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July 25, 2012

IT Spending is a Top Priority for Company Boards of Directors

A survey just released by Gartner (News - Alert) has revealed that for company boards of directors, investing in IT has become Priority One. In fact, Gartner says boards are placing as much emphasis on IT spending as they are on investing in sales operations.

As many companies prepare for another potential economic recession, they begin to recognize that IT investments both increase efficiency and lower spending. Ninety percent of respondents said IT’s strategic contribution to company operations would increase significantly in the next two years.

Also, half of board members surveyed said that they believed that IT could “change the rules of competition” in their industries.

“It underlines the fact that the investments they plan to make are essential to growth and even survival,” Gartner vice president and distinguished analyst Jorge Lopez noted in a press statement.

Earlier this month, Gartner released a forecast of a 3-percent increase in global IT spending, which would bring the annual total to $3.6 trillion. Earlier in the year, Gartner predicted growth of just 2.5 percent.

Forrester (News - Alert) also released a forecast suggesting that European IT spending would be soft because of the ongoing uncertainty surrounding the euro.

“While the challenges facing global economic growth persist – the eurozone crisis, weaker U.S. recovery and a slowdown in China – the outlook has at least stabilized,” said Gartner research vice president Richard Gordon.

Researchers predicted that public cloud spending will increase to $109 billion while IT services spending would grow to $864 billion. Additionally, hardware spending will climb to $420 billion, and spending on enterprise software will jump to $281 billion.

But the largest area of growth will be telecom equipment, set to jump a whopping 10.8 percent to $377 billion. Telecom services will account for $1.69 trillion of IT spending totals.

The key step, according to Gartner, is for CIOs and IT professionals to recognize the potential for absorbing new technologies and systems that they gain when making acquisitions.

Lopez called the board members’ outlooks “forward-looking and proactive.”


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Edited by Braden Becker
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