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CIOs Project Modest IT Budget Growth in 2013: Survey

New 2013 IT budget benchmarks from CEB (NYSE: CEB), a leading member-based advisory company, indicate that CIOs expect total IT budgets to increase 1.8 percent, roughly 50 percent less than they did in 2012.

Despite economic woes, European organizations are expecting a 2 percent increase in IT budgets. The primary driver of total budget growth comes from increases in operational expenditures of 2.5 percent.  Capital expenditure budget growth has stalled, according to CEB findings.

Two-thirds of CIOs expect to see increases in operating expenditures in 2013, while one-fifth plan to reduce them. CIOs expect to allocate funding increases to projects that improve employee productivity through better insights, collaboration and mobility, and to increase IT’s delivery flexibility and efficiency.

When technology is moving in a fast-forward mode, it is extremely difficult for chief information officers (CIOs) to stay in tune with the changing times. So, most CIOs are reduced to performing mere figurehead roles and, gradually, they tend to become what has come to be known as “chief ignorant officers”. (Read: Keep Your Friends Close and CIOs Closer)

CEB’s survey is based on more than 180 companies representing $52 billion in IT spending. Findings indicate that CIOs will double down on investments in mobile applications and information management to drive employee productivity in 2013. CEB released the survey findings Wednesday, Oct. 10.

Spending on mobile applications will grow 50 percent in 2013. CIOs will concentrate both on developing new mobile applications and making sure existing applications are ready for the mobile environment.  This does not include funds spent to supply employees with mobile devices or marketing funds spend on mobility.

Today’s always-on digital business is like a Tower of Babel for chief information officers used to traditional rules of tech trade. As most CIOs are not able to evolve with the changing times, chief marketing officers (CMOs) are getting ready to manage tech affairs of their organizations. (Read Interview with Yuchun Lee on the Roles of CIOs and CMOs)

CIOs will continue shifting spending from process automation (30 percent) to information management (32 percent) projects. Information management projects are considered those that deal with business intelligence, collaboration or customer interface.

[ Also Read: Meet the Finalists for MIT Sloan CIO Symposium Award ]

Additionally, CIOs are expected to increase spending to make IT delivery more flexible and efficient.

Spending on the cloud will increase to roughly 7 percent of total IT budgets. Software-as-a-Service (SaaS) will receive the largest share of spending, followed by Infrastructure-as-a-Service (IaaS).

Seventy-five percent of organizations that offer some form of end-to-end IT services plan to devote as much as 30 percent of their IT operating expenditure to this delivery model.

“CIOs recognize that the nature of work is changing and in this new environment there is a huge opportunity for IT to drive employee productivity,” said Andrew Horne, managing director at CEB.

“These investments suggest that the days of IT project queues filled with process automation projects are over. The best companies are laser-focused on equipping employees with the tools they need to more effectively contribute to the bottom line. To meet this demand, IT must be more flexible than ever before, so it’s not surprising that spending on end-to-end IT services and the cloud are also slated to increase.”

Photo courtesy: CEB

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