Business expenditure on IT in 2014

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In 2014, small and medium-sized enterprises earmarked for IT purchases an average of 481 thousand zł. Larger companies declared much higher expenses – more than 3,1 million zł.
Last year, some Polish companies increased spending on IT industry. Most companies, especially large ones, decided to allocate for these purposes the same amount as the year before. Main investment was the purchase of hardware and new software – according to a IDG and GercConsulting raport. The research was based on 250 companies belonging to both the small and medium-sized enterprises (from 10 to 249 employees), large companies (250 employees and more), as well as public administration, finance, industry, services, trade and other.

Much, but not always more

In 2014, an average expenditure planned for IT activities was 589 142 zł in the whole group. At that time, small and medium-sized enterprises intended to spend an average of 481 251 zł, large enterprises – 3 152 373 zł, public administration – 601 818 zł, service companies – 831 033 zł and “other” – 77 297 zł.

These amounts look promising, however, boards of companies were planning their budgets for 2014 very carefully. Company management counted every single penny they intend to spend on IT operations. This may indicate a cautious optimism, but certainly not a strong belief in the dynamic development this part of the business.

On average, one in four of all the companies involved in the research assumed that IT-related expenses would be lower than in 2013. Almost half of the enterprises – 44% – planned to spend the same amount of money as the year before and for 30% of them planned budget was larger than in 2013.

Among the companies which declared budget restrictions for IT, for as many as 42% the main reason was smaller financial possibilities. Another response indicated a need to reduce the costs of businesses (13%), the need for other investments (13%), no need to invest larger sums in IT (9%), carried out replacement of equipment in previous years (8%), a different budget allocation (8% ) and the changes in technology (2%).

Companies that have planned bigger budgets this year, explained this increase by  cost of implementation of innovations and new projects (34%). Another reason was a need of a greater investment (32%), 18% of them needed more money to replace hardware. Among the reasons for the budget increase were again: better financial conditions of companies (7%) and the impact of inflation (5%). Only 3% of the listed cases have planned some new tasks for IT departments.

Where are that money now?

According to the declaration of the representatives of the executives, directors and IT managers, the average expenditure on various IT areas were evenly spread between: 35% of the total budget (205 150 zł) were spent on the new equipment, 36% (212 021 zł) appropriate software and 29% (171 971 zł) on services related to those departments.

The closest of predicted average were small and medium-sized enterprises, in which the distinction between these three categories corresponded to the average for almost the entire group. So, small and medium-sized companies allocated 36% (175 262 zł) of the budget to buy IT equipment, 35% (170 244 zł) new software and 28% (135 745 zł) IT services .

For larger companies that had invested in the new equipment before 2014, on its further purchases were spent on average 29% of the budget (915 214zł ), on the new software 38% (1 204 529 zł) and 33% (1 629 032 zł) on related services. The largest part of the budget for software were allocated by financial service companies (up to 54% – 725 110 zł) and industrial (43% – 120 511 zł). The trade and public administration had planned the largest part of its budget for the purchase of new equipment – respectively 54% (290 of 525 zł) and 38% (312 of 862 zł).

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Business expenditure on IT in 2014