According to a recent report by Gartner Worldwide and the Property Casualty Insurers Association of America (PCI), information technology (IT) spending is expected to wane through 2009.
Thirty PCI member companies took part in the third annual joint IT spending survey. "The participating companies averaged $691 million in revenue and 1,116 employees," said Scott Joyner, vice president, information technology, PCI.
The survey pointed to a planned IT spending increase from 2007 to 2008 of 8.1 percent, while the planned increase from 2008 to 2009 is 1.9 percent. Both represent a drop from the 11-percent boost for the 2005/2006 year. The slowdown in spending is likely the result of a decline in revenue growth. Revenues for these companies increased an average of 5.1 percent from 2005 to 2006, and just 1 percent from 2006 to 2007. As a percentage of previous year's revenue, IT spending was 3.6 percent in 2008 and 3.0 percent in 2007, indicating that IT spending still outpaced the change in revenue.
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