With 2020 in the rearview mirror, finally, CIOs are looking at bigger budgets and an acceleration in their digital transformations.
This article was originally published on Information Week.
After a year of responding to a crisis, CIOs in 2021 are taking a more proactive stance, looking to help their organizations as they build out digital business projects that make the most of shifting markets and revenue opportunities in a changed economy.
Box CEO Aaron Levie put it this way in a recent tweet, “Most enterprises focused 2020 on remaining resilient and shifting work to remote. Now in 2021, every conversation I’m having with customers is how their business models change because of digital. Powering this is the big opportunity in enterprise software now.”
Not only will the focus change in 2021. CIOs will also be seeing the budget dollars to help turn those goals into reality. Whereas CFOs were highly focused on preserving cash in the months after the pandemic and lockdowns hit a year ago, the trend for technology spending has reversed in 2021, according to an IT spending outlook from Gartner.
The analyst firm is projecting worldwide IT spending of $3.9 trillion in 2021, an increase of 6.2% from 2020. Worldwide IT spending declined 3.2% in 2020 as CIOs prioritized spending on technology and services deemed mission-critical during the initial stages of the pandemic, according to Gartner.
Some of that cash preservation discipline will remain in place this year, but IT organizations will be investing for growth, according to John-David Lovelock, chief researcher and distinguished research VP at Gartner.
“CIOs have a balancing act to perform in 2021 — saving cash and expanding IT,” he said. “With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth, not their current revenue levels. Digital business, led by projects with a short time to value, will get more money and board level attention going into 2021.”
Gartner is forecasting IT spending levels to return to growth across all categories in 2021. That includes data center systems (6.2%), enterprise software (8.8%), devices (8%), IT services (6%), and communications services (4.5%).
“Enterprises are industrializing remote work for employees as quarantine measures keep employees at home and budget stabilization allows CIOs to reinvest in assets that were sweated in 2020,” Lovelock said.
Investing in accelerated digital business transformation will be at the top of the agenda for the next few years through 2024. Areas for this investment include cloud computing, core business applications, security, and customer experience.
Gartner is forecasting 2022 growth for the following IT categories, too: data center systems (3.4%), enterprise software (10.2%), devices (1.3%), IT services (6.3%), and communications services (3.3%).
Automation efforts will also remain on the front burner as organizations look to get more done with the same workforce. For instance, many organizations have implemented chatbots to help with everything from IT help desk issues to public websites that answer questions about COVID-19.
But expect more of the automation and digital transformation in 2021.
“Greater levels of digitalization of internal processes, supply chain, customer and partner interactions, and service delivery is coming in 2021, enabling IT to transition from supporting the business to being the business,” Lovelock said.
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