There has been an ongoing trend that asks more organizations to be more productive with the same or even less resources. How have businesses been adapting to this strategy? Are they asking us to make bricks without straw? Is there any way around this? The answer is found in IT investment.
The Computer Economics IT Spending and Staffing Benchmarks study is based on a survey from over 200 IT organizations conducted in the first half of 2016. According to their findings, IT organizations, on a grand scheme, are gradually expanding meanwhile widespread and ongoing IT spending and hiring is for the most part at a standstill. More organizations are changing their spending habits in flat capital budgets for new initiatives. They are moving towards the cloud because it has potential for long term growth and its value to IT is increasing. Despite budget growth being slow, there is still room for optimism.
Since budgets are not increasing, does it call for Panic and worry?
IT organizations have been doing more with the same spend for two years and running. Same scenario as in 2015, where IT spending per user is meaningfully lower than the spending from 2012 to 2014. The number of companies increasing their IT budget is the lowest since 2013 and the anticipated increase in IT operational budgets is only 2.0%, the lowest it has been since the recovery of the Great Recession.
Why are the IT budgets so low and what are people doing about it?
The weak growth in IT budgets can largely be accredited to soft economic conditions in the first quarter that came right after collapsing commodity prices, fears about oil patch defaults, a manufacturing sector affected by a strong dollar and the emerging-market downturn. The slowing IT operational budget growth, mostly reflects the soft revenue growth.
Business leaders are realizing that investing in IT is the same as investing in the future. Although the economy may be slow, business leaders are investing in security, cloud, networking, business intelligence and mobile applications.
Things may be looking bright but in no way is IT delivering more for less. IT budgets are being used for new initiatives this year across many sectors. Since IT budgets are not rising, IT executives are using methods that maximizes cost savings so that they could invest in new technology. The steady decrease in IT spending per user over the past two years means that companies are using IT to produce more revenue with fewer employees. The cloud enables IT organizations to serve more users for less money.
Is Cloud the answer to all of our IT struggles?
The cloud is not the “be all end all”. The cloud is changing the market and making hardware spending less likely. Instead expect organizations to move towards investments in business applications, especially software as a service and networks. Computer IT forecasts that IT organizations will invest more in talent, such as managers and developers who can transition to cloud, mobility and big data solutions.
There is a growing number of IT executives who consider their budget as “somewhat inadequate” or “very inadequate” especially among smaller organizations. The economy has not encouraged organizations to invest to fully meet new challenges and needs. The uncertainty of the economy may have slowed spending in the short term, but there is still potential for demand for technology that can support new business initiatives. Three consecutive years without capital spending growth along with what will hopefully be a stronger business climate should lead to higher IT investments in the near future. IT organizations may be doing more with less but the demand for more has not stopped.
How are your IT spending habits?
Well if this lack of increase in IT spending is causing you to sweat then there is only one option for you to do. You have to take a look at what you’re doing and change it up. There are various solutions out there that can help you cut costs so that you can reinvest those saving into promising projects.
A large number of IT organizations are not keeping track of their bills due to the lack of employees and time. This creates extra expenses that are not necessary. The most troubling thing is that those extra expenses can be prevented as there are solutions that address those problems. Some organizations have data for common subject sparse out among different areas which can be cumbersome to use and slow down the process of pulling information from a database. The cost of managing all this information is rising as it gets harder to keep track of. Let’s not forget bill shock and the hidden fees that get tacked on to monthly invoices. On average there are only 20% of IT spending that is visible on the IT budget. If you suffer from any of these issues then you should consider getting the assistance of a Technology or IT expense management provider.
Managing your Telecom and Wireless Costs is a Good Way to Start
Cimpl offers a Technology Expense Management solution that can help you save between 5% - 30% in telecom costs. Cimpl not only provides a means for saving money but it also does so without you needing to hire more employees to keep track of data. With Cimpl’s Telecom Expense Management (TEM), managers will be able to monitor their expenses and possibly discover that they are still paying for assets that they are no longer using (it is not only limited to IT, all business units can manage their own costs). It provides employee visibility to see their expenses as they use their assigned devices. This encourages employees to take more responsibility on how they use assets. This type of behavior fosters IT cost transparency. Cimpl helps centralize your data. If you need help managing IT, telecom and vendors but lack the resources and budget to keep up with technology in your company then we’ve got the solution for you.
Are you on top of how you’re being billed? Would you like to increase your cost savings? Then Cimpl can help.
- 7 Components of a Successful IT Budget
- The Technology Life Cycle and the IT Budget
- Accountability and IT Budgets in an Age of Increasing IT Debt