Society for Information Management (SIM) through their annual CIO survey has come out with some conclusion about IT spending in 2012, along with some possible projections for the year 2013. The survey says that in the upcoming year (2013), Chief Information Officers (CIO) will be more inclined to spending on outsourcing, rather than on hardware and IT consultants.
Report was presented in a group’s conference conducted in Grapevine, TX. The conference session lasted for three days from October 28-30, 2012.
Major Findings concluded in the report
- Productivity and Cost ReductionProductivity and cost reduction are the top concerns for CIO’s in 2012. Business alignment, agility, cost cutting and, revenue generation are other factors in the queue.
- Top applications – 2012Top applications for the year 2012 as per the CIO’s.
- Business intelligence
- Customer relationship management
- Cloud computing
- Enterprise resource planning
IT budgets Reviews (2011 and 2012)
47.9 % of CIOs says that their IT budgets are high from 2011 to 2012. 34.5% CIO’s viewed that their IT budgets for 2012 are comparatively lower than 2011. Rest of the CIO’s saw IT budgets for both the years (2011 and 2012) as almost same.
IT budgets –2013
45.8 % of CIOs are expecting an increase in IT budgets for the year 2013. 21.8% of the CIO’s have a positive feeling that their budgets will come down by 2013. Remaining 32.4% of the CIO’s expects their budgets for 2012 and 2013 to be equal.
Interesting trends on actual budget allocations
Some interesting trends on the actual budget allocations from CIOs:
- Spending on consulting services – 9% in 2012, 11% in 2011 and 10% in 2010
- Spending on in-house hardware, network, software and facilities – 24% in 2012, 32% in 2011 32% in 2010
- Spending on internal staff – 33% in 2012, 38% in 2011 and 43% in 2010
- 17% of the actual IT budget in 2012 was spent on outsourcing. In case of domestic staff, outsourced spending is about 8% of the budget.
- Year 2013 expects a fall in the budget for hardware spending, consultants, and internal staff. Percentage figure for outsourcing is expected to jump to 23 percent in 2013 from the recent figure of 17 percent in 2012.
- In 2012, India had spent 43 percent for offshore outsourcing; where as Western EU spent 13%, Philippines, 12%, and Mexico, 5%.
- For internal cloud computing, 5% of the IT budget was allocated in 2012. In case of external cloud providers, the budget allocated for the year 2012 is 4%. Both the figures are lower than that was allocated in 2011.
- Moreover, corporations allocated 4.94 percent of sales to the IT budget and staff turnover rate in 2012 was only 5.23%. For education and training, IT budget allocated is 2.99%.
All the facts mentioned above strengthens the fact that CIO’s will be concentrating more on outsourcing in the upcoming year.