Spend Matters welcomes another guest post from Jon Winsett of , a spend management consultancy focused on eliminating overspending on IT, telecom and shipping.
That “Global IT spending is growing, albeit cautiously” was the message shared by Gartner in their IT Spending Forecast, 2Q13 Update. While the analyst firm previously predicted a 4.1 percent growth in IT spending this year, they have lowered expectations to 2 percent for a total of $3.7 trillion.
The caution can be chalked up to instability in U.S. dollar exchange rates and declining PC sales, which isn’t exactly surprising. Between fiscal policy debates and global economic instability, not to mention the death of the desktop, the impact on IT spending is evolving in real time.
A few things came to mind as I listened to Gartner’s webcast on its revised IT spending forecast:
If you’re not ready for the holistic impact that BYOD will have on your IT spending, you may be in trouble. As my colleagues at NPI have said many times before, BYOD is driving higher spending in mobile device management, network security, bandwidth, and help desk/IT support. Now is the time for anticipating and mitigating these cost increases.
The mobile device is king, and in acknowledgement, enterprise software companies will continue to change their licensing models. Sales for tablets and mobile phones are expected to grow 38.9 percent and 9.3 percent respectively – and software vendors are devising ways to profit from this growth. This year, we’ve seen Microsoft, Oracle, SAP and other large enterprise software vendors move to device-based licensing programs or enforce “third party access” restrictions. It’s safe to say that vendors will continue to monetize device proliferation at the expense of clients’ IT budgets.
Telecom spending is the Trojan horse. Telecom spending, which fell 0.7 percent in 2012, is rebounding with Gartner expecting a 0.9-percent growth for $1.65 trillion in spending in 2013. With little price competition in the fixed and mobile markets combined with the fallout of BYOD and the complexities inherent in telecom expense management, telecom has become a nightmare to manage. Most companies have little visibility into how much they’re spending and how to control it. If your company doesn’t have a rigorous TEM strategy, create one or consult a third-party expert.
IT sourcing and marketing need to become friends – ASAP. Gartner predicts that higher demand for CRM software will help drive enterprise software spending up 6.4 percent to $304 billion. How well IT sourcing and marketing work together on procuring these solutions will be crucial in preventing overspending on upfront costs (license fees, subscription costs, implementation/customization), as well support and maintenance renewals.