One of the top technology challenges that businesses face is the budget for IT and controlling these costs. Keep reading to learn more about this problem.
IT budgets and costs are challenging.
For 2020, this issue might be more difficult. With the political and economic instability - possible global recession - this makes it harder for companies to manage these finances.
In this post, we'll walk through how IT budgets have changed over the last 5 years, how IT budgets will be spent in 2020, as well as how to control costs for your company's IT.
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IT budgets in 2020
What are the worldwide IT spending forecasts for 2020?
According to Gartner, the projection is $3.88 trillion - increasing from 2019. With enterprise software having the highest growth.
What about ICT Spending in 2020?
According to IDC, the worldwide spending is expected to grow to $5.3 trillion.
According to a survey of 232 business in. North America, 32% we small businesses with their IT budget at less than $5 million, 34% were medium sized and have an IT budget between $5 million - less than $20 million. The median level of IT spending growth is 3.1%.
Organizations appear to be spending just enough to maintain normal equipment-refresh cycles, not growing their onsite infrastructure.
What are the IT spending priorities?
- Cloud applications - 80%
- Cloud infrastructure - 61%
- Data analytics/BI - 56%
- Digital transformation - 51%
- Systems/data integration - 45%
- DR/business continuity - 35%
- Legacy systems modernization - 24%
- Data centre automation - 1%
The outlook for IT spending for 2020: might make things harder for CIOs.
Gartner and IDC both forecast growth in the global IT spending in 2020, a pattern that is also shown in recent surveys. Cloud infrastructure and applications are widely deployed, while the investment on onsite IT isn't a priority.
The top concerns for business leaders are consistent and stable IT performance, improved business processes, and greater operational efficiency; with issues like enhanced customer experience, better security, and innovative new products and services.
Organizations have been learning to live with "shadow IT" or "business-managed IT", but CIOs still have a variety of challenges in terms of shaping their role in the modern C-suite.
Read this report to get a more thorough explanation of the global IT spending and more breakdowns.
How IT budgets have changed over the last 5 years
Whether you love it or hate it, IT budget planning is needed. It's not a surprise that over the years, IT spending has increased. Technology evolves and progressing by providing workplaces with solutions.
In 2015, 80% of survey respondents indicated that their budget for IT was as much or more than the previous year. Almost half - 44% - reported that their budget in 2015 was slightly or significantly higher than 2014. Spending increased in 2016.
However, in 2017, there was only a small increase over 2016 spending. In 2017, 18% of respondents said that their budget in 2018 would increase by 11-20%. In 2018 and 2019, 39% of respondents said that their budgets would increase by 1-10%.
The dollar amounts for IT budgets have remained consistent. 70% of respondents reported that their budget would be less than $1 million. The same was true for 2018 (62% of respondents) and 2017 (66%).
In 2015, improving efficiency and business processes were considered the most important IT matter - 63% of respondents said so. IT priorities remained unchanged in 2016, except mobile device management made slight movement because if businesses using BYOD policies and more mobile application deployments.
In 2017, companies moved their focus to network and data security - because of the amount of security breaches that happened. 69% of respondents listed network security as a major initiative; 57% said they planned to invest in network infrastructure. A notable change in this year was budgets moving to more computing at the edges of enterprise and away from central data centres. 47% of respondents said that they spent more of their budget for edge computing devices with a focus on end-point PC hardware and operating systems'. Also, at this time, IoT applications were making their ways into companies.
Security was a major priority in 2018 (53% of respondents) and 2019 (63% of respondents). Other key areas of 2019 budgets were internal employee training and the cloud.
Ways to reduce your IT costs
- Replace turnover with lower level employees
- Hire new college graduates every year
- Manage your contractors
- Use offshore resources less than you do now
- Reduce turnover
- Virtualize servers by using containers
- Use less expensive hardware
- Use the cloud
- Decommission software
- Use open source software
- Virtualize databases
- Take the time to do things right with your hardware, software, and coding
We have reached the end of this post. We hope you have learned more about budgets and controlling costs for IT. If you have any questions or comments, use the section below.
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Sources:
Finance Monthly. (2017). The Top 10 Technology Challenges Business Face In 2017. Retrieved November 7, 2019 from, https://www.finance-monthly.com/2017/02/top-10-technology-challenges-business-face-in-2017/
McLellan, Charles. (2019). IT budgets 2020: How the money will be spent, and who will spend it. Retrieved November 7, 2019 from, https://www.zdnet.com/article/research-2020-it-budgets-increase-as-priorities-grow/
Ronan, Bob. (2017). 12 ways to reduce your IT costs. Retrieved November 7, 2019 from, https://www.cio.com/article/3176836/12-ways-to-reduce-your-it-costs.html
Wolkoff Wachsman, Melanie. (2019). Budget breakdown: How IT budgets changed over the last 5 years. Retrieved November 7, 2019 from, https://www.techrepublic.com/article/budget-breakdown-how-it-budgets-changed-over-the-last-5-years/
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