BenchmarkingIT Metrics

IT Spending & Staffing Benchmarks 2016: Executive Summary

Computer Economics has released its executive summary for the current state of IT spending and staffing, drawn from surveying over 200 IT organizations during the first half of 2016. While IT growth remains “slow but steady,” the data supports the idea that IT really is learning how to deliver more with less. These are the key findings uncovered in the summary.

Operational Gains

To begin with, the net increase in IT operational spending is expected to be only 39 percent this year, compared to 52 percent from last year, but the authors think it is possible these projections are a result of uncertain plans as opposed to a genuine downturn. All the same, a minute increase in IT operating budgets (a median 2 percent growth) means that available funds are often spent on applications and networks at the expense of hiring. Small organizations (where IT budget is below $5 million) are actually the ones undergoing the lowest percent increase in IT spending growth, which, aside from indicating larger businesses can afford to be thicker-skinned, might suggest that these smaller businesses can actually operate more efficiently and with agility.

As far as general confidence goes by IT executives that they will be allowed to exceed their spending plan, there are ever so slightly more executives confident of the increase than there are executives expecting to see their budget slashed instead. That being said, 49 percent of organizations find their IT operational budget inadequate to support the business, compared to 37 percent who believe it is adequate. The authors actually reflect upon this dissatisfaction as a good thing though, as it indicates IT executives have lofty ambitions for their businesses.

Per-user spending remains low, as the summary explains it:

IT spending per user is relatively flat year over year, rising slightly to $7,581 from $7,209. The difference is not that significant. One explanation is that IT organizations are becoming more efficient and productive due to the ongoing transition to the cloud. Another is that as companies continue to hire more employees, they are better able to support those new employees without expanding IT headcount. Both factors may be at work: software-as-a-service options allow IT departments to tap into economies of scale in the cloud.

Capital Questions

With regard to IT capital spending, which factors in long-term investments like IT infrastructure, the results are scattered. Forty-two percent of IT capital budgets are increasing, 32 percent are decreasing, and the remaining 26 percent are staying put. Yet at the median of IT capital spending growth, there has been a zero percent increase three years running, perhaps as a result of less infrastructure being required due to cloud migration.

The overall picture of IT across sectors appears to be one of a guy whose doctor told him he needs to get in better shape, so he starts dieting a little and going on a walk once or twice a week. It is not a spectacular improvement, but it is promising. IT just needs to watch its step and maybe pick up the pace.

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