Despite the rocky economic climate in 2020, IT leaders expect a 2.0% increase, on average, in the IT budget for 2021, according to the Gartner CIO Agenda. And they’re not deluding themselves. Boards of directors plan to increase spending on IT and technology by an average of 6.9% across the enterprise.
At top organizations, CIOs face fewer constraints, with 28% saying that they have secured additional funding
The investment makes sense, as organizational leaders intend to spend more resources more rapidly on digital acceleration to better adapt to the changing economic conditions caused by the pandemic. Despite the uncertainty created by COVID-19, top performers seized an opportunity to lean into the shift resulting from the pandemic and increase funding for digital innovation. They invested more quickly, and those investments mattered. Organizations that increased funding of digital innovation are 2.7 times more likely to be a top performer than a trailing one.
However, looking into the future, the gap starts to close for 2021 planning, with 69% of top performers planning to increase digital innovation funding compared to close to 68% of typical performers.
Even more telling is what differentiates the process of gaining additional IT funds in top versus trailing organizations. At top organizations, CIOs face fewer constraints, with 28% saying that they have secured additional funding specifically to support more experimentation/risk-taking in IT. That number is closer to 19% for trailing organizations.
What CIOs can do
Ensure that IT’s initiatives align with digital business acceleration and draft business cases around digital channels. Look for back-office projects for finance, marketing or HR that can be put on the back burner to reallocate funding to digital innovation.