docs.media.bitpipe.com io 10x io 102267 item 604733 2012 it budget benchmark research

7/27/2019 Docs.media.bitpipe.com Io 10x Io 102267 Item 604733 2012 IT Budget Benchmark Research

1/14

CEB CIO Executive Board

Findings from the 2012-2013

IT Budget Benchmark

11 October 2012


2/14

A FrAmework For member ConversAtions

The mission o The Corporate Executive Board Company and its aliates (CEB) is to create revolutionary economic advantage or leaders o the worlds great enterprises by enabling

them to act with unparalleled intelligence and confdence. We lit their perormance at key decision points and career moments by delivering insight drawn rom the most powerul

global executive and proessional network. When we bring leaders together, it is crucial that our discussions neither restrict competition nor improperly share inside inormation. All other

conversations are welcomed and encouraged. We look orward to the continued and robust sharing o insights by member executives and proessionals at CEB events.

Copies And Copyright

As always, members are welcome to an unlimited number o copies o the materials contained within this handout or their internal business purposes. Distribution o the materials

to third parties (including independent contractors and consultants) requires the advance permission o The Corporate Executive Board Company (CEB). The pages herein are the

intellectual property o CEB, and CEB requires that members retain the copyright mark on all pages reproduced.

LegAL CAveAt

The Corporate Executive Board Company (CEB) has worked to ensure the accuracy o the inormation it provides to its members. This report relies upon data obtained rom many

sources, however, and CEB cannot guarantee the accuracy o the inormation or its analysis in all cases. Furthermore, CEB is not engaged in rendering legal, accounting, or other

proessional services. CEB reports should not be construed as proessional advice on any particular set o acts or circumstances. Members requiring such services are advised to consult

an appropriate proessional. Neither CEB nor its programs are responsible or any claims or losses that may arise rom a) any errors or omissions in their reports, whether caused by CEB

or its sources, or b) reliance on any recommendation made by CEB.


3/14

10

2012 The Corporate Executive Board Company.

All Rights Reserved. CIO4133412SYN

MODEST FORECAST FOR 2013

Median Change in Total IT Expenditure from the Previous Year

By Region, 2011-2013(E)

After several years of

large annual budget

growth, ITs forecast for

2013 growth is modest.

Previous, more substantial

increases in IT expenditure

arose as IT organizations

addressed the backlog o

projects that built up during

the recession.

This modest increase in IT

expenditure or 2013 (1.8%

at the median) is wholly

driven by expected increases

in operating expenditure

(2.5%) as capital expendituregrowth remains fat (0%).

2011 2012 2013(E)

North America

Europe

Asia-Pacic

Note: Total IT expenditure includes IT operating expenditure, depreciation/amort ization , and IT capital expenditure.

-5%

0%

5%

10%

15%

20%

25%

30%

Source: CEB CIO Executive Board 2011-2012 and 20122013 IT Budget Benchmarking Survey.

n = 183. n = 177.n = 180.


4/14

11



CAPEX FLATTENS AFTER A YEAR OF INVESTMENT

Median Change in IT Capital Expenditure from the Previous Year

By Region, 2009-2013(E)

Percentage of Organizations Changing IT Capital Expenditure from the Previous Year

2009-2013(E)

Following a large

increase in capital

expenditures from

2011 to 2012 (9.7% at

the median), CIOs are

expecting to maintain

capex spending atcurrent levels, with an

expected growth rate of

0% for 2013.

These fat expectations

are consistent across

geographies.

The retail industry is the

only sector that is projecting

growth in IT capital budgets

or 2013; a modest 1.7%.

The utilities sector

reports the largest

expected decrease in IT

capital budgets or 2013,

anticipating a 12.0% decline

in capex spending, at the

median.

