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The Outlook for 2013 IT Budgets

Posted on  27 September 12  by 

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What is the outlook for IT budgets in 2013?

The 2013 budget benchmark numbers are in. On average, CIOs expect total IT budgets to increase by 1.8%. Operational expenditure will rise, and  capital expenditure stays flat, but beneath these seemingly stable numbers, CIOs are pushing forward with efforts to transform IT. They are reallocating resources to capture value from collaboration, insight, and mobility; and building a service-based, and increasingly externalized and collaborative delivery model. 

The analysis is based on 2013 budget plans from approximately 200 companies globally, representing $52 billion in IT spending. The survey indicates six 2013 spending decisions that will contribute to a reshaping of IT. Many of these changes align with the shifts in IT value, ownership, and role that we described in the Future of Corporate IT.

1. Information and Collaboration Projects Grow - In 2013, project portfolios will include proportionately less investment in process automation and more in information management and collaboration. For the third year running, information management and collaboration represents the largest project category, accounting for 32% of IT project budgets, compared to 30% for process automation. However, some companies plan to go much further. The top 20% of organizations in terms of spending on information management and collaboration expect to devote 66% of their 2013 project budgets to this category.

2. Mobility for Applications - Spending on mobile applications development will grow by 50% in 2013 to nearly 2% of total IT spend. The figure is only part of a broader trend in mobile spending, as it excludes spending on mobile devices, as well as the money marketing teams spend on mobile and social media projects without involvement from IT.

3. The Outlook is Cloudy - Fifty-four percent of organizations plan to increase spending in the public cloud next year. On average, cloud spending will account for 7% of total IT budgets. Software-as-a-Service (SaaS), takes the largest share but spending on Infrastructure-as-a-Service (IaaS) is catching up fast.

4. End-to-End IT Services Reach Scale - Since 2010, we have seen growing interest in end-to-end IT services, but many organizations experimented with the model, rather than implement it wholesale. This tentative stance is changing. By the end of 2013, the majority expect to offer at least some end-to-end IT services. And at roughly two thirds of those organizations, services will account for more than 30% of the IT operating budget.

5. New IT Roles Emerge - Service management requires new roles. Seventy-eight percent of IT organizations already have or plan to create service managers; and 59% are creating service architects. We see a similar pattern occur as organizations invest in information management and collaboration. Eighty-four percent have or plan to have information architects, and 52% will have user experience designers.

6. IT Outside IT - The survey shows that IT employees will account for a smaller percentage of total employees. The survey didn’t find an increase in outsourcing, which suggests that IT is becoming more productive, and that more IT is being done, formally or informally, within the company but outside IT function.

For more analysis of these and other findings, CEB members can join our budget benchmark webinar October 11.

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