Some industries won’t return to pre-pandemic levels of IT spending until 2023, according to new forecasts from analyst Gartner.
Worldwide IT spending is expected to grow 8.4% to $4.1 trillion this year as businesses push forward with digital transformation initiatives.
According to Gartner, all IT spending segments will see growth through to 2022, the highest of which will come from devices (14%) and enterprise software (10.8%). This comes as organizations re-think the traditional workspace in line with recent shifts to remote and hybrid working.
However, a return to pre-pandemic levels of IT spending will vary according to country and industry, Gartner said. Banking and securities and insurance spending could resemble pre-pandemic levels as early as 2021, while retail and transportation “may not see the same recovery until closer to 2023.”
China has already surpassed 2019 IT spending levels, while North America and Western Europe are both expected to recover in late 2021 and Latin America is expected to recover in 2024, Gartner said.
According to the analyst, the surge in IT spending this year won’t come from traditional IT departments, but other areas of the business undergoing digital transformation. These units see IT charged as a cost of revenue or cost of goods sold.
John-David Lovelock, research vice president at Gartner, said: “IT no longer just supports corporate operations as it traditionally has, but is fully participating in business value delivery. Not only does this shift IT from a back-office role to the front of business, but it also changes the source of funding from an overhead expense that is maintained, monitored and sometimes cut, to the thing that drives revenue.”
One IT segment seeing increased investment is social software and collaboration platforms, and human capital management software, which comes as a result of a heightened focus on employee experience and wellbeing.
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CIOs will continue to focus on optimization and cost savings, though Gartner said the priority for IT leaders for the remainder of 2021 will be to see through digital transformation initiatives and improving the value of the company.
“Last year, IT spending took the form of a ‘knee-jerk’ reaction to enable a remote workforce in a matter of weeks. As hybrid work takes hold, CIOs will focus on spending that enables innovation, not just task completion,” said Lovelock.