Global IT spend decline forces businesses to get creative

This morning, we reported how Gartner predicts global IT spend to drop by 0.5 per cent.

With device sales dropping, and the smartphone market in the West hitting the saturation point, it’s bound to make an impact on IT budgets everywhere.

Commenting on the forecast, research vice president at Gartner, John-David Lovelock, told Computing businesses will need to get creative as the belt tightens, but also says investments are now more urgent than ever.

"There is an undercurrent of economic uncertainty that is driving organisations to tighten their belts, and IT spending is one of the casualties," he said.

"Concurrently, the need to invest in IT to support digital business is more urgent than ever. Business leaders know that they need to become digital or face irrelevance in a digital world. To make that happen, leaders are engaging in tough cost optimisation efforts in some areas to fund digital business in others."

In order to get there, Lovelock says businesses can optimise their legacy IT operations and shift to cloud in order to save money and invest in new digital initiatives.

"Typically, less than 10 per cent of organisations are in cost-optimisation or cost-cutting mode. However, the need to spend on digital business initiatives at a time when revenue growth does not support runaway IT budgets is forcing more organisations to optimise as a first step,” he said.

“Business processes, as well as IT, are undergoing optimisation. Digital business requires both, but many CIOs are reluctant to raise this possibility given the cultural and political barriers to optimising business costs."

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