Big spenders lash out $17,500 per employee on IT

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Leading-edge adopters of technology spend an average of 11% of revenue on IT – an average of $17,500 per employee. Mainstream adopters of technology spend an average of 5%, or $21,000 per employee. Conservative adopters of technology spend an average of 3%, or $11,000 per employee.

In 2001, enterprises plan to allocate an average of 3.61% of revenue for IT budgets, which eclipses the 2.9% level reported from the 1998 Gartner survey. That dramatic change corroborates Gartner’s analysis and forecast that by 2005, the typical North American enterprise will spend 10% of revenue on IT.

“If a conservative adopter of technology is to become a mainstream adopter, it must increase IT spending by at least 160%,” said Kurt Potter, a research director in Gartner. “Furthermore, if an enterprise plans to move from being a mainstream adopter of technology to a leading-edge adopter, it will have to spend 220% more.”

The 2000 Gartner IT Spending and Staffing Survey canvassed 510 enterprises worldwide, with an enterprise average of $1.6 billion in revenue and 6,200 employees.

“Many corporate leaders are having a difficult time planning for IT spending because the business model that is supported by current IT spending levels will not exist in three years” says Potter.

Compared to other industries, IT industry vendors are devoting a higher percentage of their IT budgets to e-business, with 28% projected for 2001. Property and casualty insurance rank next with 23%, followed by pharmaceutical and retail enterprises, with 21%.

Gartner helps more than 10,000 organizations identify and maximize technology market opportunities. Gartner’s technology content reaches IT professionals through Gartner Research, its research and advisory unit; Gartner Services, its custom consulting unit; Gartner Events and www.gartner.com. Founded in 1979 and headquartered in Stamford, Connecticut, the company had revenues of $734 million last year. Its 3,600 associates, including 1,200 research analysts and consultants, are in more than 80 locations worldwide.

Gartner

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