CIOs are cutting operating budgets in order to increase capital expenditure.

Commercial and public sector CIOs plan to increase capital expenditure by 3% this year, funded in part by a 1.3% cut in operating budgets, according to research from Gartner.

Mark McDonald, group vice-president at Gartner, said economic conditions are changing CIOs' spending priorities. "CIOs felt they could no longer delay infrastructure upgrades and other capital investments, funding them at the expense of operating budgets," he said.

Overall IT spending remained flat, with budget growth projections just 1.1% this year, found the research.

However, smaller organisations are reporting stronger IT spending than their larger counterparts, said McDonald. "The larger the organisation, the tighter it is managing its IT budget, and IT operating expense in particular. This continues a trend we have observed since 2008," he added.

Industries such as utilities and healthcare are most likely to increase expenditure as they are undergoing deep structural change, while government and education industry CIOs report budget declines in the face of tight economic conditions, said the report.

Of the 500 CIOs surveyed, more than 40% said they were positive about the condition of the economy.

Source: ComputerWeekly.com