CIOs expect IT budget to grow 5.1% in 2023: Gartner

Chief information officers (CIOs) expect IT budgets to increase 5.1% on average in 2023, lower than the projected 6.5% global inflation rate, according to a new report by analyst firm Gartner.

The analyst firm noted that CIOs’ top areas of increased investment for 2023 include cyber and information security (66%), business intelligence/data analytics (55%) and cloud platforms (50%). However, just 32% are increasing investment in artificial intelligence (AI) and 24% in hyper-automation.

Also, nearly 95% of organisations struggle with developing a vision for digital change, often due to competing expectations from different stakeholders, noted Gartner.

To drive financial outcomes, CIOs must reconcile siloed initiatives by using a visual metrics hierarchy to communicate and demonstrate interdependencies across related digital initiatives.

CIOs should connect with functional leaders for each digital initiative to understand what ‘improvement’ means and how it can be measured.

“A key ingredient needed to accelerate delivery of digital benefits is accountability,” said Rowsell-Jones. “For example, if the enterprise undertakes a digital initiative to improve customer experience, with the financial goal of improving profit margins, then the CIO’s accountable partner is likely the CMO.”

While strategic engagement with business unit leaders is necessary to accelerate digital initiatives, the survey exposed an IT mind-set of “go it alone” regarding solution delivery. For example, 77% of CIOs said that IT employees are primarily providing innovation and collaboration tools, compared with 18 % who said non-IT personnel are providing these tools.

Gartner also saw many CIOs continue to struggle to hire and retain IT talent to accelerate digital initiatives. However, the survey identified numerous sources of technology talent that are untapped. For example, only 12% of enterprises use students (through internships and relationships with schools) to help develop technological capabilities and only 23% use gig workers.

“Talent shortages is also another big hindrance to digital,” said Sanchez Reina, VP analyst at Gartner. “CIOs are often limited by policies related to preferred providers or employment contracts. They must stress to business and HR leadership that engaging unconventional talent sources can help accelerate the realisation of digital dividends.”