Where should you invest your IT budget?

In a recent study of North American IT managers, research firm Gartner predicts three major trends that will guide IT-related decisions between 2023 and 2025: the exit from the pandemic, the fear of a recession and the opportunities related to artificial intelligence. 

In other words, organizations will turn to IT to build resilience, optimize existing processes and create distinctive advantages through new technologies. 

This is all very promising, but these concepts seem a little fuzzy. In concrete terms, what does this mean for your organization? As a business leader or IT manager, where should you invest your money to achieve these objectives? 

To become resilient, efficient and distinctive, we see five main categories of investment to prioritize over the next three years: cybersecurity, business intelligence, cloud, software modernization and a new concept called the “total experience.” 

 1. Cybersecurity

The number of ransomware cases has seen a meteoric rise over the past five years—which could be why more than 64 per cent of IT leaders surveyed by Gartner say cybersecurity will be their top investment focus between 2023 and 2025. 

In Canada, Indigo was a recent target of a ransomware attack, forcing the retailer to shut down its ecommerce functions for more than 10 days. Although Indigo said it was difficult to assess the direct losses related to the attack, the expenses incurred to remedy the situation has already exceeded $5 million.  

The risk is very real—and not just for large companies. Indeed, SMEs are also at risk since many use legacy IT management systems that are often poorly maintained, so they’re easy prey for malicious IT groups. Insurers are increasingly aware of these risks, and it’s possible that investment in cybersecurity will become a requirement in the coming years. 

 2. Business intelligence 

Julie Laroche, a data expert with Logient, said in a recent interview that we talk too much about artificial intelligence (AI), but not enough about business intelligence (BI). In other words, there is so much enthusiasm around AI that we forget the basics: BI and data analysis. 

In the Gartner survey, 56 per cent of respondents say they’ve increased their investments in this sphere. But to truly leverage AI, organizations must first equip themselves with data management software, put data governance processes in place and then clean, classify and structure relevant data. 

Taking these first steps will help managers leverage the power of their data through dashboards and make better informed decisions. AI can then be used to detect and predict trends that would be impossible to detect manually.

3. Cloud platforms

The cloud has become widely democratized in recent years, with several hyperscale cloud providers offering cost-effective options in regions around the world. While most organizations already have some applications in the cloud, they may have hesitated to migrate more mission-critical applications. For those who haven’t taken the plunge for budget, security or privacy reasons—such as not being able to store data offshore—they may want to reconsider.  

Forty-eight per cent of IT managers surveyed by Gartner say they’re increasing their investments in cloud for its numerous benefits: better cybersecurity, redundancy, accessibility and ease of processing. 

 4. Software modernization

Many organizations, especially SMEs, run their operations on enterprise resource planning (ERP) software, which was developed in the early 2000s. These systems have become difficult and expensive to maintain, particularly because the programming language is no longer taught or commonly used. A few computer scientists nearing retirement may be able to lend a hand, but this is not viable in the medium or long term. It will inevitably be necessary to modernize this software. 

With the risk of a recession looming, the time is right for such a change. That could be why 45 per cent of respondents to the Gartner survey indicate they want to invest in software modernization over the next few years—seeing it as an opportunity to gain efficiencies, but also to build resilience.

5. The total experience

In its simplest form, the total experience represents the amalgamation of customer experience (CX) and employee experience (EX). The idea conveyed by the creators of this concept underlines the fact that a satisfied and happy employee leads to a satisfied and happy customer, so CX and EX are inseparable. Mastering this concept could contribute to better customer loyalty as well as better employee retention, which is critical during a talent shortage. 

In the Gartner survey, 34 per cent of respondents say technology can play an important role in the total experience—and they plan to invest more in it. This involves the implementation of customer relationship management (CRM) and training software, the deployment of conversational robots and the development of useful mobile applications in-store—any technologies that reduce redundant tasks for employees so they can focus on the customer. It’s possible that this term is just another buzzword, but it certainly deserves attention, especially in a period of economic uncertainty. 

Each of these investment trends will be covered in more detail in our upcoming articles. Subscribe to our newsletter so you don’t miss a thing! Stay on top of the latest trends in the field by following us on our LinkedIn and Facebook accounts.