IT spending up as companies invest in digital technology
Businesses are stepping up their spending on IT as they invest in strategic digital technologies, a CIO survey by Deloitte reveals
Businesses are stepping up their spending on IT as they invest in strategic digital technologies, a survey of CIOs by business advisory firm Deloitte reveals.
Some 78% of UK CIOs say their budgets have increased or stayed the same, as companies prioritise investments in web and mobile technology, the research claims.
“IT budget cuts, in the UK but also globally, are largely behind us, with companies investing more in IT, innovation and key areas such as digital,” said Kevin Walsh, head of Deloitte’s consulting practice.
The survey, which gathered views from 700 CIOs in 36 countries, including 90 UK CIOs, shows that companies are prioritising investments in web and mobile e-commerce.
“IT departments are recognising the need to be more innovative in what they do. That points to mobile and social technology,” said Walsh. "The majority of spend is in interacting with consumers through web and mobile.”
Internationally, companies are spending almost half of their IT budgets on business change and growth, with the rest going on "business as usual" operations.
CIO ambitions
The majority of CIOs are staying in their posts for an average of three years, showing that CIOs are interested in settling down and establishing themselves in an organisation.
CIOs are also setting their sights at higher levels in the organisation, with almost 40% of CIOs internationally considering a move to a CEO or COO position for their next job.
The main reasons cited for moving roles are the opportunity to make a greater contribution to the business (27%) or a new challenge (26%).
Innovation
Innovation is becoming an increasingly important driver for IT, the survey reveals, with two-thirds of UK CIOs reporting that they understand the IT department’s capability to drive their companies’ innovation strategies.
However, only 19% believe that the IT department is viewed as a credible hub for innovation by the business – a lower figure than for CIOs internationally (35%), pointing to a disconnect between IT and the business.
Although IT departments have become very credible at delivering large, complex programmes, the head of digital or the chief marketing officer is often the first port of call for leading innovation, said Walsh.
Business partnering poor
The survey also raises questions about the ability of the IT department to work closely with the business.
Over 70% of UK CIOs regard the ability of the IT department to partner with business as "fair to poor", compared with 60% internationally.
“That is crucial, because if you are going to lead on innovation and be close to business strategy, it's all about how well you can partner with the business,” he said.
The difficulty of recruiting IT staff with strong business skills may be part of the problem, the survey suggests.
Over 60% of CIOs internationally reported difficulties in recruiting top talent. The ability to think strategically, think like the business and communicate effectively were among the top skills gaps identified by CIOs.
Top IT priorities
- Supporting new business needs
- Driving digital strategy
- Reducing IT costs
- Consolidating infrastructure
- Maintaining operations
Technology priorities
The survey shows that despite talk in IT circles about cloud, mobile, data analytics and other digital technologies, most companies are still at an early stage in their deployment.
“The true level of adoption of technology trends is still relatively low. A lot of businesses are still trying them out or piloting them in certain areas, but they are not implemented,” said Walsh.
