CIOs to Spend 13% More on Capital Expenditure in 2006

$624 billion
Worldwide IT Services Revenue in 2005, according to Gartner, Inc.

McKinsey forecasts that IT budgets in US will grow by 3% percent on an accrual basis across industries. However, this modest increase masks reductions in overall IT operating costs from process improvements (such as streamlining mainframe operations), offshore outsourcing, and new technologies that enable companies to raise their processing capacity without buying more hardware. These savings will allow capital expenses to increase by 13%. CIOs plan to invest more in business intelligence tools to allow users to analyze customer or market trends in finer detail. (Read full McKinsey Report - free registration required)

Percentage of Respondents to McKinsey CIO Survey

Based on a McKinsey's survey in during the summer of 2005. McKinsey surveyed 77 senior IT executives from US companies with more than $1 billion in revenue. Participants were selected from various industries, with the aim of mirroring the US GDP and so capturing trends in the overall economy.

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