Reflection: IT Leaders’ Thoughts on the Trajectory of Tech Budgets

It’s not a surprise. As business goals and strategies transform, budget plans often evolve with them. Technology has been playing a prime role in bringing new strategies to life, and as a result tech budgets have been increasing. The 2017 CIO Tech Poll: Economic Outlook research reveals how heads of IT anticipate their budgets changing and the factors ultimately influencing the fluctuations.

The majority of IT leaders (59%) expect their budget to increase over the next 12 months. Only 14% of their peers anticipate a budget decrease, and 25% plan for their budget to remain the same. Upcoming shifts in IT budget are expected to result from:

  • IT initiative/project start and stops – 46%
  • System upgrades/maintenance – 45%
  • New mandates from executives/Board of Directors – 45%
  • Pressure from LOB to make changes to IT operations or strategy – 37%

When heads of IT where asked to evaluate shifts in their tech budget during the previous budget cycle, over half (51%) said their previous IT budget increased. Additionally, 34% said it remained the same compared to the previous budget cycle. This continuous investment in technology is great news for technology vendors. The research also noted that a larger percentage of organizations (65% last year compared to 74% this year) are increasing their IT budget allocated to fast-paced/agile IT, which encompasses innovation and business advancement tools. IT budget focused toward stable/traditional IT development, which are technologies that “keep the lights on,” are also expected to increase to a greater degree than last year (28% vs. 21% last year).

Whether IT leaders anticipate an increase or decrease in their tech budget influences the factors that create these changes. For IT leaders expecting an increase, their reasons relate mainly to IT projects and tasks – IT initiative/project starts and stops, system upgrades/maintenance, and new mandates from executive management/board of directors. Those who are preparing for a decrease in budget are more likely to report management and pressure issues causing this shift – pressure from LOB to make changes to IT operations or strategy, new mandates from executive management/board of directors, change in IT headcount, and IT initiative/project starts and stops.

Learn more about how economic conditions are affecting IT spending plans among IT leaders in CIO’s research report.


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