IT 2017: Budgets Rebound and Confidence Grows in IT Leaders’ Ability to Support Organizational Demands
DEC. 6, 2016 | HANOVER, MD | For media inquiries, please contact us at media@TEKsystems.com.
TEKsystems survey finds IT leaders relinquishing responsibilities for decentralized IT; programmers and developers remain talent acquisition priority
TEKsystems®, a leading provider of IT staffing solutions, IT talent management expertise and IT services, today released its annual IT Forecast research. Rebounding from 2016, findings indicate a rise in expectations for budget increases, while difficulties in talent acquisition and organizational alignment persist. More than 700 IT leaders (i.e., chief information officers, IT vice presidents, IT directors, IT hiring managers) were polled in Oct. 2016 on their expectations for IT spending, skill needs and organizational challenges in 2017. See the full results here.
Key highlights from the survey include:
IT Budgets Rebound With Focus on IT and Overall Operations
|
Q: How do you expect your organization's 2017 IT budget to change compared to 2016? |
|||
|---|---|---|---|
|
|
2015 |
2016 |
2017 |
|
Increase |
45% |
37% |
49% |
|
Stay the same |
39% |
51% |
39% |
|
Decrease |
16% |
12% |
12% |
|
Q: Which functional area do you expect to spend the most on technology? (select one) |
||
|---|---|---|
|
Rank |
2016 |
2017 |
|
1 |
IT (42%) |
IT (48%) |
|
2 |
Marketing/sales (27%) |
Operations (29%) |
|
3 |
Operations (18%) |
Marketing/sales (7%) |
|
4 |
Finance/accounting (6%) |
Finance/accounting (5%) |
|
5 |
Human resources / legal (4%) |
Customer service (3%) |
|
6 |
Customer service (1%) |
Human resources / legal (2%) |
|
7 |
Other (2%) |
Other (6%) |
- TEKsystems’ Take: Approaching 2017, the majority of IT leaders (88 percent) expect their IT budget to increase or stay the same. In fact, those IT leaders expecting budget increases reached a three-year high of 49 percent, a rebound of 12 percent year over year. Interestingly, those expecting budgets to stay the same have decreased by 12 percent, indicating an overall positive shift. Seventy-seven percent of IT leaders say most of their organizations’ technology budget will go to IT and operations in 2017, with no other areas reaching double-digit investment. IT departments seem to be limiting their responsibilities to horizontal IT requirements that span across the business, such as information security and data integration. Considering the drop in marketing and sales from the year prior, many organizations seem to have reached a steady state and are opting to increase spending in core areas.
Ability to Satisfy Overall Organizational Demands at Three-Year High; Confidence Lessens Beyond Core IT
|
Q: How confident are you in your IT department's ability to satisfy overall organizational demands? |
|||
|---|---|---|---|
|
|
2015 |
2016 |
2017 |
|
Confident |
71% |
68% |
79% |
|
Neutral |
20% |
23% |
13% |
|
Unconfident |
9% |
9% |
8% |
|
Q: How confident are you in your IT department's ability to satisfy and support each of the following types of demands? |
||||||
|---|---|---|---|---|---|---|
|
|
Core IT* |
Line of business* |
New initiatives |
|||
|
|
2016 |
2017 |
2016 |
2017 |
2016 |
2017 |
|
Confident |
75% |
86% |
60% |
76% |
54% |
59% |
|
Neutral |
16% |
9% |
30% |
17% |
24% |
26% |
|
Unconfident |
9% |
5% |
10% |
7% |
22% |
15% |
|
*Overall organizational demands comprise core IT and line of business demands |
||||||
- TEKsystems’ Take: IT leader overall confidence is at a three-year high, reflecting the same trend as budget increases. Also similar to trends in budgeting, neutrality declined (10 percent), while confidence increased by a near similar percentage (11 percent). The root cause of increased confidence is not clear, but can perhaps be explained by a lessened responsibility for decentralized projects or a maturation of the ability for outside groups to perform IT functions. For segmented confidence levels—meaning, core IT, line-of-business (LOB) demands and new initiatives—confidence levels are up across the board, though lessen as initiatives move beyond core IT. Eighty-six percent expressed confidence in the IT department’s ability to satisfy core IT demands (up 11 percent), 76 percent in LOB demands (up 16 percent) and 59 percent in new initiatives (up 5 percent). It appears while IT will remain accountable for technology areas that cross over throughout the business (e.g., security), ownership of activities beyond initial implementation of systems will shift to the respective business functions.
