TEKsystems: Organizations Lean-In Ready to Innovate and Transform in 2019
Dec. 11, 2018 | HANOVER, MD
Yearly TEKsystems IT Forecast Survey Finds IT Departments are Gearing up and Strategizing for Breakthrough Initiatives
TEKsystems® a provider of IT services that address the pressing strategy, implementation and talent needs for more than 80% of the Fortune 500, today released findings from its annual IT Forecast research. While 2018 proved to be a year when most organizations explored how to implement IT initiatives, 2019 will be the year they enter the execution phase of these strategies to take advantage of new opportunities. In addition to increasing IT budgets, organizations are strategizing around the additional assets and support necessary to move digital projects to the next phase during the coming year.
IT leaders (chief information officers, IT vice presidents, IT directors, IT hiring managers) across every major industry were polled in late 2018 on a range of key issues, including IT budgets, expertise and talent, and expected organizational challenges throughout 2019.
Key highlights from the survey include:
Expectations for Increases in IT Budgets Surge
| Q: Do you expect your organization’s IT budget in the coming year to increase, decrease or stay the same compared to the current year? | ||
| 2018 | 2019 | |
| Increase | 40% | 57% |
| Stay the same | 44% | 18% |
| Decrease | 16% | 25% |
TEKsystems’ Take: Heading into 2019, the percentage of IT leaders that anticipate an increase in IT budgets is at its highest level since 2014, at which time 62 percent expected increases. In recent years, enterprise IT budgets have eroded as “shadow IT deployments” and the democratization of technology spend became the norm, where technology purchase decisions were made by line-of-business functions. We may have now reached a tipping point where enterprise IT is ramping up efforts to create a strong foundation that will enable the business to drive new initiatives and leverage emerging technologies.
New Initiatives Appear Ready to Take Off
| 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 | ||||
| 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | |
| Confident | 76% | 78% | 72% | 77% | 59% | 64% |
| Neutral | 15% | 14% | 18% | 14% | 26% | 16% |
| Unconfident | 9% | 8% | 10% | 9% | 15% | 20% |
TEKsystems’ Take: Although confidence in IT’s ability to support core IT demands in 2019 is expected to remain steady, confidence will increase in the ability to satisfy line-of-business (+5 percent) and new-initiative (+6 percent) demands. Centralized IT will continue the work of maintaining existing applications, services and IT infrastructure—areas where they have proven experience and capabilities. With respect to new initiatives (many of which are expected to take place in differing lines of business), IT executives must determine which elements they will seek from external providers and which they will manage internally. Organizations aspiring to develop internal competencies via new training and development programs should understand that there is a long lead time associated with cultivating these programs. As a result, they may choose to speed ROI by considering externally provided training and professional development resources and programs.
Security, Cloud, Mobile, Big Data and DevOps Likely to Drive Line of Business and New Initiatives
| Q: At what stage do you expect your organization to be with regard to the following initiatives in 2019? [select only one] | |||||
| Nothing Planned for Foreseeable Future (0-12 months) | Interested / Planning Stage (Expect to Take Action Within Next 12–24 Months) | Implementation Phase (Pilot, Advanced Pilot, Evaluation/Refinement) | |||
| Security | 10% | 11% | 79% | ||
| Cloud computing | 16% | 11% | 73% | ||
| Mobile applications | 17% | 12% | 71% | ||
| Agile and scrum | 26% | 11% | 63% | ||
| Big Data / Analytics | 22% | 20% | 58% | ||
| DevOps | 28% | 28% | 44% | ||
| IoT | 34% | 29% | 37% | ||
| AI | 40% | 23% | 37% | ||
| Machine learning | 41% | 25% | 34% | ||
| Software-defined networking (SDN) | 49% | 18% | 33% | ||
| Robotic process automation (RPA) | 56% | 13% | 31% | ||
| Augmented reality / virtual reality (AR/VR) | 61% | 12% | 27% | ||
| Blockchain | 66% | 16% | 18% | ||
TEKsystems’ Take: Organizations continue to solidify their core in 2019 as they build a foundation for emerging technologies. Business needs of velocity and agility are pushing IT to implement technologies that will enable transformation. Organizations expect to push cloud initiatives forward in 2019, with 73 percent moving into the implementation phase versus 62 percent in 2018. Mobile and Big Data / Analytics also take a leap forward in 2019, with more than 70 percent of organizations implementing these initiatives. Interestingly, compared to last year, a significant percentage of leaders have shifted from no plans for the foreseeable future to introducing emerging technologies, including AI, IoT and AR/VR (14 percent, 12 percent and 8 percent differences, respectively).
