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IT budgets to jump 2 percent, still not enough, says Gartner

Patrick Thibodeau | Oct. 6, 2015
Digital-based revenue to grow over the next five years.

Businessman attracts money with a large magnet 164176162

IT budgets globally are due to grow by 2.2% next year, the largest jump in the last five years, according to Gartner's survey of nearly 3,000 CIOs globally. In the North America, the projection is 2.3%.

The budgets of IT departments have been flat to negative for the last five years, according to Gartner's data. This persists despite the ever-increasing importance of technology for creating new products; this is true for firms in all industries.

When asked whether a 2.2% budget increase in enough, Dave Aron, an analyst at Gartner, had but one word: "No."

"Many companies are struggling to get out of the mentality that IT is all about business process automation" and in need of only "incremental changes," said Aron. "Leaders will be spending much more than that," he said.

IT growth rates

-- 2015 to 2016 change in global IT budget +2.2%

-- 2014 to 2015 +1.0%

-- 2013 to 2014 +0.2%

-- 2012 to 2013 -0.5%

-- 2011 to 2012 +1.0%

-- 2010 to 2011 -1.1%

Source: Gartner; all numbers represent forecast estimates by CIOs surveyed.

Gartner, which is running its large user conference -- called Symposium/ITxpo -- in Orlando this week, says that its survey also found that "digital revenue" is expected to grow from 16% to 37%.

Digital revenue is a catch-all term covering a wide range of activities, such as IT-led smart automation, Internet of Things deployments, analytics, robotics and any product that sells through a digital channel.

In this survey, 65% of the CIOs said there was "talent crisis" in the world, with Gartner recommending that businesses do more to get closer to universities, do more with mentoring and provide job rotations.

"The majority really don't have a good idea about what to do to address this talent issue," said Aron, of the CIO survey. But the survey also found that CIOs spend a median of 10 days annually developing their skills, knowledge and leadership capabilities.

 

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