New year, new tech: the rise of healthier IT spending

Matt Cloke at Endava explains how rising confidence and clarity are becoming catalysts for excellence in IT spending

 

The state of the economy has been far from an easy ride for businesses in the past few years. Against a backdrop of mass workforce layoffs, including the likes of Meta and Amazon last year, there’s no surprise that many have been cautious with their spending across the board.

 

This has also meant that investment in future-ready technologies has been held back, but despite a long period of stagnation, uncertainty in the state of the economy is gradually waning. In fact, amid steady signs of improvement with lower interest rates and inflation falling, a report from Endava shows that an overwhelming majority (81%) of business leaders surveyed across the globe are feeling optimistic about what lies ahead. 

 

This positive outlook is set to have a strong benefit on IT, as the same report reveals that approximately 75% of organisations expect their IT budgets to increase over the next 12 months and only 5% think theirs will decrease. Recent forecasts from Forrester also back this sentiment, projecting a 5.3% growth in technology spend for this year and a total global tech spend of $4.7 trillion for 2024. 

 

And it seems the shape of the economy isn’t the only reason for companies feeling more comfortable digging deeper into their pockets. Confidence also stems from a stronger vision of how the technology landscape will take shape – even while technologies like generative AI progress at pace. In fact, 90% of business leaders now declare they have a ‘clear understanding’ of the future direction of technology, regardless of the industry or company size. 

 

Greater investment can only be a good thing, opening the door to richer opportunities for companies to explore new markets and business models, as well as enabling them to hire additional skilled staff and mature their digital infrastructure. But even with this renewed hope, knowing how and where to invest in technology wisely will continue to set businesses apart while ensuring they get more bang for their buck. 

 

Investing in long-term gains 

When we look at business leaders’ ambitions right now for accelerating technology adoption, artificial intelligence (AI), big data, predictive analytics and 5G have all topped the priority list. Unsurprisingly, AI stands out as a high or very high priority for 80% of business leaders, with many sectors looking to capitalise on the opportunities to streamline operations and cut complexity.

 

However, amongst the excitement and promise of adopting the latest innovations, it can be easy for organisations to get distracted from the long-term impact of technologies or become too focused on the technology in isolation. 

 

In the case of AI, realising its full value potential relies on shifting from data-centric models to a more holistic view. This means thinking about how the entire business workflow can be improved and emphasising how people ultimately benefit from interactions across various touchpoints.

 

In doing so, organisations can shift from a singular view with limited impact to one that is multi-faceted and capable of building momentum. Likewise, regarding these technologies as singular projects reduces its potential – implementation needs to be viewed as a continuous and iterative effort to ensure the business can adapt to changing market conditions. 

 

Ultimately, transformational change can’t come at the expense of operational stability, and so it demands a careful balancing act. Not all trends will be suitable for every business, and so assessing their worth and projected impact over time is a hugely valuable step in making smart investments.

 

Challenging the status quo

Regardless of the specific technologies businesses choose to channel for their IT spending, it’s unlikely that going it alone will wield the greatest rewards. Despite having a clear sense of direction on future technology, leaders recognise this, expressing that they want assumptions to be challenged by technology partners.

 

Beyond the practical benefits of being able to respond quickly to any issues that arise, good partners can spot gaps in strategies and offer new perspectives. They actively collaborate to add value to investments, offer specialised expertise and maintain the integrity of technologies over time.

 

It’s not just about troubleshooting, taking workloads off internal teams, or even working in parallel with them. Technology partners can solve inherent problems with infrastructure and strategies. Relationships built on trust, transparency and collaboration between partners are therefore key to ensuring IT spend doesn’t go down the drain. 

 

Just as a one-size-fits-all approach isn’t effective for personal nutrition or training, a healthier business is born from bespoke IT strategies that account for pre-existing conditions and environmental influences. Companies all have unique cultures and a diverse set of employees, as well as nuanced needs, motivations, and behaviours.

 

As boosted IT budgets open greater opportunities for growth, those who make careful considerations of who, what and how they invest in technology acceleration will come out on top.

 

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Matt Cloke is CTO at Endava

 

Main image courtesy of iStockPhoto.com