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Hackett Research Insight: Key Issues Study Finds Return To Moderate Growth In Budgets And Staff For 2012, With Some Caveats

CIOs can expect to see a return to moderate growth in IT budgets and staff for 2012, according to a new IT key issues study from The Hackett Group, Inc. (NASDAQ: HCKT). But, the study also offers significant caveats, given the dramatically increased business volatility that shows no signs of changing.

The Hackett Group's new Research Insight "2012 IT Key Issues: Coming to Terms with the 'New Normal'", finds that companies may see some breathing room in IT budgets and staffing in 2012. After several years of stagnant or negative growth, most companies are now projecting a 3-4 percent increase in IT budgets and staffing for this year, which can be seen as acknowledgement that IT is critical if companies are to execute on their aggressive growth plans. However these planned increases could disappear quickly if revenue growth expectations fall short. The Hackett Group recommends that CIOs develop contingency plans for cutbacks should they be required.

This will be a trying year for IT. For 2012, CIOs are acknowledging that the "New Normal" has been largely accepted as the status quo, or the "Now Normal." For most companies, this means that 2012 will require them to carefully balance the search for new revenue with a focus on emerging markets while they preserve margins amid continued high volatility. Many companies are expecting as much as 25 percent volatility in key areas such as input prices, customer demand, and available talent. This has the potential to drive extreme swings in business projections, which IT must be able to accommodate.

IT leaders are positioning their organizations in 2012 to enable their business partners to increase revenues in emerging markets and improve margins in established markets. Success is heavily predicated on IT delivering the right business services at a global scale and providing the right information for rapid decision making. IT organizations are driving a more traditionalist agenda -- focusing on improving alignment with the business and reducing technology complexity -- while slowing the adoption of emergent topics such as cloud computing as they respond to the pressing needs of globalization and enterprise information requirements.

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