IT Spending Expected To Pick Up In 2017

Posted by on December 20, 2016

TEKsystems research finds many IT leaders have a positive outlook on next year with a focus on cloud and security.

Last year, many IT leaders didn’t have high hopes their budgets would grow in 2016. But as they look ahead to 2017, optimism has taken hold, at least according to a recent report by staffing and IT services firm TEKsystems.

The company polled more than 700 North American IT leaders, including CIOs, VPs, directors, and hiring managers across a range of industries and found that 49% expect their IT budget to increase next year while 39% expect IT spending to stay the same. Last year, a similar survey by TEKsystems found that only 37% expected their IT budgets to grow while 51% expected flat budgets.

“Perhaps organizations are more willing to make technology investments next year as a necessity to remaining competitive,” the company said in its annual IT Forecast report, noting that only 12% of IT leaders surveyed plan to decrease their budget in 2017.

Only a small portion of technology spending will go to areas outside of IT and operations such as marketing and finance, according to the report.

So what are enterprises planning to spend more on next year? According to TEKsystems, the big three focus areas of 2016 remain high up on the list of priorities for businesses in 2017: security, cloud, and business intelligence/big data. While 48% cited cloud as a spending priority for 2016, even more (60%) listed it as a focus for next year.

Other spending priorities include mobility (50%), legacy modernization (45%), virtualization/software-defined networks (43%), and data center consolidation (38%).

IT roles and staffing

Networking ranked high on the list of IT roles IT leaders see as most critical to enabling their organizations to succeed next year, according to TEKsystems. In fact, it climbed to No. 3 in the ranking, up from No. 4 last year. Programmers and developers retained their No. 1 ranking from last year’s survey.

The study also showed that IT leaders view networking skills as among the hardest to find. Twenty-nine percent of those polled said it’s hard to fill networking positions, making it the second-most difficult role to fill after programmers and developers (42%), according to the survey.

What might make it more difficult for organizations to fill these roles is the lack of plans for salary increases next year, the report indicates. Only 36% of those surveyed expect to increase salaries in 2017. Anticipated increases are down in nearly every IT role, according to the research.

“This is quite low, and could stand in the way of companies trying to attract IT talent. Given the competitiveness of the IT labor market, it is important for companies to evaluate the compensation packages they offer IT talent,” TEKsystems said in its report. “Many organizations are relying on rate cards from several years ago, and the IT segment is suffering a degree of wage stagnation.”

Forty-five percent of those polled expect their full-time staff hiring to increase in 2017 while 43% expect an increase in contingent staffing. The survey also revealed that the number of organizations planning to spend more on managed services was up 43% compared to 31% last year. At the same time, only 34% plan to spend more on training and development, down from 40%.

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Originally posted on Network Computing on 12/12/2016.