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September 11, 2015

CEOs & CFOs miss out on ICT decision making

Kable Global ICT Intelligence: More than half of companies’ ICT budgets are spent on keeping the business running instead of investing in new IT projects.

By Joao Lima

Analysis from Kable has found CEOs and CFOs to be the least involved entities on organisations’ decision-making processes for purchasing ICT products.

The survey unveiled that the main decision makers are the IT organisation, individual business units with IT guidance and combined decision by all affected parties.

The area where the C-suite has a stronger voice on ICT spend is on decisions to buy big data and analysis solutions (14.6%), and network and security platforms(14.2%).

Kable has found that the majority of companies choose to spend budget based on a combined decision by all affected parties. Collaborative decision making resulted in big data analysis investment for 34.5% of companies, and 30.9% for networks and security.

Other areas of investment like enterprise mobility solutions are also made based on combined decisions (37.5%), with CEO/CFOs being the key identity involved in the purchase process in 8% of surveyed companies.

The CEO and CFO involvement in the decision making process when it came to cloud based products, and voice, video and collaboration solutions was even lower at 6.3% and 6%, respectively.

In most companies (45.7%) the IT organisation is the sole decision maker for cloud, and individual business units with IT guidance (39.2%) are the ones deciding on investments around voice, video and collaboration products.

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The research firm also asked companies about who they are spending their ICT budget with this year and how that would change next year.

Respondents said the biggest portion of spending goes to internal development and maintenance; a total of 31.8% of total budget. This figure is set to drop to 30.9% in the next 12 months.

IT service providers and consulting firms (18.4%), technology product vendors (14%), telcos (10.8%) and specialist outsourcers (10.3%) follow as organisations’ biggest spend by entity.

The percentage of investment in these areas is set to change next year, with companies increasing expenditure on all the above areas; IT services providers and consulting firms spend is to increase up to 18.6%, technology product vendors to 14.5%, telcos to 11.9% and specialist outsourcers to 10.5%.

Systems integrators will see the biggest drop in spending from 8% this year to 6.8% next year, while local resellers of technology products will continue to account for 6.7% of ICT budgets spending based on whom the companies are investing with on ICT.

The report has also revealed how companies split their total ICT budget between ‘run the business’ and ‘change the business’ expenditure. Those surveyed said that this year 57% of their budget has been allocated to running existing systems and applications, while the remaining 43% was budgeted for expenditure on new IT projects.

As for next year, companies will be keeping nearly the same figures, with a small decrease on the budget to ‘run the business’ (56.7%) and a .3% increase in expenditure on new IT projects.

All figures come from Kable’s ICT Customer Insight survey, which polled 2685 respondents, from across the world in Q4 2014. The survey findings include data on key entities involved in the decision making process for purchasing products in different areas, ICT budget spending by entity and split in total ICT budgets between ‘run the business’ and ‘change the business’ expenditure. Subscribe to Kable here.

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