by Lynn Haber

Mobile, BI and Cloud Drive Increased IT Spending

Nov 14, 20125 mins
BudgetingBusiness IntelligenceCloud Computing

CIO Tech Priorities research shows that top IT decision-makers plan to increase spending over the next 12 months. The largest chunk is expected to go to mobile technology, cloud computing services, and business intelligence and analytics. CIOs offer their insight into the findings. (Download the full report.)

The latest CIO Magazine Tech Poll/Tech Priorities survey indicates that IT budgets will rise over the next 12 months and investment in mobile technology will garner the largest chunk of increasing IT budgets. IT executives are also targeting spending initiatives on cloud computing services and business intelligence and analytics (BI&A) among their top three areas of interest.

According to the latest CIO surveyalmost half, or 48 percent, of 269 top IT decision-makers report that IT spending will increase over the next year, 39 percent expect budgets to remain flat, and 13 percent anticipate IT budget cuts.

These figures align closely with a similar survey taken six months prior, in January 2012, when 46 percent of respondents reported increased spending, 38 percent said budgets would remain flat, and 16 percent reported less spending.

CIO Tech Poll/Tech Priorities
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Business process innovation is the key driver for increased spending at over one-third, or 35 percent, of responding organizations. Twenty-two percent of respondents report the drivers for increase spending in each of two areas: creating top line revenue growth and more efficient management of IT infrastructure while 18 percent of organizations are looking to lower business operating costs.

At Troy Design & Manufacturing Co., the IT organization is looking at an increased operating budget of about 15 percent and a 20 percent increase in the capital acquisitions budget moving into 2013 compared to 2012, according to Lee S. Murray, director of IT.

The main driver of increased spending is to increase overall business. Murray anticipates an increase spending in fundamental technologies as well as new capital acquisitions to accommodate rapid growth at the organization.

“There is also momentum for mobile deployments and we’re moving as rapidly as we can into this area,” he says.

Mobile technologies are a hot investment area for CIOs with 58 percent planning spending increases over the next 12 months. Many organizations are in the process of piloting mobile-related technologies. For example, 25 percent, of IT leaders report that they’re experimenting with mobile technology, with 20 percent piloting tablets, and 19 percent in a pilot phase with social media/collaboration tools.

Top-line revenue growth is the key driver for increased IT spending at Hargrove Inc., an event company specializing in trade show management, special event production and exhibition design and fabrication.

Barr Snyderwine, CIO of Hargrove, explains that customer-facing applications that provide an increased and improved customer experience, and target customer retention are vital to the company’s IT efforts.

“The company is in the process of deploying tablets and uses cloud apps where appropriate,” says Snyderwine. The event company is also in the process of developing new mobile client apps to facilitate the customer experience.

When looking at what’s on the radar, over the next year, for CIOs, the numbers clearly point to BI&A, 39 percent; and business process management, 36 percent; followed by cloud external/public, 32 percent; social media/collaboration tools, 31 percent; and cloud internal/private, 31 percent.

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“BI is the big thing when I talk to other CIOs,” says Snyderwine, who adds that getting more granular data to the company’s managers is critical to being able to track at the task level for a better view of business operations. Snyderwine is currently exploring BI&A tool options for the company.

The same is true at Troy Design & Manufacturing. “When it comes to BI&A our plan forward is still in development with investments expected to increase over the next 12 months,” says Murray. “We’re on a never-ending mission of data mining in support of continuous improvement measures,” he adds.

The current CIO survey indicates that overall business investments continue to swing from core to edge technologies, such as mobile, BI&A, tablets and cloud.

Investment in cloud technologies is vital to cost reduction efforts at Galata Chemicals, a midsized global business. “We’ve been in the cloud with our desktops, SAP, antivirus, telecom as well as several other SaaS applications,” says Phillip Andrews, director of IT at Galata, adding that as a global business the company must play large by extremely leveraged resources.

Galata is one of the survey respondents that will lower its IT spending over the next 12 months to meet its business objective of cost reduction.

In production and off the radar at most organizations is server virtualization. A healthy 65 percent of companies report that server virtualization is in production at their facilities. Forty-nine percent of survey respondents report that they’re in production with enterprise-wide server virtualization and another 16 percent report that server virtualization is in production in business units or divisions.

A scant five percent of respondents report that they’re currently piloting the technology while at the other end of the spectrum, 10 percent of organizations report they’re upgrading or refining existing virtualization infrastructure.

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The other top technologies in production at the business unit, division or enterprise level as reported to CIO are, hardware infrastructure (desktop/laptop upgrades), 48 percent; hardware infrastructure (smartphones, i.e. BlackBerry, iPhone, Android), 43 percent; data management, 42 percent; customer service/CRM, 41 percent; enterprise resource planning (ERP), 41 percent; and video conferencing/telepresence, 41 percent.

Download the full Tech Poll/Tech Priorities report (PDF)

Lynn Haber is a technology journalist based in Massachusetts. Follow everything from on Twitter @CIOonline, on Facebook, and on Google +.