In January, Gartner, an information technology research company, released projections for IT spending for 2014. Worldwide spending is projected at $3.8 trillion, a 3.1 percent increase from 2013 spending of $3.7 trillion.
Gartner believes enterprise software spending will be the strongest IT expense, growing 6.8 percent, but focus remains on enhancing customer experiences throughout the presales, sales and post-sales process.
What does this mean for local small, medium and large companies that ask themselves, “Why are we spending more on IT this year?”
It’s partially a supply-and-demand issue. With increased dependence on technology and measurable impact, we create the need for more complex IT environments, security and infrastructure systems.
IT integration and execution has expanded its footprint beyond the traditional high-use sectors, like financial services and retail, to thriving education and health care markets, touching all aspects of the business along the way. With each new line of business application a company adopts, there is an increase in the complexity of the entire IT infrastructure, creating more demand for trusted resources — both for computing and administration.
We are also spending more on IT as we increase the number of devices in our world. The days of having a single computer for most employees are gone. Today, workers have laptops, desktops, smart phones and tablets to maintain and support their work. Each creates its own demand on IT resources. It’s a double-edged sword, as resources also allow for remote workforces. Technological progress has enabled us to work at any time, from any location, using a variety of ways to connect. The “always on” mentality inevitably creates a need for more complex, secure IT infrastructure.
We also see increased regulatory requirements across industry sectors each year, particularly in financial and health care companies. And, concurrently, we see the IT labor demand outweigh the supply demand, driving up costs of the workforce required to implement, maintain and provide support. Many companies now find great success in automation, which reduces a company’s headcount but increases IT spending each year.
We know that software and hardware can do what people used to — but it now comes at a greater expense. The IT industry, like most emerging markets, eventually slows down and allows companies to catch up. For now, as technology and innovation reigns supreme, expect increased costs.