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Ministry of Defence BT Inmarsat Science & Technology Facilities Council

IT Budget Trends

Where do trends suggest IT budgets will be spent in the next 12 months?

IT should be the core of the business. Enabling business transformation and encouraging innovation, there’s more to IT than making sure that everything – and everyone – remains ‘live’. This inevitably means that money will be pumped into the department, regardless of cost-cutting elsewhere in the business due to uncertain financial times. With the increasing importance of IT in the business, what do current trends suggest where IT budgets will be spent in the next 12 months?

IT Spend

How big will the budget be?

Year upon year, departments have to adapt to smaller budgets. This is because businesses are aiming to become more cost-effective all the time whilst exceeding goals. Since IT is widely regarded as the department to bring about big changes and exceed goals, it’s surprising that studies suggest IT budgets will go up in the next 12 months.

Whilst businesses are undoubtedly trying to save money across the board, organisations generally believe that IT is crucial to a business and the difference the department makes essential. This means that the IT department is often favoured over other sections of the establishment.

Where do trends demonstrate budgets are currently spent?

Definitive evidence derived from studies demonstrates that IT budgets are increasingly likely to increase than decrease, so where does the budget get invested?

Based on a recent survey conducted, it’s evident that despite the apparent aim of focusing on innovation, IT departments end up spending their budget elsewhere: for more than 35% of organisations, the majority of the budget is spent on maintenance and managing the IT systems. This means that the budget, ideally for development, is been spent on tasks such as maintaining systems, applying upgrades and ensuring security. Whilst these tasks are necessary – budget for such a significant department could be invested more wisely.

Where do trends suggest budget is going to be spent in the next 12 months?

Unfortunately, IT isn’t currently being allowed to spend money in areas where it would ideally be focusing funds. Is change on the horizon or is it going to be another year of arguably wasted budgets?

Well, it appears that it’s going to be another year of money mainly spent on keeping everything running smoothly for IT. Of course, maintenance is important – IT is always going to have to spend on this. However, the same study asked how the IT budget spending on maintenance has changed over the past 3 years and the signs aren’t good: 55% say budget dedicated to maintenance has increased over the past 3 years. This means that spending on maintenance is not even staying the same. Instead, budget spent on maintenance is increasing.

The findings suggest that over the next 12 months, IT budgets are going to spend more on maintenance than ever. Regardless, the future isn’t so bleak: Whilst a big percentage suggested around 50% of the budget is spent on maintenance, that’s still only half. This means that there’s still a notable amount of the budget devoted to developing solutions and introducing new initiatives.