IT Budgets On The Rise; Three Percent Increase Expected In 2014
Shift Toward Innovation and Business Opportunity Still Eludes CIOs According to CEB
Nov 14, 2013
ARLINGTON, Va., Nov. 14, 2013 /PRNewswire/ -- CEB (NYSE: CEB), the leading member-based advisory company, today released findings from its 2014 IT budget and benchmark survey that indicate CIOs expect IT budgets to rise three percent from 2013 levels. While business partners want more analytic and collaboration technologies to drive greater productivity and spur innovation, CIOs have struggled to increase investments due to stubbornly high maintenance costs and mandatory spending. While 95 percent of IT leaders want to increase spending in these areas, only 10 percent have been successful at shifting their investments.
In response, other functional business leaders (i.e.: HR, R&D, Marketing, and Sales) will spend up to 40 percent more on technology initiatives on top of the official IT budget. The CEB benchmark shows that CIOs underestimate this additional business-led IT spending by up to 50 percent.
"On average, business leaders tell us they want a 20 percent increase in employee productivity to meet their goals. Unfortunately, this year's IT budget benchmark shows little growth to enable that," said Andrew Horne, managing director, CEB. "CIOs must help their organizations rethink how they allocate capital within IT and they must find new ways to identify and influence the significant number of technology spending decisions that non-IT business leaders make for themselves."
While some investment areas have stalled, the number of companies investing heavily in cloud and mobility will triple from 2012 in order to provide business partners with more flexible and responsive support to their quickly changing needs. A quarter of CIOs will spend more than four percent of their budget on SaaS cloud options to enable greater service responsibility, up threefold from 2012. Fifteen percent of IT leaders plan to spend more than four percent of their budget on mobility projects.
CEB's 2014 IT budget data is based on 165 global organizations representing $47 billion in IT spending. Other notable findings include:
- Expected capex growth for 2014 is nearly flat at 0.3 percent. The increased use of more flexible and rolling budgeting means that actual capex growth will likely be larger when measured at the end of 2014.
- European IT budgets will remain essentially flat, with only 0.1 percent expected growth.
- IT roles in 2014 will become more diverse. Roles will shift to support more business partner coordination and governance. This will include more information architects, service managers, and business architects.
- Nearly two thirds of organizations will be in the process of making the move to an end-to-end services delivery model by the end of 2014. While this increase is nearly double what it was in 2013, organizations are realizing how hard the migration is and are moving at a slower pace than many CIOs expected.
To learn more about CEB's 2014 IT budget and benchmark survey and how companies are using this information to influence investments, visit CEB Information Technology.
CEB, the leading member-based advisory company, equips more than 10,000 organizations around the globe with insights, tools and actionable solutions to transform enterprise performance. By combining advanced research and analytics with best practices from member companies, CEB helps leaders realize outsized returns by more effectively managing talent, information, customers and risk. Member companies include approximately 85% of the Fortune 500, half the Dow Jones Asian Titans, and nearly 85% of the FTSE 100. More at cebglobal.com.
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