CIOs shift spending to automation amid talent war - Gartner

The analyst house sees global IT spend on the rise but does not view generative AI as significantly impacting spending levels yet

Chief information officers are switching strategies and focusing IT spend on automation to drive growth at scale with fewer employees.

That is according to Gartner, which claims CIOs continue to lose the competition for IT talent.

"Digital business transformations are beginning to morph," said John-David Lovelock, distinguished VP analyst at Gartner.

"IT projects are shifting from a focus on external facing deliverables such as revenue and customer experience, to more inward facing efforts focused on optimisation."

The research firm's latest forecast shows that global IT spending is projected to total $4.7trn in 2023, up 4.3 per cent from 2022.

Gartner claims the software segment will see double-digit growth this year as organisations increase utilisation and reallocate spending to core applications and platforms that support efficiency gains, such as ERP and CRM applications.

Vendor price increases will also continue to bolster software spending through this year.

While the overall outlook for enterprise IT spending is positive, Gartner predicts money spent on devices will drop 8.6 per cent in 2023 due to the ongoing impact of inflation on consumer purchasing power.

"The devices segment is experiencing one of its worst growth years on record," Lovelock added.

"Even as inflation eases slightly in some regions, macroeconomic factors are still negatively impacting discretionary spending and lengthening device refresh cycles. Devices spending is not expected to recover to 2021 levels until at least 2026."

Enterprises will incorporate generative AI through existing tools

Gartner said that, while generative AI is top of mind for many business and IT leaders, it is not yet significantly impacting IT spending levels.

However in the longer term, generative AI will primarily be incorporated into enterprise tech stacks through existing spending.

"Generative AI's best channel to market is through the software, hardware and services that organisations are already using," said Lovelock.

"Every year, new features are added to tech products and services as add-ons or upgrades. Most enterprises will incorporate generative AI in a slow and controlled manner through upgrades to tools that are already built into IT budgets."