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November 24, 2015updated 28 Mar 2017 4:22pm

2016 Budgets: What’s In, What’s Not

It is the time of year when most IT directors will be finalising budgets for 2016.

By John Oates

It is the time of year when most IT directors will be finalising budgets for 2016. Surveys suggest spending on enterprise technology will be flat or grow by just one per cent and headcount in the IT department is likely to stay the same over the next twelve months.

This will look different in different industries – European and UK public sector organisations for instance will see continuing pressure to cut costs and headcount while retail and banking are expected to maintain or even slightly increase spending.

Even if budgets are not changing there will still be increasing demands from companies looking to increase the role technology plays in running and changing how the business works.

The push to improve mobile access for staff, more use of mobile applications by customers, increased use of data analysis and improvements in software development are just some areas of innovation coming to the fore in 2016.

Despite pressure for innovation the bulk of spending will still be in keeping existing infrastructure running.

Software licenses, network expenditure, staff costs, backup and storage provision and hardware provision all eat up cash.

There will be some upgrading though – many companies will be looking to move to Windows 10 during 2016, and probably upgrading server software too.

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2016: The year of the hybrid cloud

Most CIOs expect to increase spending on managed services and cloud provision in 2016. Done right this should allow improved mobility, flexibility and reliability for staff and more predictable spending for IT departments. In general the shift to cloud provision means enterprise IT departments are increasing operational budgets while reducing capital spending.

Wise IT chiefs will be talking to several providers to ensure they’re getting the best deal in terms of both costs and terms and conditions.

Some are predicting 2016 as the year the cloud really starts to disrupt traditional IT infrastructure and hybrid architecture becomes the norm.

Security, security and more security

Information security will continue to grab executives attention, and a growing share of the technology budget.

SourceMedia’s survey of CIOs at US banks found most expected to increase spending on IT security by at least 10 per cent. Many were predicting increases of 20 per cent or more. Those surveyed claimed the ‘high cost of failure’ and resulting bad publicity along with increased pressure from regulators meant spending would stay high.

Competition for the best trained and most experienced security staff comes from both government and business so pressure on salaries and recruitment is unlikely to fall.

More than half of bank technology bosses also expected to see higher spending on data analytics.

Breaches like TalkTalk, and warnings of increased cyber threats by Chancellor George Osborne, mean security will be more of a focus for all businesses and the public sector.

In 2016 CIOs will again be trying to do more with less. Moves to cloud-based solutions will play an increasing role in making this possible and security will play an ever more central role in  all technology decision making.

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