todefine the scale and scope of standardized work processes for systemsoperations. ITIL establishes a common basis for the way IT projects areundertaken and managed. 

Manylarge IT organizations, such as General Motors and General Electric, eitherhave already embraced ITIL, or are working to make parts of the framework ofstandards their own as a means to help improve IT processes. ?Based onconversations with out customers, I?d say about half are adopting ITIL or arein the planning stages,? Gaughan says. ?And now we are starting to see ITIL inmore midsize corporations as well.?

?ITIL hasbeen around for a number of years, but lately we have seen a broad culture andchange in the way IT is managed as more IT organizations are moving to ITIL tohelp them redefine their processes,? Gaughan points out. ?We are going to startseeing more investment in automation that helps enable the transformation of ITprocesses.?

Thesurvey results bear this out, as IT operations management was the second mostfrequently cited priority for IT groups? investment in 2008, with 35 percent ofU.S. IT organizations citing it as one of the top two business priorities.Gaughan says the prime driver behind this emphasis on improving IT operationsis cost controls. Exactly 50 percent of respondents worldwide citedinfrastructure management as one of the top three most labor intensive ITactivities?more than any other IT activity citied.  

AMR is so bullish on IT management software, in fact, that the researchfirm has coined a term, ?IT Resource Planning,? to cover what is fast becominga suite of IT management software applications. Leading vendors in thisemerging market, Gaughan says, include BMC, Computer Associates, HewlettPackard, and IBM.

A typicalsoftware package that Gaughan says IT groups are likely to invest in this yearis the configuration management database (CMDB). ?This is a system to captureinformation about the various IT assets, including software, servers, andnetwork devices,? Gaughan says. ?The idea is that a network manager can use theCMDB to look at, say, a router that is down and see exactly how it impacts therest of the IT operations. It?s a system of record for the entire ITinfrastructure.?

Other areas likely to see increased IT spendingare systems to manage service-oriented architecture, vendors, and IT investmentitself. ?One of CIOs? primary areas of concern is how to get better visibilityof their spending,? Gaughan says. ?They want a better understanding of wheretheir money is going.?