Businesses increase IT spending at fastest rate for eight years, say IT leaders

IT spending is up, but role of CIOs under threat as companies appoint chief digital officers

Organisations are increasing their investment in technology more quickly than any time since 2006 as confidence returns in the economy, a major survey of IT leaders has revealed.

Businesses are stepping up their spending on digital technology, innovation-led projects and customer-focused technology, according to a survey of more than 3,000 CIOs and technology leaders across 30 countries.

The Harvey Nash CIO survey revealed that 46% of CIOs and technology leaders saw their IT budgets increase over the past 12 months – the highest level of growth for eight years.

“CIOs and technology leaders are seeing growing budgets and growing prominence in their organisations as CEOs are turning to technology to drive growth,” said Jonathon Mitchell, chairman of Harvey Nash’s global CIO practice.

Making the trains run on time

The survey shows that after five years of cost cutting, CIOs' number one priority has shifted to providing their business with an efficient IT service.

Two-thirds of IT leaders are prioritising projects that make money for the business in an indication that more companies are focusing on investment in IT for growth rather than to save money.

Outsourcing more popular

CIOs are increasing their spending on IT outsourcing, the survey showed. 

Almost half expect their dependence on outsourcing partners to increase over the next 12 months, while 49% anticipate spending more of their IT budget on outsourcing.

The two most popular candidates for outsourcing are software development and datacentres, while the proportion of CIOs looking to outsource their IT helpdesks has risen significantly.

And more CIOs are more optimistic that their IT budgets will continue to grow than at any time since the survey began in 2005, with some 44% expecting more budget increases next year, the research revealed.

Influence of CIOs is increasing, but marketing winning digital war

The participation of CIOs on the board of directors has also increased significantly since the start of the recession with many more IT leaders in a position to better influence other business leaders.

But, when it comes to digital technology, the marketing department is winning the battle against the IT department to drive technology strategy in their organisations.

Four in 10 CIOs said the marketing department is now responsible for digital technology, up 7% from 2013.

Only one in 10 CIOs said IT is responsible for digital, down 2% from last year.

The rise of the chief digital officer

At the same time, CIOs are under assault from newly established chief digital officers (CDOs), who are vying with CIOs to take responsibility for digital technology.

Some 7% of CIOs said their organisations now employ CDOs. This increases to 16% for larger organisations with IT budgets of $100m.

More than half of CDOs report directly to the chief executive in companies with IT budgets of $100m or more.  

But CIOs can take comfort,that more CDOs report to the CIO than to the chief marketing officer in smaller companies.

No time to innovate

The survey shows that CIOs see greater potential for using technology to drive innovation than ever before, but many are struggling to make it a reality.

More than two-thirds of CIOs admit they invest too little personal time, and the time and resources of their departments, into innovative projects.

But where CIOs are investing in innovation, they are prioritising projects in mobile, cloud, collaboration, big data and social media, the survey found.

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