IT budgets for 2022 rise sharply
Companies and public authorities are investing a higher proportion of their IT budgets in modernization, while the proportionate expenditure on system maintenance is falling slightly. This is the finding of a study by Capgemini.
A study by Capgemini on next year's IT trends shows that IT budgets for 2022 will increase in many companies. However, the additional investments will not flow primarily into new developments, but into modernizations of existing system landscapes, according to one of the results of the study, in which 195 IT and specialist managers from large companies and public authorities from Germany, Austria and Switzerland took part in September and October 2021.
Three quarters of companies with higher IT budgets for 2022
In concrete figures: 73 percent of respondents expect IT budgets to increase in 2022, the highest figure since the survey began in 2003, according to the report. Just under a third of the study participants will even increase their IT investments by more than 10 percent in 2022, compared to only a fifth of respondents in the previous year. Some 11 percent will cut their IT spending, compared with just under 15 percent last year. The forecasts for 2023 are also very positive: just under 73 percent of respondents expect higher spending, and almost a third expect increases of more than 10 percent.
Economy on course for expansion
Nearly 83 percent of the company representatives surveyed said that their organization is expected to grow economically or organizationally in 2022. Only 10 percent have no plans for expansion and want to stabilize. Only 1.4 percent of companies are expected to become smaller. "IT plays a crucial role in the expansion plans of many organizations, as shown by the high level of investment in this area. Digitization and the use of intelligent systems are not only intended to generate competitive advantages. They also help to reduce greenhouse gas emissions and at the same time cushion demographic change and the shortage of skilled workers, for example by relieving employees of routine tasks," says Guido Kamann, Head of Capgemini in Switzerland, commenting on the findings.
More money for IT modernization
While almost 47 percent of the IT budget was spent on maintaining the existing system landscape in 2021, this figure will fall to just under 44 percent in the coming year, Capgemini's survey shows. Spending on new developments will also fall slightly, from around 26 percent in the previous year to 24 percent. Instead, companies and public authorities are planning to spend more money on modernization: The share of these investments in the total IT budget will rise from around 27 percent last year to just under 32 percent now. "We assume that in many cases the modernizations will be projects in which applications are made cloud-capable. Because in view of the high security and environmental standards, the wide range of services and the price-performance ratio, it is now worth modernizing older core applications and bringing them into the cloud," explains Guido Kamann.
IT as a competitive factor
And what about the financing of IT innovations? According to the study, this is now almost as likely to come from the business side as from the IT side. On the one hand, this shows that the core business of many companies is now based on IT. On the other hand, business decision-makers consider IT to be a competitive factor and initiate significantly more digital projects than in the past. In joint IT projects, however, the business and IT departments only work together as equals in around one in ten organizations. In all others, the main donor still has the greatest influence on decisions.
Source and further information: Capgemini
