10 IT budgeting mistakes to avoid

Cost savings remains a huge area of focus for IT leaders, who have a ways to go before they master the complex task of building a great IT budget.

10 IT budgeting mistakes to avoid
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Here’s some good news for CIOs: IT spending is expected to grow 6.2% in 2021, according to the researchers at Gartner, who predict worldwide IT spending will hit $3.9 trillion this year, up from $3.7 trillion in 2020. Accelerated digital transformation is driving much of that increase, Gartner says.

Still, no CIO has a blank check. And despite the predicted increase in overall IT spending for this year, IT leaders and advisors say they must continue to carefully watch where their money goes. Plus, 2021’s IT spending growth comes on the heels of 2020’s contraction, making the bump meager compared with budgets pre-pandemic.

“Cost savings remains a huge area of focus right now,” says Ashwin Venkatesan, vice president of the Everest Group, a management consulting firm. He predicts that plenty of CIOs will actually see level-funded budgets this year; not everyone will get a 6.3% bump in spending. According to CIO.com’s 2021 State of the CIO report, only 49% of IT leaders expect their budgets to increase, with 39% remaining level, and 12% preparing for an average decrease of 18%.

Many IT leaders and their advisors say the typical request to do more with less remains in place with the continuing expectation to deliver efficiencies while supporting innovation.

To do all that, CIOs need to have adequate funding and appropriate spending allocations. Yet Venkatesan and others report that many CIOs have a ways to go before they master the complex task of building a great IT budget.

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