2014 Saw Increases in IT Spending, Employment and Dissatisfaction According to Survey

On Feb 9, 2015

Spending on information technology increased in 2014, and there is cautious optimism that this trend will continue in 2015, according to the results of Montvale-based DATA Inc.’s third annual information technology survey.

In this year’s IT Decision 2014 survey, 81 percent of respondents indicated that their firm’s IT spending increased from the previous year, the same figure as reported last year. While 90 percent of this year’s survey participants said they don’t expect information technology budgets to decrease in 2015, only 56 percent believe IT expenditures would increase.

What’s interesting is that while a strong majority of survey respondents reported increased IT budgets each of the last three years, the percentage who forecast IT budgets would grow in the upcoming year has been on the decline, from 88 percent in 2012, to 70 percent in 2013, to 56 percent in this year’s survey.

“Technology initiatives continue to drive companies’ efforts to improve their internal processes, as well as efforts to better connect with customers and key stakeholders,” said Conrad Leao, DATA Inc. Vice President of Operations. “Among our customers, we see this IT investment in the form of leveraging Big Data, evolving computing platforms and the creation of innovation applications, to name a few.”

DATA Inc., a globally recognized information technology software and service provider, conducted the survey from October through December. It includes responses from more than 180 IT and business professionals in a range of positions, including executive management, business stakeholders, and IT developers and project managers. Participants were surveyed on a variety of topics including IT spending, employment, and technology outcomes in 2014 as well as their perspective on expected trends in 2015.

Looking at 2014 spending levels, 92 percent of respondents at mid-size businesses said IT spending had increased in 2014, while 83 percent of large business respondents reported increases. Even small businesses invested more in IT in 2014 vs. 2013, as roughly 65 percent of these respondents reported spending more than the previous year.

“At DATA Inc. we’ve noticed that an increasing number of mid-sized and small businesses have increased their IT spending over the 12-18 months,” said Arun Verma, CEO and founder of DATA Inc. “We believe as the cost of technology comes down, these smaller companies realize that they have the opportunity to catch up to their larger competitors.”

Along with an increase in spending, 2014 also saw an increase in IT employment, according to survey respondents, as 91 percent of survey respondents reported being employed.  This represents a 3 percent increase over 2013, and a 10 percent increase over 2012.

While key indicators look positive, survey respondents identified several challenges in 2015 which have the potential to inhibit growth. Among these challenges are:

• Increased competition for skilled labor,;
• Increased dissatisfaction with IT service providers
• Evolving rules and regulations.

A majority of companies (76 percent) were either satisfied or very satisfied with their IT service providers in 2014, according to survey respondents, but the  percentage of “least satisfied” jumped significantly. In 2014, 24 percent reported dissatisfaction, vs. 8 percent in 2013 and 9 percent in 2012.

“IT service providers should take note of the 16 percent jump in dissatisfaction and pay close attention to client satisfaction,” said Ashis Bhisey, vice president of technology at DATA, Inc.. “With similar services available to clients from multiple service providers, quality of service is a key differentiator for winning and retaining clients.”

Other findings from the survey:

• IT spending in 2014 vs. 2013: There was little change from year to year, as application development, the testing and quality assurance work with those applications, service oriented architecture and infrastructure efforts were all listed as priorities by more than 50 percent of respondents.
• Forecasts for 2015: According to respondents, not much is expected to change, led again by an emphasis in application development (61 percent of respondents) and service oriented architecture (56 percent).
• Regarding planning and implementation of solutions, “cost” continues to be the big issue, at 61 percent, but “adaptation,” or adapting to new IT paradigms, rose significantly, from 30 percent to 43 percent. A lack of experts, or difficulties finding IT pros with the needed skillsets, was named by 40 percent of respondents, the highest in three years.
• Offshoring levels on IT projects won during 2014 remained steady, as 48 percent of these projects involved this strategy, say respondents, similar to 2013’s 45 percent.

“Despite the survey’s findings regarding a de-emphasis of mainframe migration and reengineering, it remains a concern for our largest corporate clients who have large legacy application portfolios,” said Bhisey.

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