Building a slide deck, pitch, or presentation? Here are the big takeaways:

  • Global IT spending is predicted to hit $3.7 trillion in 2018, up 6.2% from the year before. — Gartner, 2018
  • Enterprise software and IT services will lead the growth of IT spending in 2018. — Gartner, 2018

Business leaders must prepare for a “new cycle of IT growth,” as worldwide IT spending is projected to see its highest annual growth rate this year since 2007, according to new research from Gartner.

Gartner predicts that IT spending to hit $3.7 trillion in 2018, marking a 6.2% increase from the year prior, according to a press release. This led John-David Lovelock, a research vice president at Gartner, to make the above prediction about a new cycle of growth, but also to note in the release that “spending on IT around the world is growing at expected levels and is in line with expected global economic growth.”

Lovelock further explained that “tailwinds” being experienced by the US dollar are partly the cause of the growth. The dollar will trend stronger, he said in the release, “while enduring tremendous volatility due to the uncertain political environment, the North American Free Trade Agreement renegotiation and the potential for trade wars.”

SEE: IT budget research 2018: Funding and spending priorities (Tech Pro Research)

Software will be see the most growth, with an 11.1% bump, the release noted. The changes coming to many organizations with digital transformation will be a big part of that increase.

Data center spending won’t be as strong this year, only seeing a 3.7% increase. That is down from the 6.3% growth it saw in 2017, and Gartner’s release said that there may be challenges, particularly, for the storage industry.

“The strength at the end of 2017 was primarily driven by the component shortage for memory components, and prices have increased at a greater rate than previously expected,” the release said. “Whereas previously, component shortages were expected to ease into 2018, the shortages are now expected to continue throughout the year with the supply not expected to ease until the end of the year.”

Additionally, device spending will hit $706 billion by the end of the year, a 6.6% increase from the year before, Gartner predicted.

As IT spending increases, it is essential for CXOs to get their tech budgets in line. An IT budget should be a reflection of a company’s overall IT strategy, and leaders should start by monitoring their spending against last year’s budget and adjusting accordingly.

Once leaders are able to cut the fat in their budget, it’s critical to lay out strategic priorities for the year ahead and see if the proper funding is allocated for those areas. CXOs also must prepare a defense of their budget in advance, in order to streamline the approval process.

For a deeper look at IT budgeting, check out our smart person’s guide.