Research: 2019 IT budgets growing in several key areas thanks to favorable business climate

A recent Tech Pro Research poll showed an increase in IT spending, as more companies recognize its value for businesses.
Written by Melanie Wachsman, Editor
Image: Jirapong Manustrong, Getty Images/iStockphoto

It's that time, when technology decision makers start building budgets for the 2019 fiscal and calendar year. How much funding organizations dedicate to IT, and where that funding is allocated, were the topics of a recent Tech Pro Research survey.

In August 2018, Tech Pro Research surveyed technology professionals about their company budgets for calendar and fiscal year 2019. Questions ranged from how this year's budget differed from the previous year, how money will be spent, and how tech professionals felt the IT budget was valued by executive leadership.

SEE: Tech budgets 2020: A CXO's guide (ZDNet/TechRepublic special feature) | Download the free PDF version (TechRepublic)

According to survey respondents, executives view IT budgets pretty favorably. So much so, that IT budgets will see a more aggressive spend in 2019, operating within a 1-10 percent increase over 2018 IT budgets. This growth can be attributed to a favorable business climate, as well as the growing recognition of technology's ability to fuel revenue opportunities and cost savings for businesses.

Key investment areas

Businesses continue investing in key technology areas such as security and cloud services. (Security remains a top IT priority for 2019, as it was in 2018). However, one shift in IT spending emerging in 2019 is employee training. Forty-four percent of the 2019 survey respondents say employee training is a top IT priority.

This shouldn't come to a surprise. Simply put, organizations are hiring, and new employees need training. Further, existing workforces also need retraining as work processes and technologies constantly change.

Although central IT continues to drive technology funding and adoption, survey respondents report a slight move away from IT as the main decision-maker for technology purchases. Instead, end business areas outside of IT are gaining more control over IT decisions. In 2018, 48 percent of IT survey respondents were key influencers in technology purchase decisions. That number drops to 42 percent in 2019.

SEE: Digital transformation: A guide for CXOs (Tech Pro Research)

This shift is supported by other industry findings that show an increase in 'shadow IT', where users make technology decisions and bring technology on board, often without IT's knowledge. When this happens, central IT's role in technology budget decision-making diminishes, and technology funding moves to business unit budgets.

As organizations adjust to this new IT purchasing model, IT and end users will collaborate more on technology evaluations and buying decisions.

IT purchasers expect more from vendors

Overall, companies are excited about the potential of new technology transforming the enterprise and improving results. While this may seem like a win for IT vendors, businesses will expect more rapid return on investments or recoups on cost of ownership than in the past. Further, businesses will expect technology vendors to conduct successful proofs of concept before they buy.

Tech Pro Research surveyed more than 100 IT professionals around the world, representing a diverse array of industries, and company sizes. A majority of businesses responding to this budget survey are in the small- to medium-size business category. The majority of survey respondents work in IT with 37 percent identifying as IT managers, 18 percent identifying as IT executives, 14 percent identifying as IT staff, and 7 percent identifying as IT consultants.

The infographic below contains selected details from the research. To read more findings, plus analysis, download the full report: 2019 IT Budget Research Report: IT Spending increases due to business conditions, security and revenue opportunities (Tech Pro Research subscription required.)

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