Creating New Products and Services Leaps in Priority While Organizational Alignment Identified as Main Hurdle
| Q: Which three of the following business objectives will IT most need to support in the coming year? | ||
| 2018 (Previous Rank) | 2019 | |
| Improving existing IT applications and infrastructure | 31% (3) | 37% |
| Implementing new IT applications and infrastructure | 33% (2) | 33% |
| Creating new products and services (i.e., innovation) | 23% (6) | 29% |
| Improving efficiency | 35% (1) | 28% |
| Reducing costs | 24% (5) | 27% |
| Improving business processes | 30% (4) | 27% |
| Increasing growth (revenue, profits) | 19% (8/9T) | 23% |
| Attracting, developing and retaining talent | 19% (8/9T) | 21% |
| Delivering operational results (i.e., keeping the lights on) Implementing analytics and big data | 20% (7) | 20% |
| Implementing analytics and big data | 18% (10) | 17% |
| Managing risk | 17% (11) | 17% |
| Attracting and retaining new customers / customer experience (CX) | 12% (12) | 13% |
| Q: What will provide the biggest challenge to your organization meeting its goals and objectives? | ||
| 2018 (Previous Rank) | 2019 | |
| Organizational alignment: how well the IT and business staff understand each other, do they connect/interact easily, frequently and efficiently (e.g., knowledge sharing, understanding of goals, etc.) | 33% (1) | 29% |
| Governance: IT projects flow from an understanding of the business strategy, support business strategy, with resources and budgets allocated and prioritized appropriately | 17% (3) | 20% |
| Skills: the staff has the skills needed to be effective, understands business drivers and can speak the language of the business, business staff understands relevant technology concepts (e.g., innovation, training, leadership, etc.) | 20% (2) | 20% |
| Scope & architecture: IT has evolved past merely business support, helping the business grow, compete and profit (e.g., IT is well integrated within the company, flexibility/agility to respond to changing business needs) | 9% (5) | 13% |
| Competency / value measurements: how well does the company measure its own performance and value of projects (e.g., IT metrics, contributions to revenue/profitability measured/tracked, project post-mortems, etc.) | 12% (4) | 11% |
| Partnerships (e.g., managing perceptions, sharing goals/risks/rewards, seat at the table, etc.) | 7% (6) | 5% |
| Other | 1% (7) | 1% |
TEKsystems’ Take: 2019 could be the year of innovation in IT as core IT teams aim to deliver new products and services as well as implement new IT applications and infrastructures. TEKsystems notes that IT departments will also be under pressure to improve existing IT applications and infrastructure while reducing costs and increasing growth. TEKsystems believes the key to achieving these objectives will be developing technology capable of delivering the right solutions for the business, noting that organizational alignment is still the top factor when it comes to meeting goals and objectives. Governance as well as scope and architecture are higher on IT executives’ radar as areas for concern when it comes to meeting goals and objectives in 2019. TEKsystems believes this is logical now that IT department activities are more focused on the initial execution versus planning stages.
Cloud Expertise Will Be the Holy Grail in Talent Along with DevOps, Security and Data Analytics
| Q: How difficult is it currently to find exceptional talent to fill roles for the following types of IT-related positions? | ||
| 2019 | Change from 2018 |
|
| Software engineers/developers | 44% | +1% |
| Security (i.e., cyber, information, data) | 31% | +2% |
| Data analytics (i.e., data scientists, DBAs, Big Data, BI) | 29% | 0% |
| Cloud | 26% | +8% |
| Business/systems analysts | 24% | –1% |
| Networking (i.e., storage, virtualization, data center, etc.) | 23% | +2% |
| Architects | 20% | –8% |
| DevOps | 20% | *NA |
| Project managers | 18% | –4% |
| Help desk / technical support | 13% | –4% |
| Mobile | 11% | +1% |
| Trainers / instructors (i.e., software/technical, scrum masters, agility coaches, etc.) | 6% | –4% |
| Quality assurance / testing | 6% | –8% |
* In 2018, Software Engineer category included DevOps
TEKsystems’ Take: As noted, cloud initiatives moving to the implementation phase surged heading into 2019, so it should be expected that difficulty in locating cloud expertise would increase the most. Those skills, along with software engineering, security and data analytics, will be in high demand in 2019 as IT departments embark on the path toward project execution. TEKsystems notes that IT architects will not be as highly sought after as they had been in 2018, which further supports the trend of organizations moving beyond the planning stages on key IT initiatives in 2019.
Organizations Will Look Externally for Managed Project and Training and Professional Development Services; Outsourcing and Staff Augmentation Remain Unchanged
| Q. How do you expect your organization's spending to change for the coming year? | ||||||
| Increase | Stay the same | Decrease | ||||
| Area | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 |
| Staff Augmentation | 49% | 48% | 36% | 38% | 14% | 15% |
| Training / Professional Development | 37% | 48% | 53% | 40% | 10% | 12% |
| Managed / Project or SOW IT Services | 47% | 52% | 43% | 40% | 10% | 8% |
| Outsourcing | 35% | 35% | 50% | 51% | 15% | 14% |
TEKsystems’ Take: The scope and complexity of technology calls for organizations to forge partnerships with experts that can help bring their initiatives to life. Organizations expect to increase spending on project-based IT services and training and maintain their spend on outsourcing and talent-based services. A successful technology implementation is rarely an “either/or” approach. In most cases, organizations will need a tailored solution that leverages different types of services that best fit their needs.
“2019 could signal the start of an upswing with greater technology spend, driven by increased focus on emerging technologies that require updates to the technology landscape that have been previously postponed. While IT and business alignment continue to be a challenge, confidence is relatively high. But some of that confidence could be misplaced if IT continues to face headwinds from technical debt and gets bogged down in a cycle of maintaining and sustaining legacy systems,” says Jason Hayman, TEKsystems’ research manager. “Organizations will leverage cloud-based platforms as a springboard for next-gen technologies and continue to build a foundation that enables digital transformation throughout the enterprise.”
TEKsystems’ Jason Hayman is available for additional commentary. For more information about the survey or to schedule an interview, please contact teksystems@teamlewis.com.
About TEKsystems®
We’re partners in transformation. We help clients activate ideas and solutions to take advantage of a new world of opportunity. We are a team of 80,000 strong, working with over 6,000 clients, including 80% of the Fortune 500, across North America, Europe and Asia. As an industry leader in Full-Stack Technology Services, Talent Services and real-world application, we work with progressive leaders to drive change. That’s the power of true partnership. TEKsystems is an Allegis Group company.
