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IT spending trends point to CIO innovation

Gartner's global forecast calls for a resumption of longer-term technology projects in 2022, with hyperautomation and AI on the anticipated IT agenda.

CIOs this year will shift gears from handling the urgent IT needs of the COVID-19 economy to driving a longer-term view of technology and innovation.

Gartner this week released its latest worldwide spending forecast, which anticipates 5.1% year-over-year growth for 2022. Spending on enterprise software and IT services will lead the expansion in a market tipped to reach $4.5 trillion. The market researcher contended economic recovery and high expectations for digitalization will fuel IT spending trends, despite the uncertainty caused by the omicron variant.

John-David LovelockJohn-David Lovelock

In 2020, technology managers were occupied with the enormous task of supporting the sudden surge in remote workers from 250 million to 1.2 billion people, noted John-David Lovelock, research vice president at Gartner. That pressure let up somewhat in 2021 as CIOs started to consider how to optimize their stopgap tech measures, pursuing reliability, stability and human-centric design.

Now, CIOs have an opportunity to push further ahead.

"2022 is going to be about longer-term projects," Lovelock said, noting CIOs' return to a future orientation: "Let's get back to innovation. Let's get back to transformation." 

IT spending graphic
IT spending is forecast to grow 5.1% in 2022., with enterprise software and IT services leading the way.

CIO approaches

CIOs will employ a number of tactics as they pursue the next wave of projects. For one, they will combine long-term planning with accelerated approaches stemming from COVID-19. For example, tech managers found sprints well suited for coping with the pandemic's get-it-done-yesterday timelines, Lovelock said. Going forward, he anticipates CIOs using short-term sprints to reach first base with their long-term goals.

Forward thinking, meanwhile, will spark an increase in long-term contracts that accommodate three-to-five-year planning horizons. Inflation and the war for talent also encourage extended contract periods, Lovelock noted. Longer-term deals offer CIOs greater certainty regarding cost and the availability of technical skills, he said.

2022 is going to be about longer-term projects.
John-David LovelockResearch vice president, Gartner

The skill shortage will also generate demand for external service providers such as consultants and MSPs. The Gartner forecast shows IT services growing to 7.9% year over year in 2022, hitting $1.3 trillion. The market watcher expects IT services' spending growth to trail only enterprise software, which tops the Gartner forecast with a projected 11% year-over-year increase.

Business and technology consulting services will emerge as one of the fastest-growing sectors in IT services, growing at a 10% clip in 2022, Lovelock said. Cloud adoption will help drive that spurt. Gartner research suggests the vast majority of large organizations will hire external consultants to devise cloud strategies over the next few years.

Third-quarter 2021 data from the U.S. Census Bureau sheds additional light on the IT services industry, which continues to rebound from the pandemic's economic disruption. Services providers offering infrastructure for hosting and related services generated 23.2% year-over-year growth in Q3, according to Census estimates. Companies providing computer systems design, which includes systems integration, grew 9.1%.

Projects ripe for investment

Hyperautomation stands out as one area in which CIOs will invest their innovation dollars this year, Lovelock said. That trend, underway in 2021, lets organizations tackle an entire process as opposed to optimizing a single task within a process. When built into a digital business project, hyperautomation affords greater scalability than relying strictly on staff. The technology also frees in-house personnel from the drudgery of repetitive tasks, he added.

This year could also see the return of AI projects placed on hold in the early months of the pandemic, Lovelock said. He said corporations may have the money and foresight to take on such efforts, which offer few deliverables in the early days but provide results in the later stages.

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