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Forecast 2015: IT spending on an upswing

Stacy Collett | Nov. 4, 2014
As purse strings loosen up, CIOs blend innovation into 2015 IT budgets, but security and cost containment remain top priorities.

Cost Containment Still a Top Priority
Even though many of them will have more money to spend next year, 53% of the IT professionals surveyed said that containing costs is among their top priorities. Next on the list of priorities were automating business proc­esses (cited by 47% of the respondents) and optimizing existing investments (cited by 44%).

For example, the police department in Charlotte, N.C., is looking to purchase body cameras for more than 1,000 officers -- a big issue for police departments across the country. But body cameras require a huge investment in storage, networks, hardware and maintenance, says Jeff Stovall, CIO of the Charlotte city government.

"That level of change in investment is not going to come without a sacrifice somewhere else," says Stovall. "That's where prioritization comes in: What's really important to the city versus what's really important to the individual department?"

Charlotte increased IT spending by 13% for the fiscal year ending June 30, 2015, but after that, the budget will probably remain flat, Stovall explains. His primary goal for the second half of 2015 will be to drive transparency into how each city department is spending on its own IT projects, and how that spending aligns with the city's priorities. "Transparency forces prioritization discussions at the level of the city manager," Stovall says. "That is different from the stovepiped prioritization discussions of the past."

The key is open communication, says Jason Hayman, market research manager at TEKsystems, a Hanover, Md.-based IT services, staffing and talent management company that analyzes IT spending.

The whole C-suite needs to communicate the priorities of the organization and then decide what tools are going to be used to meet those goals. Once an application is chosen, everyone must agree on who's in charge and how the technology will be supported, he adds. Business units have been known to go rogue and purchase their own systems, Hayman says. And then, "all of a sudden they're calling IT saying, This system needs to plug in with other applications,'" he notes. "It causes back-office issues or technical issues, and the CIO didn't even know this was going on, or budget for it."

It boils down to making sure there's transparency and communication within the business units. Executives from all areas of the organization need to be on board and say, "Here is what we're going to do, here are the objectives and the applications we're going to invest in," Hayman says. "[Then] the CIOs can make their best judgments."

As Snyderwine gets set to present his hefty IT budget proposal to the Hargrove executive team, he acknowledges a dose of reality. While he'd like an increase of 20%, he says, "I think I'll probably come in at around 10%." But that won't dull his optimism. "I'm not presenting gadgets; I'm presenting use cases of what technology does for the customer -- and they're looking at the sales numbers," he says. With the right pitch, technology and sales should be able to move forward together, he says. "As we say in the trade show business: The show must go on."

 

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