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North American and European Companies to increase IT budgets by 51% in 2023

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IT budgets

In order to stay competitive, companies are recognizing the growing importance of keeping up with IT trends and are therefore revising their IT budgets accordingly. With the goal of digital transformation in mind, businesses require reliable hardware, software, and support services such as cloud storage and cybersecurity solutions.

According to BanklessTimes.com, despite the economic slowdown, 51% of firms in North America and Europe are planning to increase their IT spending in 2023, while only 6% are planning to reduce it. This represents a significant 13% year-over-year (YOY) increase in IT spending across the firms. The median increase is 5%, suggesting that companies remain optimistic about investing in the IT sector, despite economic uncertainty.

The increase in IT budgets highlights these companies’ dedication to modernizing their infrastructure and optimizing operations through technology adoption. The primary drivers behind the rise in IT budgets are attributed to three factors, namely the need to update outdated infrastructure (51%), an increased priority on IT programs (45%), and the requirement to support staff growth (43%).

Significant IT trends of 2023 in North America and Europe

  • According to the BanklessTimes report, the adoption of gigabit Wi-Fi networking is the top IT trend among North American and European businesses, with 67% of these companies having already implemented or planning to implement this technology.
  • Another popular trend is IT automation technology, which has been adopted or planned to be adopted by 65% of these organizations. However, blockchain technology has yet to gain traction, with only 35% of businesses planning to adopt it in 2023.
  • Additionally, it seems that enterprises are leading the way in increasing their IT budgets for 2023, with 61% of them planning to raise their spending compared to an average of 51% across all businesses.
  • In terms of industries, IT services (67%) and financial services (60%) are expected to receive the largest budget allocations. On the other hand, the education sector (27%) is less likely to increase its IT expenditures in 2023.

Challenges that North American and European companies can expect

  • North American and European companies may face different challenges in the upcoming year. The IT supply chain could be a major issue for North American firms due to rising global trade tensions, while European businesses may struggle to support remote workers.
  • Enterprises with more than 500 employees are more likely to experience IT labor or skill shortages than small businesses with fewer than 100 employees.
  • The potential long-term effects of a recession could also disrupt these companies’ plans. In the past, economic downturns have led to a shift away from large-scale investments to more cost-effective solutions that offer comparable results.
  • Recruiting within the tech sector may also be affected, with companies possibly prioritizing experienced personnel over investing heavily in training new employees during a post-recessionary period.

Wrapping up:

Investing in IT has become a top priority for companies in North America and Europe as they recognize the importance of staying competitive in today’s digital age. Despite economic uncertainty, more than half of the firms are increasing their IT spending in 2023, intending to modernize their infrastructure and optimize operations through technology adoption. The adoption of IT trends such as gigabit Wi-Fi networking and automation technology is on the rise, and enterprises are leading the way in increasing their IT budgets. While there may be challenges such as IT supply chain issues and skill shortages, investing in IT remains a worthwhile endeavor for companies seeking to stay ahead of the curve.

Source: BanklessTimes.com

Read next: 7 data-driven ways for IT leaders to ride the economic downturn – IDC Report

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