Forrester Report Shows CIOs Plan To Spend More On Tech
By Christine Kern, contributing writer
A new Forrester Research report predicts that U.S. tech spending will see “solid, steady growth” both this year and next, forecasting that investment in business technologies will grow at a faster rate than spending on traditional information technologies.
According to Andrew Bartels, author of the report, this shift will be accompanied by new challenges, which will mean that CIOs will be required to “look for opportunities to simplify, modernize, and rationalize their IT investments.”
The Wall Street Journal reports that Forrester projected total U.S. tech spending to hit $1.18 trillion by 2017, an increase from the $1.02 trillion spent in 2014. This spending will also be marked by a shift designed to “win, serve, and retain customers.”
Forrester defines business technology as “software, hardware and services used to win customers and grow the business.” Such spending, they project, will comprise almost one-third of total U.S. technology spending by 2017. Currently, it makes up approximately one-quarter of overall spend. However, the report predicts, while business tech spending is on the rise, traditional IT communications spending will drop by 5 percent over the same timeframe. Software and consulting costs will make up the bulk of the new business technology spending. The report states: “Spending on software and tech consulting services will also be strong at 6.8 percent and 7.0 percent, respectively, in 2014, and growth will be even stronger in 2015 at 8.7 percent and 8.1 percent.”
While the largest piece of tech spending budgets remains the CIOs themselves, the fastest growth will be seen in telecoms services, with a gain of just over 10 percent is anticipated in 2014, followed by a weaker 4.5 percent gain in 2015.
In the public sector, tech spending is anticipated to remain “average,” according to the report, with 5.3 percent growth in 2014 and 6.3 in 2015.
Ultimately, Bartels concludes, CIOs must respond to the changing landscape by adjusting their focus to the technologies that can foster the protection and growth of revenues by winning and retaining customers. CIOs must work with business peers, such as chief marketing officer, who can assess the needs of businesses effectively. “If your firm is not devoting half of its new project spending to business technologies and supportive services, you risk falling behind competitors,” he says.