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Forecast 2014: How to wring value from your IT budget

Stacy Collett | Sept. 24, 2013
According to Gartner, IT budgets will chug along with small but steady 2.9% average annual increases through 2014. But what will the top five areas of increased and decreased IT spending, and top business priorities?

To help out the 30-person IT staff, almost a quarter of the $4 million IT budget will go toward hosted systems, managed services, and consultants and consulting services.

While hosted services certainly help with staffing, Paulson has little evidence that they save money. "We're doing it for the skills and the personnel we don't have. That is what I've seen at other places, too," he says. "We're looking at augmentation — somebody to come in and help us get to where we need to be."

Indeed, IT departments that use services report that, more than saving money, the approach frees up people for mission-critical work, fills skills gaps and improves efficiency. Whether IT can better meet their goals by shifting to more managed services remains to be seen, but survey takers are certainly giving it a try.

What Will Be Cut in 2014?
With the rise in SaaS and platform as a service, it's no surprise that hardware, on-premises software and data center optimization are among the five lowest IT budget priorities for next year, according to Computerworld's 2014 Forecast Survey.

For example, the Bridgeport, Conn., public school system will replace Microsoft Office with Google Apps for Education, which is free, for all staff and students. "Students have never had email, and now [they will]," says CIO David Andrade. Moreover, they "will have their own data storage — saving space on our networks," he adds. "They can also share and collaborate on their work with this."

Rounding out the bottom five spending priorities are network services management and unified communications, such as email, videoconferencing and telephony.

First Banks, for example, will retire 140 PBX phone switches and replace them with an enterprisewide VoIP system. "Our voice costs are going to go down by probably a million bucks," says CIO Rick Nolle. "Some of it will be savings and some of it will be reinvested in other things."

The bank also plans to spend less on networking. "The WAN connection cost is an area where we keep getting more... banddwidth and services for less bottom line," says Nolle.

-- Stacy Collett

"Until now, we were more of a 'do it all — we build it all ourselves' organization," says Bharat Amin, business technology officer at BAE Systems in Arlington, Va. "Now we are putting more emphasis on 'we can't do it all.' We may have to buy things and selectively outsource, and we may have to buy services."

The lingering impact of the U.S. government's budget sequester has left the defense, aerospace and security firm's 2014 budget plan up in the air. "The general outlook for 2014 is the same as this year, maybe a slight reduction because we're not sure of the effect of sequestration," Amin says.


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