New research from Gartner shows enterprise IT spending is on the rise because businesses are looking for ways to improve efficiency and stability in response to economic turbulence.
Rather than cutting IT budgets, CEOs and CFOs are planning to increase spending on digital business initiatives, with 70% of surveyed buyers expecting to increase IT services spending in the next 12 months," said the firm noted in its research, adding that enterprise spend on IT services is forecast to grow from 9.6% in 2022 to 8.5% in 2023.
The forecast for IT services spending shows continued growth in 2023 across all markets except hardware support. What are the C-levels intending to spend their money on? See the chart below.
Spending to beat the skills shortage
Enterprises also see increasing their IT spend as a solution to optimizing productivity in the face of losing critical skilled workers to technology companies. Gartner says the talent shortage will continue to challenge CIOs and CTOs over the next five years.
"This is a significant shift to the market and new projects can be delayed until staffing is assured," writes the firm. "Organizations will struggle to achieve both growth and performance ambitions through internal resources and capabilities alone, as the talent crunch has constricted access to talent related to cloud, analytics and data platforms."
In fact, Gartner Digital Business Buying Behavior Survey showed that 27% of respondents said that the “lack of internal/in-house digital talent and skills” as one of the top things them back from achieving their digital business ambitions.
Solving the CIO’s skill gaps is increasingly a technology and service provider’s problem, said Gartner. As a result, the firm says "the gap in spend on IT services versus internal spending is holding steadily, holds true across all verticals." (See chart below.)
So basically, businesses are spending money to make money. That seems about right.
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