Budgeting, Planning & Forecasting

Budgeting, Planning & Forecasting

October 05, 2011

Most U.S. Companies Plan to Increase IT Spending in 2012: Nucleus Research

A recent research from Nucleus Research finds that half of U.S. companies plan to invest more on IT resources in 2012 than in 2011 while only one out of 10 companies plan to decrease IT spending next year.

Among these, 10 percent of the companies said they are planning an increase of 10 percent or greater.

The survey results show IT investment remains a priority for most organizations despite the temptation to cut budgets in the current economic scenario. This is because companies view technology investments as a means to drive efficiencies and make existing employees more productive.

Top IT solutions that see continued investment include customer relationship management (CRM), integration, business intelligence and analytics, and workforce management. Software in particular is more flexible than ever, representing one of the only investments that can provide both cost containment and revenue growth opportunities, the report said.

Nucleus has underlined five ways to improve IT spending. Moving applications to cloud is one of the best ways. By doing so, a typical company can redeploy 15 to 25 percent of their overall IT personnel budget.

Companies should also look for commercially developed and supported applications instead of developing custom applications. The commercially available software solutions typically meet at least 80 percent of requirements, according to the research.

Nucleus also cautions organizations against purchasing unnecessary software or hardware. A recent survey conducted by Nucleus found that 42 percent of companies made such purchases that could have been avoided if they had access to more accurate data about their applications.

Other solutions to improve IT spending include cutting custom report writing and eliminating IT training. The research agency instead asks organizations to pick intuitive applications that do not demand special training, or include vendor-provided training a part of the purchase agreement.

In June, Gartner (News - Alert) reported that worldwide IT spending is on pace to grow 7.1 percent in 2011. Global IT services is forecast to reach $846 billion in 2011, a 6.6 percent increase from 2010. The computing and hardware segment is poised for the strongest growth with spending forecast to grow 11.7 percent in 2011.

Rajani Baburajan is a contributing editor for TMCnet. To read more of Rajani's articles, please visit her columnist page.

Edited by Jennifer Russell

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