Enterprise IT Budgets Surging, Becoming Key Business Growth Driver

Enterprise information technology budgets have increased significantly this year, with IT emerging as one of the main drivers of business value, according to new research from analyst firm Omdia.

Omdia's 10th annual IT Enterprise Insights study surveyed more than 6,500 global IT executives across 56 countries and 16 sectors on their organizations' tech investment plans. The survey found that enterprise leaders are prioritizing IT investment more than ever before, viewing it as critical to increasing efficiency, driving growth, and creating competitive advantage.

Key report findings include the following:

"Given the focus on IT driving value in the enterprise we've seen accelerate after COVID, I wasn't surprised to see the majority of IT departments expecting an increase in their budgets," Cem Nurkan, research director for enterprise IT at Omdia, told ITPro Today. "What was surprising was the level and breadth of this increase, across all geographies, verticals, and demographics." 

Where IT Budgets Are Growing

When looking at IT department priorities within enterprises, the top business priority is increasing operating efficiency. This finding highlights the fact that companies are counting on technology to help optimize processes, reduce costs, and improve productivity.

Nurkan-Omdia

On the IT side, managing security, identity, and privacy topped the list of priorities. This signals that cybersecurity and data privacy are front of mind for IT leaders as they map out budgets and strategy.

Nurkan noted that all regions saw an increase in expected budget growth.

"As a mean [average], the data shows that most developing markets trend closer to 80%, whereas more mature markets trend closer to 70%," he said. "These are fantastic numbers and go to show the increasing pace of change and innovation across the globe."

Looking at the drivers behind the increase in IT spending, Nurkan sees "value" as the main reason.

"It is clear that, as a consequence of the pandemic, senior stakeholders in enterprise saw the value that IT could bring them," he said. "Value in developing and optimizing go-to-market initiatives. Value in changing and enabling new business processes. Executives saw it was possible and now want more, adding fuel to the digital evolution journey of enterprises."

Nurkan added that the survey clearly shows that the two main technology priorities for enterprises are business platforms and technology platforms to drive that value increase and optimization.

AI Investment Accelerating, but Spending Lagging

While development of generative AI is rapidly accelerating, investment in enterprise AI solutions remains relatively low for many industries. This is expected to change quickly, however, as companies move AI projects from pilot programs into production.

Vendors are launching more GenAI products, and wider adoption is anticipated across sectors. Current enterprise spend levels do not yet reflect this AI boom, though that could be changing.

"One great outstanding question will be the actual impact of generative AI on the budget line," Nurkan said. "There will be growth for sure, but how much of that will be taken by baked-in solutions in existing products, as opposed to pure-play generative AI offerings?"