Many CIOs See IT Spending Growth in 2013

Fiscal cliffs, growing cyberwarfare attacks, BYOD, cloud computing, tablet computer adoption and the growing requirementfor CIOs to be sure their organization has developed a strong and coherent Information Assurance program are key driversin the IT budget planning cycle for 2013.

 

 New research from TEKsystems shows that IT leaders are almost evenly split on expectations regarding budget increases for 2013. Additionally, IT leaders are gravitating toward investing in core application and infrastructure services and staff, with a greater interest in permanent hiring. Finally, the vast majority of organizations have no concern regarding loss of skills as it relates to baby boomer retirement.


More than 600 IT leaders (CIOs, IT VPs, IT directors, IT managers) were polled in September 2012 to understand the current state of IT spending, skills needs and workforce issues to identify critical areas.


The following are some key highlights from the survey:


Spending and Challenges


IT leaders are nearly evenly split on whether IT budgets will grow versus remaining the same or declining. Forty-eight percent expect an increase in their organization's IT budget, while 52 percent expect it to remain the same (27 percent), decline (16 percent) or didn’t know (9 percent).IT leaders’ confidence in whether their budgets will support the business needs of the organization closely mirror spending expectations. Fifty-four percent are confident that budgets will be adequate, while 46 percent are neutral (25 percent), unconfident (16 percent) or didn’t know (5 percent).IT leaders still see budget as their greatest challenge. In ranking the top challenges, “acquiring necessary budgets” ranked first, followed by “attracting, retaining and developing top talent” and “improving IT performance/efficiency.”


Areas of Investment and Organizational Impact


Application and Infrastructure services spending top the list. When asked which areas IT leaders expected spending to increase, 49 percent expected growth in IT Applications Services spending and 47 percent expected growth in IT Infrastructure Services spending.Outsourcing and education services spending lose momentum. Sixty-nine percent of IT leaders expected spending for outsourcing services to stay the same (39 percent), decline (20 percent) or didn’t know (10 percent). For IT education and training, 70 percent expected it to stay the same (44 percent), decline (17 percent) or didn’t know (9 percent).

 

 Top three impact areas include newer trends such as business intelligence and cloud computing, yet security still remains high. Business intelligence, cloud computing and security were the top three trends expected to have the largest organizational impact. Additionally, more than 58 percent of IT leaders expected the trend towards cloud-based and “as-a-service” offerings to drive an increase in demand for IT skills, while less than 15 percent expected it to decrease. Operations a top concern. IT leaders ranked “operations” as having the largest increase in IT needs, followed by “marketing/sales” and “finance/accounting.” 


Hiring, Compensation and Skills Replenishment


IT leaders slightly positive towards salary increases. In terms of compensation, 55 percent of IT leaders expect their IT staff’s salary to increase, while 44 percent expect it to remain the same (34 percent), decrease (4 percent) or didn’t know (7 percent).“Core skills” expect to see highest salary increases. When asked which IT staff salaries were expected to change, more than 40 percent of IT leaders expected salary increases for developers, engineers, project managers and security experts.

 

More than 30 percent of IT leaders expected salary increases for business analysts, architects, analytic experts, cloud experts, help-desk and support, mobile and .NET technologies. Mirroring the expected salary changes, developers, architects and analytics experts ranked highest in difficulty of obtaining. Surprisingly, social media skills saw the lowest expectation of positive salary growth with less than 30 percent expecting an increase.Organizations expect an increase in permanent headcount over other hiring models. For those IT leaders that are expecting to increase headcount, 39 percent expect to increase permanent IT headcount and 36 percent expect an increase in temporary headcount, while only 16 percent expect an increase in part-time headcount.

 

Organizations don’t seem concerned with the loss of skills based on baby boomer retirement. Just slightly more than one-quarter (27 percent) of IT leaders foresee the loss of skills due to baby boomer retirement as a problem for their organization. Sixty-three percent felt it would not cause an issue, while 10 percent had no opinion. Additionally, of the 27 percent of respondents who did see baby boomer retirement as a problem, only 15 percent had any retention programs to encourage baby boomers to postpone retirement.


“IT leaders are practically split on expectations for IT budget increases and still recognize budget procurement as one of their greatest challenges in the current economic climate. As such, IT leaders’ focus on investing in core application, infrastructure and operational needs like business intelligence and cloud architectures is naturally driving the demand for related skills,” said TEKsystems market research manager, Jason Hayman. “Successfully delivering return on investment (ROI) on these initiatives makes hiring the right people very important, especially for skills expected to have the greatest business impact. Interestingly, the majority of IT leaders are optimistic about their organizations’ abilities to respond to a potential baby boomer exodus which makes the importance of strategic workforce planning even greater.”

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Bill has been a member of the technology and publishing industries for more than 25 years and brings extensive expertise to the roles of CEO, CIO, and Executive Editor. Most recently, Bill was COO and Co-Founder of CIOZone.com and the parent company PSN Inc. Previously, Bill held the position of CTO of both Wiseads New Media and About.com.

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