IT spending in 2010 will be flat, but CIOs will be preparing for a recovery, according to the CIO Executive Board, which based its predictions on a survey of nearly 200 large companies. Though spending will be flat for the second consecutive year, 87 percent of CIOs surveyed are "cautiously" preparing for recovery. Forty-nine percent are drawing up strategies to handle increased project demand when recovery occurs. Among the IT cuts made in 2009: discretionary spending was reduced from 24 percent of the total IT budget in 2008 to 20 percent in 2009 and the the number of contractors was reduced by 12 percent. As well, "26 percent of organizations proactively lowered end-to-end availability commitments for mission critical applications in 2009," according to the report.

The biggest increase in 2009 IT spending was maintenance, which grew from 58 percent to 66 percent in 2009. Twenty-two percent of IT spending was on unified communications, 10 on desktop virtualization, and a (perhaps surprising) 9 percent was spent on iPhones.

“Although talk of an economic recovery is gathering steam, organizations are taking a ‘wait and see’ approach to increasing IT investment,” CIO Executive Board Executive Director Shvetank Shah said. “This means a second straight year of flat budgets, but it doesn’t mean that IT organizations will spend 2010 looking inward.”

Among CIOs’ biggest concerns are readying IT for a “fast, flexible response to recovery,” bettering the customer experience, harnessing unstructured information and developing social media strategies.

“They’ll continue to focus on containing costs to hedge against further economic uncertainty, but CIOs will also be looking to quickly reposition as the situation changes and use new analytics and social media capabilities to better understand and serve their customers and drive productivity internally,” Shah said.

By Mark Alvarez