Question

KEY IT ISSUES STUDY 2017

This article presents the major findings from the Society for Information Management’s (SIM) 2017 IT Trends Study. Companies’ average IT budgets increased sharply to $107 million in 2017 -- representing a 23% increase over the average IT budget in 2016 ($86.6 million), according the Society for Information Management (SIM) IT Trends Study, which was released Thursday. Over 760 organizations and 469 Chief Information Officers (CIOs) participated in this year’s study.

The study found that IT spending as a percentage of revenue rose from 5.04% in 2016 to 6.08% in 2017. This 20% increase is the largest annual increase in IT spending observed since 2012 when economic pressures from the Great Recession began to subside. While an overall upward trend in IT spending suggests organizations are valuing the contributions of IT in supporting and driving business strategy and transformation, the study reveals considerable differences in spending across industries. Industries spending the most (as a percentage of revenue) on IT include: IT Hardware/Software (15.9%), Not-for-Profit (11.6%), and Financial Services/Insurance/Banking (9.7%). This contrasts the industries spending the least on IT: Retail/Wholesale (1.4%), Construction/Architecture (1.6%), and Energy (1.9%).

How would you as a CIO prepare for and respond to these issues and trends especially those over the last 4 years.  

Answer 1

Being a CIO, I would try to look at the reasons why IT is being used across the industries which have higher participation vs. the industries which have lower share of IT usage. All the industries in which the share is increasing are mainly service driven and virtual transactions can be performed with the ease of a button. As a company one can service the lower share clients of retail/wholesale and construction industry by increasing their online content and transaction base, creating softwares which are easily accessible and which could help them grow their business. For example creating software which has the ease of doing business and emailing clients at the click of a button. The company clearly needs to address such issues as the share of such companies is declining. Thereby increasing the size and scope for IT.