Deloitte 2024: business technology investments will rise this year

Deloitte 2024: Technology investment is rising worldwide, with the average corporate technology budget rising from 4.25 per cent in 2020 to 5.49 per cent in 2022, with a forecast of 5.85 per cent for 2024. This is according to Deloitte’s new report “Global Technology Leadership Study 2023”, a global study that gathers the views of chief information officers (CIOs) and technology leaders within companies. Based on interviews with a sample of 1,179 professionals, including 245 from Italy, the report analyzes the evolution of tech roles, the importance of strategies to attract and retain talent, the challenge of data monetization, and the role of technology budgets in the enterprise.

“The conscious use of new technology trends, including Cloud, Big Data and AI, can provide a lasting competitive advantage for companies that will have devoted the right resources to these issues. The main advantage is being able to keep up with these trends and thus be ready to transform their business before their competitors do,” says Francesco Rossi, Partner and Technology Strategy, Agility & Architecture Leader at Deloitte Central Mediterranean, commenting on the report.

The evolution of tech roles: only the CIO is no longer enough

While technology leaders face increasing challenges, in Italy, the CIO (Chief Information Officer) remains the most prevalent figure, present in 78 per cent of the companies surveyed, with 67 per cent stating that this is the highest-level technology role in their organization. This is joined, in some cases, by other figures, such as Chief Technology Officer (35 per cent), Chief Digital Officer (15 per cent), Chief Data Officer (13 per cent) or Chief Information Security Officer (36 per cent). Even where these figures are present, it is often the CIO who retains responsibility for most areas, with a particular emphasis on modernizing legacy and core systems and software development. But the more technology advances, the more it will be necessary to rethink the roles and distribution of tech responsibilities within organizations.

The importance of tech talent: increasingly strategic in the future

Today, only 23 per cent of respondents globally- and 15 per cent in Italy- say that attracting and developing talent is a priority for their organization, even though the current context, with the ever-changing technology landscape, makes clear the importance of a dedicated strategy. Asked what initiatives are most effective in retaining tech talent, Italian CIOs highlight the importance of “creating an engaging mission, vision and purpose” (59 per cent), “offering flexible/hybrid work environments” (53 per cent) and “offering greater autonomy and control to individual teams. Leveraging technology talent empowers companies to achieve strategic goals, and it is crucial to implement proper talent management based on adopting an effective and sustainable approach and establishing a flexible, productive, and rewarding work environment,” comments Rossi.

Tech investment on the rise: it will be worth 5.85 percent of revenues in 2024
Tech investment on the rise: it will be worth 5.85 percent of revenues in 2024

Monetising data: it will be worth more than $15 billion by 2030

Globally, more than a third of C-level respondents (36%) say they generate revenue from data or technology, while 16% plan to do so in the next two years. Monetisation can occur in many ways, from commercialising proprietary software to leveraging data to create value or optimise existing operations. Tech leaders say they are investing significantly to build expertise in this area. While the global data monetisation market was worth $2.1 billion in 2020, by the end of this decade, it is expected to reach $15.5 billion – with a compound annual growth rate (CAGR) of 22.1 per cent.

But where do tech leaders in Italy stand on their “Data & Insight” strategies? According to 51 per cent, “Data & Insights initiatives are aligned with business priorities and have clearly defined business outcomes,” 50 per cent, “Data & Insights competencies will enable the company to generate revenue or gain competitive advantage,” while 42 per cent answered that “core data management strategy and governance processes are coordinated and aligned within the company.”

Tech investment on the rise: it will be worth 5.85 per cent of revenues in 2024

Companies’ investments in technology on a global scale are increasing significantly. The average technology budget of companies as a percentage of revenues has increased from 4.25 per cent in 2020 to 5.49 per cent in 2022, with a forecast of 5.85 per cent for 2024. Financial services, insurance, and healthcare are the only areas that have seen a slight decline in tech investments in recent years. Still, this trend can be attributed to the significant investments already made in past years that are now stabilising and the current global economic conditions, which may lead some companies to reconsider their investment strategies.

However, simply making investments aligned with one’s tech strategy may no longer be enough. Indeed, technology leaders must also begin to measure and share the value of these investments with their company peers. A challenge that should not be underestimated: 6 out of 10 C-level respondents say that quantifying the benefits of individual technology investments is often not straightforward. “Achieving and creating business value through an effective business strategy must take into account initiatives to be undertaken in all areas of the business. Integrating investment initiatives within a strategic roadmap will provide 360-degree visibility of business plans,” Rossi concludes.

Antonino Caffo has been involved in journalism, particularly technology, for fifteen years. He is interested in topics related to the world of IT security but also consumer electronics. Antonino writes for the most important Italian generalist and trade publications. You can see him, sometimes, on television explaining how technology works, which is not as trivial for everyone as it seems.