Enterprises Develop Digital Strategies, Plan to Increase IT Spending

Gartner Reports: Enterprises Develop Digital Strategies, Plan to Increase IT Spending

By David Roe (@druadh20)   Apr 10, 2013   

It's been a long time coming, but all the recent spending figures and predictions have been pointing to this. According to a recent survey by Gartner, nearly 80% of enterprises indicated an upcoming increase in IT, while more than half have a digital strategy in place to direct enterprise spending.

IT Spending, Optimism

If you've been following these kinds of reports since the beginning of the year, you would have noticed, first of all, a growing sense of optimism about the US economy, and secondly, the prospect of re-investing in their companies — something that has been on hold since the 2008 economic burn-out.

While IT was not the only area of spending that was slashed, it was one of the most debilitating for enterprises that were trying to keep abreast of their competitors who had the foresight to invest. This was linked with what appeared to be a lack of a clear strategy around IT and what enterprises should be investing in — should they go mobile, should they spend on public, or private clouds? And what about big data and analytics?

It seems that without investment not much work had been done in developing a digital strategy. That is, until recent months when the IT soothsayers of Wall Street and research institutions started noting a growing optimism reflected in predictions of significantly higher investments in IT this year, and growing investment until at least 2017.

CEO, Executive Survey

According to Gartner's CEO and Senior Executive Survey 2013, the screw has turned once again and this year will be a turning point across the entire IT industry. According to report co-author Mark Raskino,

This is the year when business leadership teams must commit to investing bravely and deeply to redevelop the technology and information capability of their firms…After more than a decade of modest investment and sorting out the basics, it's time to think ahead. Business leaders tell us they recognize the need to invest in e-commerce, mobile, cloud, social and other major technology categories, and the capabilities they enable. That can't be done from within existing IT budgets alone," he said.

The report has pulled this information from a wide range of movers and shakers across 390 medium or large enterprises, with annual revenues of US$ 250 million or more.

Conducted during November and December last year, the survey shows a business landscape that is far more favourable to investment. While political and economic uncertainties hampered investment in the past, spending on digital will be high on CEO shopping lists in the coming year. 

Fifty two percent of those that responded to the survey say they now have a digital strategy, with 78% now able to plan their 2013 and 2014 IT spending for the next year.

IT Spending, Human Resources

An interesting parallel move here will be to change the human mix as investment takes place. Many have announced that they intend to change the mix of leadership talent needed to spearhead the IT drive. The survey shows that 19% of business leaders expect to see a chief digital officer by 2014, and 17% expect to see a chief data officer.

CIOs should embrace growing digital, data and innovation needs, and not stand back from them…CIOs who intend to stay with their firms for longer than two years should be developing digital business, business information governance and innovation leadership capabilities in themselves and in their teams…" Jorge Lopez, the other report author said.

Possible Problems

While all this is very encouraging and signs of this reprise are across all areas of the economy, for IT, there are still some worrying figures here that could overturn the cart again.

Not least of this is the budget statement from US President Barak Obama today — two days after it was due to arrive. While this has no direct impact on IT spending, the last time there was a row over finance – notably the fiscal cliff row earlier in the year — the US and global economy took a dive, however temporary, hitting spending figures again.

The other obvious issue here is contained in the figures. If 52% of enterprises have a digital strategy, then the flip side of this is that 48% don't have one at all, or have a strategy that is still immature. In either case, it too spells trouble.

That said, this is the most positive statement of growth in recent years and is likely to provide some kind of relief to vendors that are struggling to get their products in the enterprise door.
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