IT budgets to rise in 2013 despite downturn

IT budgets will grow by 2% next year in Europe, a study of 180 companies with an IT spending power of $52bn reveals.

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CIOs across Europe are predicting their IT budgets will increase by an average of 2% in 2013, despite the downturn.

But investment on capital projects will slow, as operational spending assumes higher proportion of the IT budget, research by business advisory firm CEB reveals.

The findings are a reflection that IT departments have caught up with  IT projects temporarily put on hold at the start of the recession, said Andrew Horne, managing director of CEB, formerly the Corporate Executive Board.


CIOs will use 2013 to invest in high-return projects to improve employee productivity, collaboration and mobility, the survey of 180 companies with combined IT budgets of $52 billion shows.

“CIOs recognise that the nature of work is changing and in this new environment there is a huge opportunity for IT to drive employee productivity,” said Horne.

IT departments are moving away from traditional process automation projects towards more strategic business intelligence, collaboration and customer-facing technologies,.

The top 20% of organisations, measured by IT spending, plan to devote 66% of their IT budgets to information management and collaboration projects, the research reveals.

End-to-end services

At the same time, more IT departments are shifting their focus from providing end-to end services to the business rather than point IT solutions..

Among those companies that already offer end-to-end IT services, some 75% plan to devote as much as 30% of their operational IT spending on the end-to-end model.

The trend is leading to the development of new IT roles as IT organisations appoint service managers and user experience designers to liaise with internal customers in the organisation.

“These investments suggest that the days of IT project queues filled with process automation are over. The best companies are laser-focussed on equipping employees with the tools they need to more effectively contribute to the bottom line,” said Horne.

Cloud computing

The survey reveals that 54% of IT organisations plan to increase their spending on public cloud services in 2013 in a drive to make the IT department more flexible and efficient.

Spending on cloud computing will rise from 5% to 7% of the IT budget in 2013.

Software-as-a-service will account for the greatest spending, followed by infrastructure-as-a-service. Platform-as-a-service is a small, but increasing part of companies’ cloud portfolio.


Some 75% of IT organisations plan to invest in developing mobile applications next year, reflecting the growing interest in companies giving their employees access to work-based systems on the move.

the days of IT project queues filled with process automation are over

Andrew Horne, md of CEB

Spending on mobile application development will grow by 50% to nearly 2% of total IT expenditure.

The true figure is likely to be higher, as it does not include spending by marketing departments on social media projects without the IT department’s involvement.

Maintenance spending still high

Despite the efforts by CIOs to free-up cash for innovation, mandatory spending and maintenance work still makes up most of the IT budget.

On average, more than two thirds of IT spending is allocated to maintenance and mandatory spending.

CIOs will need to work hard to find to prioritise the demands of their business next year, given the relatively modest rise in spending, said Horne.

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