Organizational Alignment Remains a Top Challenge
|
Q: What will provide the biggest challenge to your organization meeting its goals and objectives? |
|
|---|---|
|
Organizational alignment (e.g., shared knowledge, understanding of goals and ability to interact and communicate) |
32% |
|
Skills (e.g., required skills and understanding of relevant business drivers and technology) |
19% |
|
Governance (e.g., IT alignment with business strategy and appropriate resource allocation) |
16% |
|
Scope and architecture (e.g., IT integration within the company and adaptability to business needs) |
16% |
|
Competency/value measurements (e.g., ability to fulfill requirements and measure return on investment) |
12% |
|
Partnerships (e.g., managing external perceptions and creating shared risks and rewards) |
5% |
- TEKsystems’ Take: By far, organizational alignment, or how well IT and other areas of the business staff understand and coordinate with each other, continues to be cited by IT leaders (32 percent) as the biggest challenge organizations will face when trying to achieve 2017 goals, with no other area reaching even 20 percent. Based on survey findings, this is not surprising and could be directly related to the decentralization of technology spending, the diffused ownership of IT projects, and resulting pull-back from central IT staff. With technology investments being made beyond the IT department itself, the IT team and IT leaders specifically lose visibility into what others in the organization are doing, making it difficult to connect efficiently and understand each department’s goals.
Security, Cloud, Business Intelligence / Big Data and Mobility Will Continue to See Increased Investment, Yet Mobility Falls in Impact
|
Q: How do you expect spending to change in the following areas in 2017 versus 2016? (percent of IT leaders expecting increases) |
|||
|---|---|---|---|
|
|
2015 |
2016 |
2017 |
|
Security |
65% |
66% |
65% |
|
Cloud |
53% |
48% |
60% |
|
Business intelligence / big data |
49% |
41% |
50% |
|
Mobility |
54% |
51% |
50% |
|
Q: Which of the following will have the biggest impact on your organization? |
|||
|---|---|---|---|
|
Rank |
2015 |
2016 |
2017 |
|
1 |
Security (52%) |
Security (47%) |
Security (46%) |
|
2 |
Business intelligence / big data (41%) |
Business intelligence / big data (31%) |
Cloud computing (38%) |
|
3 |
Mobility (36%) |
Networking (30%) |
Business intelligence / big data (28%) |
|
4 |
Enterprise resource planning (31%) |
Cloud computing (26%) |
Digital / customer experience (26%) |
|
5 |
Cloud computing (29%) |
Mobility (26%) |
Enterprise resource planning (21%) |
- TEKsystems’ Take: In terms of impact, the core four—security, cloud, business intelligence (BI) and mobility—have now become the big three (i.e., security, cloud and BI). IT leaders anticipate that information security (46 percent), cloud computing (38 percent) and BI/big data (28 percent) will have the biggest impact on their business, with mobility dropping out of the top five to No. 7 (19 percent). IT leaders appear to be planning to allocate increases to these areas as a result, with at least 50 percent anticipating increased spending in security, cloud, BI / big data and mobility.
Programmers and Developers Remain Most Critical Skill Set and Most Difficult to Find
|
Q: Which IT roles are the absolute most critical for enabling your organization to achieve success in 2017?* (stack rank the top three) |
|||
|---|---|---|---|
|
Rank |
2015 |
2016 |
2017 |
|
1 |
IT managers (48%) |
Programmers and developers (41%) |
Programmers and developers (42%) |
|
2 |
Project managers (45%) |
IT managers (34%) |
Project managers (32%) |
|
3 |
Programmers and developers (43%) |
Project managers (30%) |
Networking (32%) |
|
4 |
VP and director-level leaders (35%) |
Networking (29%) |
Software engineers (30%) |
|
5 |
Help desk / technical support (29%) |
Business analysts (28%) |
IT managers (24%) |
|
*Positions that have been in the top five for three years running are bolded |
|||
|
Q: How difficult is it currently to find exceptional talent to fill roles for the following types of IT-related positions?* (stack rank the top three) |
|||
|---|---|---|---|
|
Rank |
2015 |
2016 |
2017 |
|
1 |
Programmers and developers (44%) |
Programmers and developers (65%) |
Programmers and developers (42%) |
|
2 |
Software engineers (35%) |
Security (45%) |
Networking (29%) |
|
3 |
Architects (34%) |
Software engineers (42%) |
Security (28%) |
|
4 |
Project managers (33%) |
Database administrators (39%) |
Architects (28%) |
|
5 |
Security (32%) |
Project managers (38%) |
Software engineers (27%) |
|
*Positions that have been in the top five for three years running are bolded |
|||
- TEKsystems’ Take: Programmers and developers prevail as the most critical skill set year over year, with more than 40 percent of IT leaders consistently placing them in the top rankings. Although exceptional programmers and developers continue a long-term trend of being the most difficult to find, the percentage of IT leaders who feel this way has declined by 23 percent in the last year. In terms of critical roles, project managers and IT managers remain in the top five, indicating organizations are continuing to plan and develop new initiatives while completing others. In terms of difficulty, security and software engineers, though declining year over year, have also remained one of the most difficult to find for three years running. Overall, outside of programmers and developers, normalization seems to have taken place where critical skill sets have become equally difficult to find.
