European CIOs have budget balancing act ahead of them

Many European technology leaders are expecting to increase IT spending through 2018 and investments will be directed to a range of key areas, including data management, technology infrastructure and regulatory compliance.

That is the conclusion of ComputerWeekly/TechTarget IT Priorities survey, which questioned 1,875 European technology decision makers on their buying decisions for 2018.

While most CIOs expected their IT budgets to rise this year, there is less consensus about how that money will be spent, with some IT chiefs envisioning a reduced rate of investment in certain technologies. Experts suggest this reduced rate of increases could be due to the broad range of priorities faced by modern CIOs and a continued focus on operational concerns.

Just over a quarter (28%) of European IT leaders responding to the survey expected their budgets to increase by more than 10% this year, which represented a 25% year-on-year rise. In addition, 23% expected their IT budgets to increase by between 5% and 10%, and 9% anticipated a rise of below 5%.

European IT leaders said they expected to increase their spending in a range of areas in 2018, including big data (28%), IT automation (22%), compliance (21%) and customer relationship management (21%). Other key areas of investment include hybrid IT, network upgrades, mobility, internet of things (IoT) and datacentre consolidation.

Yet while the rise in technology spending is encouraging, the level of investment increase across these areas is expected to be lower than in 2017.

In the case of mobility, year-on-year increases in IT spending are expected to fall by as much as 28%. Similar drops can be seen in IT automation (27%), IoT (24%) and network upgrades (24%).

Digital advisor Andrew Marks, who is former CIO of Tullow Oil, suggested the reduction in year-on-year spending increases highlights how European IT leaders face a disparate range of priorities. While an investment in advanced technologies might be tempting, too many technology chiefs are still hamstrung by a commitment to keep the lights on.

“These trends reflect the reality that day-to-day IT leadership accountability is focused on running systems and services rather than spending on innovation,” he said. “Is that a good thing or a bad thing? It’s hard to say, as CIOs must invest in a range of areas. However, the research does suggest operational concerns are still what matters most for many organisations.”

Marks’ assertions are backed up by a drill down into country-by-country spending levels. The broad span of business requirements means European IT leaders face downwards pressure on their general technology investments. However, TechTarget research highlighted how IT leaders in individual nations are committed to year-on-year increases in the rate of investment in several key systems and services.

In the UK, IT decision makers expected year-on-year spending increases in the following areas: hybrid IT (52%), unified communications (51%), software-defined datacentres (35%) and datacentre consolidation (17%).

In France, CIOs are focused on big data (18%), network upgrades (16%) and compliance (15%). In Germany, budget rises are being directed towards software-defined datacentres (23%), customer relationship management (14%) and compliance (6%).

IT leaders, therefore, are focused on various flavours of information management. The General Data Protection Regulation (GPDR) deadline looms large for European CIOs. Marks said the focus on compliance in France and Germany, and the supporting focus on storage, data and networks in all nations, demonstrated a preparedness on behalf of European IT leaders to get their systems and services in order before the full force of the regulation hits in May 2018.

“GDPR is clearly a priority. There’s also evidence of continued investment in the underlying technology infrastructure, whether hardware or software-defined,” he said. “This rise in investment could be evidence of an exploitation of legacy datacentre investment, before migration to fully cloud-based and as-service models in the future.”