2017 IT forecast: Budgets will rebound

By: Sharon Florentine

TEKsystems 2017 IT forecast shows IT budgets rebounding from a slump in 2016, and IT leaders’ confidence high going into the new year. But challenges around talent acquisition and organizational alignment will persist.

The research, which polled 700 CIOs, IT hiring managers, directors and vice presidents in October 2016, found that almost half, 49 percent, expect their IT budgets to increase in 2017. Only 12 percent of respondents say their IT budgets will decrease, and 39 percent say their budgets will stay the same.


Confidence is high

IT leaders’ confidence levels are high, too, with 86 percent of respondents saying they’re confident in their IT department’s capability to satisfy core IT demands (up 11 percent over 2016), 76 percent saying they’re confident in their ability to satisfy line-of-business demands (up 16 percent) and 59 percent say they’re confident in their ability to satisfy demands for new IT initiatives (up 5 percent).

2017 it forecast chart Thinkstock

“This is good news and, overall, a pretty optimistic view of the future. If I’m an IT leader, I’d say I’m feeling really good about where our department and our organization is heading in 2017, and I’m feeling secure that we’re able to meet the requirements of the people who are relying on us,” says Jason Hayman, market research manager at staffing and recruiting firm TEKsystems.

By far, organizational alignment, or how well IT and other areas of the business staff understand and coordinate with each other, continues to be cited by 32 percent of IT leaders as the biggest challenge their organization will face in 2017. By contrast, the next most challenging area for IT leaders, skills, only garnered 19 percent of respondents.

This could be directly related to the decentralization of technology spending, the diffused ownership of IT projects, and resulting pull-back from central IT staff, according to the research. With technology investments being made beyond the IT department itself, the IT team and IT leaders specifically lose visibility into what others in the organization are doing, making it difficult to connect efficiently and understand each department’s goals, the research suggests.

“IT’s job is to deliver services that align with the needs of the business and so they have to make sure they have a seat at the table when other executive leaders are making decisions about spending. If they don’t, their voice can quickly be supplanted by the CMO or other executives as IT spend is increasingly spread out to other departments. The continued decentralization of IT, and Shadow IT is a big problem, and looks to remain that way,” says Hayman.


Some skills still hard to find

Programming and software development continue to be among the most crucial and hard-to-find IT skill sets, according to the research, with 42 percent of respondents saying these roles are the most critical for success in 2017 and are the most difficult to find, followed by networking (29 percent) and security talent (28 percent). Project managers, too, are in huge demand and essential for continued success, according to 32 percent of respondents.

“Once again, programmers and developers top the list of the hardest-to-find and most critical talent, but don’t ignore that security, networking and data integration are also crucial. Nobody wants to be in the news as the victim of the latest data breach, but just as important, every organization needs to know how to get the most value out of the huge streams of data they’re collecting so they can continue to innovate and deliver greater customer value,” Hayman says.


Salaries continue to rise

As organizations struggle to hire and retain this talent, many are pushing salaries for programmers and developers even higher, the research shows. Hayman says that trend shows no signs of slowing, as long as organizations continue to spend on technology. But some are looking for other ways to fill critical talent gaps, such as outsourcing or using a contingent workforce.

“There’s not enough talent, and businesses can only continue to raise salaries so far. They have to create a good employee value proposition, too, that includes career growth and development, purposeful, meaningful work and exciting new projects. Some organizations also are using contractors and contingent workforces through the gig economy to fill these talent gaps,” Hayman says, while others are leaning more on partners and outside solution providers to share responsibility for IT projects and initiatives.

While challenges remain, overall it seems the future outlook for 2017 is bright and IT leaders have every reason to be confident.