CIOs Face Compressed IT Spending, Security Concerns and Higher Expectations in 2023


CIOs are heading for a tough year in 2023 as senior executives expect faster time to value on projects while IT spending is squeezed by inflation. At the same time, CIOs have remained very focused on cybersecurity as the threat landscape continues to worsen.

These were among the highlights of the Gartner IT Symposium/Xpo in Orlando this month. Here is a breakdown:

  • While CIOs expect IT budgets to grow by 5.1% on average in 2023, this is below the expected inflation rate of 6.5%.
  • CIOs continue to say their top priority is operational excellence
  • Senior executives are looking for an acceleration of the time to value on projects

“Senior executives want to see the money, whether it’s revenue or bottom line,” Janelle Hill, research director at Gartner, told InformationWeek. “Given the times of inflation, with a potential recession coming, with all the problems in the world, we’re saying your leaders are running out of patience. Basically, now is the time to show them the money.

Gartner based its findings on a survey of 2,203 CIOs in 81 countries covering all major industries and representing $322 billion in IT spending.

CIOs ranked their leaders’ goals for investing in digital technology over the past 2 years. The two main objectives were to improve operational excellence (53%) and to improve the customer or citizen experience (45%). Revenue growth was cited by 27% as a primary objective and 22% cited improving profitability.

Key areas for increased investment

CIOs said their top areas for increased investment for 2023 included cyber and information security (66%), business intelligence/data analytics (55%) and cloud platforms ( 50%). Lower, 32% were for increased investment in artificial intelligence (AI) and 24% for hyperautomation.

Disconnection with the boards of directors?

These low numbers for AI and automation may indicate some disconnect between CIOs and boards. According to a separate Gartner survey of 281 board members, the top areas of investment to drive digital and business success were AI and machine learning (ML) at 40%, improvement software at 30% and data and analytics at 28%. .

In fact, today’s boardrooms have changed and now look to CEOs to lead digital business initiatives rather than CIOs to do so, Gartner Vice President Jorge Lopez told InformationWeek. . The survey found that 28% look to CEOs versus 19% to CTOs, and only 14% see CIOs as drivers of digital business initiatives within the company.

“It’s actually a major change,” Lopez says. Because digital transformation requires technology, it may have been left to the CIO. But digital transformation is actually about business and should be led by the CEO.

In digital business, there is optimization, and then there is transformation, he explains. CIOs have tended to focus on optimization.

“Optimization can be a more comfortable place because they think if I improve my operations, I’m more competitive,” Lopez says. “In retail, it turned out to be a disaster. Companies like Toys R Us were crippled by the rise of Amazon and never quite figured out what to do. So they kept trying to ‘optimize what they were doing when in fact they should have been thinking about how we transform ourselves so that we can build a business for a world that is perhaps dominated by Amazon.

Target, however, has found a way forward, according to Lopez.

“Target responded to the e-commerce side of Amazon, but also established brands within their operations that allowed them to differentiate themselves from someone who would normally go to Amazon to buy things.”

The budget squeeze

“I’ve never met a CIO who said, ‘I have a lot of money, a lot of people, a lot of resources.’ They always feel like they’re short,” says Hill.

She recommends CIOs and IT managers prioritize spending and downtime. They can also optimize their expenses by reducing costs using technologies such as automation or augmentation.

What to read next:

How CFOs will meet the challenges as we approach 2023

Quick study: IT budgets and cost management

What to expect in 2023: IT spending, recession, talent crisis, privacy


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