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BI Stats: META Report on IT Trends Worldwide Reflects Cautious Note

  Industry Statistics published in DM Direct Special Report
December 3, 2002 Issue
 
  By DMReview.com Web Editorial Staff

The effects of world events and economic recession have taken a substantial toll on both business and information technology (IT). In its 2003 Worldwide IT Benchmark Report, META Group, Inc., finds that "stability" is the watchword of the year. Spending on IT has increased very slightly in 2002 and chief information officers (CIOs) are operating with limited budgets and are working to make the most of their past investments.

Although IT spending has remained relatively stable through 2001 and 2002, spending priorities have shifted. Spending for infrastructure development, hardware purchasing and security software has increased, while the biggest cutbacks have been in staffing.

The industries showing the largest negative change in IT spending since early 2001 are information technology (-22 percent), electronics (-13 percent), consumer products (-12 percent) and financial services (-10 percent).

One area that has seen significant spending increases is security software - in 2002, 69 percent of respondents spent from 0 to 5 percent of their IT budget on security and 31 percent spent 5 percent or more. In early 2001, 82 percent spent from 0 to 5 percent on security and only 18 percent spent more than 5 percent.


Figure 1: Percentage of IT Budget Dedicated to Security, 2002

Packaged solutions are being employed by more companies. Last year, 31.37 percent of portfolios, on average, consisted of packaged software. This year, 43.78 percent are in use. Metrics are also on the rise: 58 percent of U.S. companies used metrics in 2002 (compared to 51.2 percent last year) and 62 percent of non- U.S. companies used them (compared to 53.3 percent).

The number one IT priority in the U.S. is reducing costs, followed by business alignment, increased productivity, project management and improved software quality. Non- U.S. companies listed IT priorities as: increased productivity, reduced costs, business alignment, improved software process and improved software quality. Lowest priorities for companies worldwide are recruiting staff and business process reengineering (BPR).

According to the Information Technology Association of America's (ITAA) (the study can be found at http://www.itaa.org/workforce/studies/02execsumm.pdf) workforce study, U.S. companies hired a total of 2.1 million IT workers during the year while 2.6 million IT workers were dismissed. Compensation is down for the year on the order of $3,000 to $10,000 in annual salaries. Bonus awards and merit increases have typically vanished except in hot-skill areas.

Trends in work profile show an increase in both new development (up 3 percent) and package usage (2 percent) with a 3.7 percent decrease in maintenance/support. Worldwide, new development size averages 9.3 thousand lines of code (KLOCs) and productivity is about 35 KLOCs per professional per year, which is similar to last year.

The average U.S. company supports 126 KLOCs per professional, which is a considerable jump from 50 KLOCs per professional last year. Worldwide, last year's support rate was 58 KLOCs per professional and this year it jumped to 100.77 KLOCs.

The jump in workload stems from cutting staff while keeping portfolio size stable.


Figure 2: Work Breakdown for IT Professionals Worldwide, 2002

The META report found that companies are spending less time coding and more time in the earlier phases of the life cycle, which usually results in a shortened life cycle for the project. At the same time, IT work year is decreasing in length. A shorter working year (averaging 1,992 hours worked in the U.S., down from 2,151 hours in 2000) can be attributed to cost reduction measures.

The IT benchmark report analyzes IT spending by industry, drawing on survey data from 34 countries and more than 24 industry sectors. Of the 25,000 IT professionals consulted, 71 percent of respondents are from the U.S. For more information on the report, visit www.metagroup.com.

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For more information on related topics visit the following related portals...
Strategic Intelligence.

This piece has been brought to you by the DMReview.com Web Editorial staff.

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