As the year draws to a close, it's time for many organizations to start planning their IT budgets for 2015. With that in mind, Tech Pro Research surveyed IT professionals around the world to find out if next year's budgets will be more or less than the current year, and what they'll be spending the money on.
The resulting report, Tech Pro Research's 2015 IT Budget Trends, identified some interesting trends around who creates the IT budgets and how they're approved. Many companies are feeling better about the economy and spending more, but they have to work harder in order to justify budget requests to get funds allocated.
Many respondents reported that IT is seen as equal to or more important than other business units within their company, and that IT budgets for 2015 will be the same, or higher, than in 2014 for eight out of ten organizations. Interestingly, emerging markets are investing more heavily in IT than developed regions such as the US or Canada.
Who is in charge of the IT budget?
The survey was focused on responses only from respondents who actually work in IT, and have some familiarity with how the IT budget is developed in their organization. The respondents were asked, "Who creates the IT budget in your organization?" and the IT department head was the largest response at 45 percent. The CIO came in second at 26 percent.
Interestingly enough, nearly a quarter of the respondents indicated that the IT budget is created even higher up the C-level food chain. Ten percent stated that the CFO determines the IT budget, while 14 perent of respondents said the CEO decides the IT budget.
After the budget is created, until the budget is approved and the funds are allocated, that IT budget is really just a wish list. The responses to the question of who approves the final IT budget are almost the exact opposite of who creates it. The survey revealed that the CEO is responsible for the final budget approval 54 percent of the time, and the CFO has final say 26 percent of the time. The IT department head and CIO combined for more than 70 percent of budget creation, but only 6 percent of budget approval.
Budgets are increasing for 45 percent
The good news is that IT budgets are increasing. More than 80 percent of respondents indicated that the IT budget in 2015 is as much, or more than the previous year. In fact, nearly half — 45 percent — report that the 2015 budget is slightly or significantly higher than 2014.
Despite the increased scrutiny on IT spending, IT budgets are growing in general, or taking a larger portion of the budget for many organizations. Developing regions such as Asia-Pacific and Central and South America are devoting more of the overall budget to IT. Emerging markets are also leading the way in terms of how the 2015 IT budget compares to 2014: 86 percent of organizations in Central and South America, 83 percent in India, 78 percent in Africa, and 75 percent in Asia-Pacific report that their 2015 budget is higher than in 2014.
Managing mobile users: a rising IT budget priority
The report also included IT budget priorities for 2015. Improving efficiency and business processes was a clear winner with 63 percent indicating it as a major priority, and more than 90 percent claiming it is either a medium or major priority. Increasing productivity through technology was a close second with 90 percent stating it is a medium or major priority, and 55 percent marking it as a major priority.
Both of those categories are higher priorities than they were in 2014. Many of the other categories, such as managing risk, or reducing IT costs, show little change. An area that is significantly a higher priority is managing mobile users and devices: this category shows an increase of nearly 40 percent compared to its ranking in 2014.
Other topics covered in the report include:
Planned implementations for 2015
IT initiatives planned for 2015
Percentage of overall corporate budget allocated to IT
Impact of current economic conditions on IT
How executive management ranks importance of IT budget compared to other business units