Greater than 10% Increase

5% to 10% Increase

Less than 5% Change

5% to 10% Decrease

Greater than 10% Decrease

North America

Europe

Asia-Pacic

2009

2009

2010

2010

2011

2011

2012

2012

2013(E)

2013(E)34%

13%6%

44%

24%

9%

30%

7%

30%

18%

13%

7%

59%

23%

3%

19%

7%

49%

21%

8%

38%

12%

21%

3%

3%

-20%

0%

20%

40%

60%

80%

Source: CEB CIO Executive Board 2010-2011, 2011-2012, and 201220 13 IT Budget Benchmarking Survey.

n = 179. n = 128. n = 176. n = 181. n = 172.

n = 179. n = 128. n = 176. n = 181. n = 172.


5/14

12



MODEST OPEX GROWTH AFTER A YEAR

OF INCREASED SPENDING

Median Change in IT Operating Expenditure from the Previous Year

By Region, 2009-2013(E)

The expected increase in

IT operating expenditure

for 2013 (2.5% at the

median) is half of the

realized growth in 2012

(5.0%).

This expected IT operating

expenditure growth is in line

with infation and represents

cautious planning or 2013.

Two-thirds o CIOs expect

to see increases in operating

expenditures in 2013, while

only one-th plan to cut IT

operational budgets. This

outlook is airly consistentwith what CIOs reported in

last years survey.

Organizations in APAC plan

to hold operating budgets

nearly fat in 2013 ollowing

large increases (8.5%) in

operating expenditure in

2012.

By contrast, organizationsin Europe are showing

signs o growth, with an

expected change in IT

operating budget or 2013

at near median levels (2.1%),

ollowing contracting

budgets rom 2011 to 2012.

North America

Europe

Asia-Pacic

17%

15%

36%

15%

17%

14%

55%

14%

10%

27%

18%

48%

8%

36%

19%

31%

5%

58%

17%

17% Greater than 10% Increase

5% to 10% Increase

Less than 5% Change

5% to 10% Decrease

Greater than 10% Decrease

3% 4%

2009 2010 2011 2012 2013(E)

2009 2010 2011 2012 2013(E)

6% 7%4%

-5%

15%

20%

10%

25%

Source: CEB CIO Executive Board 2010-2011, 2011-2012, and 201220 13 IT Budget Benchmarking Survey.

0%

5%

n = 187. n = 131. n = 180. n = 183. n = 175.

n = 187. n = 131. n = 180. n = 183. n = 175.

Percentage of Organizations Changing IT Operating Expenditure from the Previous Year

2009-2013(E)


6/14

13



5.4%

5.0%

4.2%

3.8%

3.4%

3.0% 2.9%

2.5% 2.5%2.2%

1.7%

0.0% 0.0%

-0.3%

EXPECTED CHANGE IN IT OPERATING EXPENDITURE

BY INDUSTRY

Median Expected Change in IT Operating Expenditure

By Industry, 20122013 (E)

In 2013, IT operating

expenditure is expected

to grow 2.5% at the

median, though this

masks underlying

deviation across

industries.

Notably the retail,

construction/engineering/

building/materials, and

services industries show

some o the largest

expected increases.

The government/

public sector/non-prot,

pharmaceuticals/biotech,and healthcare/health

insurance industries

are expecting relatively

fat budgets in 2013 as

compared to 2012.

n = 175.

Dataset Median = 2.5%

Re

tail

Cons

truc

tion

/

Eng

ineering

/Bu

ilding

Ma

teria

ls

Manu

ac

turing

/

Chem

ica

ls

Financ

ialServ

ices

(Exc

luding

Ban

king

an

dInsurance

)

Insurance

Ban

king

Foo

d/Beverages

/

To

bacco

Consumer

Pro

duc

t

Goo

ds

Energy

/Me

tals&Mining

Governmen

t/Pu

blic

Sec

tor/

Non-Pro

ft

Pharmaceu

tica

ls/Biotec

h

Hea

lthcare

/Hea

lth

Insurance

Serv

ices

Utilities

Source: CEB CIO Executive Board 20122013 IT Budget Benchmarking Survey.


7/14

16



TWO-THIRDS OF THE IT BUDGET IS ALREADY

ALLOCATED

Allocation of Total IT Expenditure by Asset Class

20092013(E)

More than two-thirds

of the average IT

expenditure is allocated

to maintenance and

mandatory spending,

compounding the

prioritization demands ofmodest expected budget

growth.