Salaries and Hiring Will Continue to Rise, but at Slower Growth Rates
|
Q: How do you expect salaries to change overall in 2017? |
|
|---|---|
|
|
2017 |
|
Increase |
36% |
|
Stay the same |
63% |
|
Decrease |
1% |
|
Q: How do you expect your IT staff's salaries to change in 2017 versus 2016 for the following skill sets and technologies? (percent expecting increases) |
|||
|---|---|---|---|
|
Skills/technologies |
2015 |
2016 |
2017 |
|
Programmers and developers |
54% |
53% |
50% |
|
Software engineers |
51% |
47% |
47% |
|
Security |
54% |
50% |
45% |
|
Cloud |
42% |
52% |
43% |
|
Architects |
48% |
47% |
42% |
- TEKsystems’ Take: On average, approximately one-third (36 percent) of IT leaders expect to increase salaries in 2017. This is quite low, and could stand in the way of companies trying to attract IT talent. As such, IT leaders will need to devote salary increases to key areas—programmers and developers, software engineers, security and cloud experts and architects. Interestingly, programmers and developers are the only area where at least 50 percent of IT leaders are expecting salary increases. It appears the IT segment is suffering a degree of wage stagnation.
IT Staff Makeup Will Remain Consistent; Managed Services and Staff Augmentation Set to Increase
|
Q: How much do you expect hiring to change for the following in 2017 versus 2016? |
|||
|---|---|---|---|
|
Full-time IT staff |
2015 |
2016 |
2017 |
|
Increase |
40% |
43% |
45% |
|
Stay the same |
50% |
47% |
47% |
|
Decrease |
10% |
10% |
8% |
|
Contingent IT staff |
2015 |
2016 |
2017 |
|
Increase |
36% |
41% |
43% |
|
Stay the same |
54% |
51% |
44% |
|
Decrease |
10% |
8% |
13% |
|
Q: What is the approximate makeup of your current IT department? |
|||
|---|---|---|---|
|
|
2015 |
2016 |
2017 |
|
Full-time IT staff |
77% |
80% |
76% |
|
Contingent IT staff |
23% |
20% |
24% |
|
Q: How do you expect spending to change for the following next year? |
|||
|---|---|---|---|
|
|
2015 |
2016 |
2017 |
|
Managed, project-based or SOW* services |
|
|
|
|
Increase |
38% |
31% |
43% |
|
Stay the same |
51% |
61% |
52% |
|
Decrease |
12% |
8% |
5% |
|
Staff augmentation services |
|
|
|
|
Increase |
39% |
38% |
43% |
|
Stay the same |
47% |
55% |
40% |
|
Decrease |
14% |
7% |
17% |
|
Training / professional development |
|
|
|
|
Increase |
39% |
40% |
34% |
|
Stay the same |
52% |
45% |
56% |
|
Decrease |
9% |
15% |
10% |
|
Outsourcing |
|
|
|
|
Increase |
33% |
37% |
29% |
|
Stay the same |
57% |
53% |
57% |
|
Decrease |
11% |
10% |
14% |
|
*Statement of work |
|||
- TEKsystems’ Take: Continuing on the note of cautious optimism and increased investment in technology, hiring expectations for both full-time roles and contingent staff have increased steadily since 2015, with 2 percent bumps for each compared to last year. The percentage of full-time versus contingent staff remains consistent over the same time period, with a slight rebalancing back toward contingent staff, an increase of 4 percent from 2016. In terms of changes in delivery and sourcing expectations, managed services and SOW-based work experienced the largest increase, with 43 percent of IT leaders expecting to grow their spending in that segment. While spending on staff augmentation is expected to increase by 5 percent, it is of note that training/professional development and outsourcing spending are tapering off, with more IT leaders expecting to keep their budgets in those areas at current levels than in 2016. This is likely driven by the increasing maturity of technology investments, the increased difficulty in finding exceptional talent and a growing desire to increase insight into and control of projects with partners.
“Overall the picture looks good for tech heading into 2017. Budgets are up and IT departments are expecting to be able to support overall organizational demands at a high level while also being able to support business growth,” says TEKsystems Research Manager Jason Hayman. “It appears that some of the heavy lifting in helping other departments realize some larger scale digital transformation is over and they can concentrate on preparing for the next stages of development within their organizations. This may contribute to the shift in more staff augmentation and managed services as a labor model, where they have the ability to control and have oversight on more of their application development and project management than before.”
TEKsystems’ Jason Hayman is available for additional commentary. For more information about the survey, or to schedule an interview, please contact Nathan Bowen at nabowen@TEKsystems.com.
About TEKsystems
People are at the heart of every successful business initiative. At TEKsystems, an Allegis Group company, we understand people. Every year we deploy more than 80,000 IT professionals at 6,000 client sites across North America, Europe and Asia. Our deep insights into IT human capital management enable us to help our clients achieve their business goals–while optimizing their IT workforce strategies. We provide IT staffing solutions and IT services to help our clients plan, build and run their critical business initiatives. Through our range of quality-focused delivery models, we meet our clients where they are, and take them where they want to go, the way they want to get there.