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Gartner: 90% of Tech Spend Will Be Outside IT By 2020

October 22, 2012 - News

Ninety percent of technology spending will be outside of the IT budget by the end of the decade, according to Gartner Inc. analysts, speaking at the opening keynote for Gartner Symposium/ITxpo. In contrast, only 20 percent of technology spend was outside of IT as recently as 2000.

The research firm said this change is being driven primarily by the digitization of companies’ revenue and their services. Organizations are digitizing segments of business, such as moving marketing spend from analog to digital, or digitizing the research and development budget. Second, organizations are digitizing how they service their clients, in order to drive higher client retention. Third, they are turning digitization into new revenue streams. Gartner analysts said this is resulting in every budget becoming an IT budget.

To address these changes, Gartner predicts organizations will create the role of a "chief digital officer" as part of the business unit leadership, which will become a new seat at the executive table. Gartner predicts that by 2015, 25 percent of organizations will have a chief digital officer.

“The Chief Digital Officer will prove to be the most exciting strategic role in the decade ahead, and IT leaders have the opportunity to be the leaders who will define it," said David Willis, vice president and distinguished analyst at Gartner. “The Chief Digital Officer plays in the place where the enterprise meets the customer, where the revenue is generated and the mission accomplished. They’re in charge of the digital business strategy. That’s a long way from running back-office IT, and it’s full of opportunity."

This transformation is the result of the what Gartner calls a "Nexus of Forces," or more plainly, the convergence and mutual reinforcement of social, mobile, cloud and information patterns that drive new business scenarios.

Willis said the forces of cloud, social, mobile and information are reconfiguring how people work and live. It’s a world in which business and personal lives are intertwined. A world with fewer commands and control restrictions that stifle productivity and innovation.

“It’s an environment where information technology does not define the rules. Instead it is a key ingredient in achieving personal and enterprise productivity and innovation. Where technology is so natural and pervasive that we don’t even need to hold it in our hands. It’s just a part of our lives," Willis said.

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