Despite CIOs eorts to

reduce maintenance and

mandatory spending, they

continue to dominate IT

spending.

Innovation

Business Opportunity

Maintenance

Mandatory

2009 2010 2011 2013(E)20128%

66%

18%

8%

8%

62%

21%

9%

7%

63%

23%

7%

8%

60%

25%

7%

8%

59%

26%

8%


n = 178. n = 129. n = 166. n = 171. n = 169.


8/14

18



2013 OUTLOOK FOR IT ORGANIZATIONS

Key Findings

Modest IT expenditure

growth in 2013 is not

preventing CIOs from

pressing forward with the

transformation of IT.

CIOs are reallocating

resources within the

budget to drive employee

productivity through insight,

collaboration and mobility,

and to make IT more fexible

and ecient through

service management and

externalization.

These changes are illustrated

in six ndings rom the20122013 IT Budget

Benchmarking Survey.

1. Information and Collaboration Projects Grow: In 2013, project portolios will include proportionately

less investment in process automation and more in inormation management and collaboration.

2. Increased Mobility for Applications: Spending on mobile applications development will grow by 50% in

2013 to nearly 2% o total IT expenditure.

3. Greater Use of Cloud Sourcing: The majority o organizations plan to increase spending in the public

cloud in 2013, with the average cloud spending accounting or 7% o total IT expenditure.

4. End-to-End IT Services Reach Scale: In the past, organizations have indicated growing interest in end-

to-end IT services, but many organizations experimented with the model, rather than implementing it

wholesale. This tentative stance is changing.

5. New IT Roles Emerge: The ocus on service management and employee productivity enablement

is driving changes in IT roles and skills; IT organizations are developing service managers, service

architects, inormation architects, and user experience designers.

6. More IT Being Done Outside IT: Despite the development o new IT roles, the ratio o IT employees to

all employees is declining; IT employees will account or a smaller percentage o total employees in 2013

than in previous years.


9/14

19



INFORMATION AND COLLABORATION PROJECTS GROW

Allocation of the IT Project Budget by Enablement Types

Database Distribution, 2013(E)

In 2013, CIOs will

continue to focus on

driving growth through

employee collaboration

and insight and less

through traditional

process automation.

This maniests in IT

organizations spending more

on inormation management

and collaboration projects

(customer interace,

business intelligence, and

collaboration) than on

process automation projects.

For the third consecutiveyear, inormation

management and

collaboration represents the

largest project category,

accounting or 34% o IT

project budgets, compared

to 32% or process

automation.

Similar to IT capital

expenditure, IT projectbudgets are expected to

remain fat rom 2012 to 2013

ater an increase (7.8% at the

median) was realized rom

2011 to 2012.

n = 158.

INFO &

COLLABORATION

MOBILITY FOR

APPLICATIONSCLOUD SOURCING IT SERVICES

EMERGING IT

ROLESIT OUTSIDE IT

34%Collaboration,Customer Interace,and BusinessIntelligence

32%Process Automation

30%Core/

Foundational

Inrastructure

4%Other



10/14

20



INFO &

COLLABORATION

MOBILITY FOR


EMERGING IT

ROLESIT OUTSIDE IT

TOP 20%: MAJORITY OF SPENDING ON INFORMATION

AND COLLABORATION

Allocation of the IT Project Budget by Enablement Types

Top Quintile Versus the Rest of the Database in Information and Collaboration Spending, 2013(E)

The top 20% of

organizations in terms of

spending on information

management and

collaboration plan to

devote 66% of their 2013

project budget to thiscategory.

This allocation is nearly

twice as much as other

organizations in the data set.

Collaboration, Customer Interace,and Business Intelligence

Process Automation

Core/Foundational Inrastructure

Other

n = 31. n = 127.

Top Quintile Rest o Database2%16%

16%

66%

4%

30%

32%

34%



11/14

21



2011 2012 2013(E)

INFO &

COLLABORATION

MOBILITY FOR


EMERGING IT

ROLESIT OUTSIDE IT

MOST PLAN MOBILITY FOR APPLICATIONS

Organizations Investing in Mobile Application Development

Percentage of Organizations, 20112013(E)

The focus on enabling

employee productivity

through mobile

applications is wide-

spread, with 75% of IT

organizations planning

to invest in mobileapplications by 2013.

This investment represents

spending within IT on

developing new mobile

applications and making

existing applications ready

or mobile.

Note: Mobile application development spending includes costs associated with oundational eforts to prepare or mobile application development (e.g.,investments in new hardware, training, SOA services), developing new-to-world mobile applications, and converting currently existing applications tomobile versions. This spending does not include the cost o buying or supporting mobile devices.

48%

69%

75%


n = 158.


12/14

22



INCREASED INVESTMENT IN MOBILE APPLICATION

DEVELOPMENT

Percentage of Total IT Expenditure Allocated to Mobile Application Development

20112013(E)

Spending on mobile

application development

will grow by 50% in 2013

to nearly 2% of total IT

expenditure, on average.

While total investments

remain modest, the dramatic

acceleration in spending

since 2011 refects the

growing importance o

enabling a mobile workorce.

This spending is only part

o a broader trend in mobile

spending, as it excludes

spending on mobile devices,

as well as the moneymarketing teams spend on

mobile and social media

projects without involvement

rom IT.

Note: Mobile application development spending includes costs associated with oundational eforts to prepare or mobile application development (e.g.,investments in new hardware, training, SOA services), developing new-to-world mobile applications, and converting currently existing applications tomobile versions. This spending does not include the cost o buying or supporting mobile devices.

0.7%

1.2%

1.8%

n = 158.

2011 2012 2013(E)

INFO &

COLLABORATION

MOBILITY FOR


EMERGING IT

ROLESIT OUTSIDE IT



13/14

23


All Rights Reserved.CIO4133412SYN

54%Increase

CloudSpending

32%

No Changein CloudSpending

14%Decrease CloudSpending

INCREASED USE OF PUBLIC CLOUD

IT Spending on Cloud Sourcing, Change Expectations

Percentage of Organizations, 20122013(E)

Fifty-four percent of

organizations plan to

increase spending in the

public cloud next year.

This increase comes as

IT organizations ocus on

making IT more fexible and

ecient through the use o

the cloud.

INFO &

COLLABORATION

MOBILITY FOR


EMERGING IT

ROLESIT OUTSIDE IT


n = 154.


14/14

24


All Rights Reserved.CIO4133412SYN

GROWING CLOUD SPENDING

Percentage of Total IT Expenditure Allocated to Cloud Sourcing

20112013(E)

Spending on cloud

sourcing is on the rise;

this years average of

roughly 5% of total IT

expenditure allocated to

public cloud sourcing is

expected to grow in 2013to nearly 7%.

Most cloud spending is

on Sotware-as-a-Service

(SaaS), ollowed by

Inrastructure-as-a-Service

(IaaS).

While Platorm-as-a-Service

(PaaS) has had the least

traction to date, spendingin this area will continue to

grow in 2013.

INFO &

COLLABORATION

MOBILITY FOR


EMERGING IT

ROLESIT OUTSIDE IT

0.5%

1.6%

1.9%

0.7%

2.1%

2.4%

1.1%

2.9%

3.0%

Sotware-as-a-Service

Inrastructure-as-a-Service

Platorm-as-a-Service

2011 2012 2013(E)

Note: 1. Sotware-as-a-Service (SaaS): Applications accessible through a web browser where the consumer does not manage the underlying cloudinrastructure or even individual application capabilities, e.g., Salesorce.com.2. Inrastructure-as-a-Service (IaaS): Fundamental computing resources like processing, storage, and networks, where the consumer does notmanage the underlying cloud inrastructure but has control over the deployed application and the operating systems, e.g., Amazon EC2.3. Platorm-as-a-Service (PaaS): Consumer-created or acquired applications using programming languages and tools urnished by a provider, wherethe consumer does not manage the underlying cloud inrastructure but has control over the deployed applications, e.g., Microsot Azure.


n = 154.

docs.media.bitpipe.com io 10x io 102267 item 604733 2012 it budget benchmark research

Documents