Looking Ahead – IT’s Budget Transformation

20th September, 2016


Between 2014 and 2015, total IT spending didn’t change. But we saw the budget allocation shifting. Market research firm Computer Economics found more operational (3% increase) spending, flat or slightly reduced capital spending and flat hiring.1 The operational increase can be attributed to cloud service adoption and outsourcing to obtain digital transformation skills.


Close up of hand opening curtain with road behind it


ISG Research of the Global 2000 companies showed that 80% of the retail companies rely on some amount of outsourcing. 2The key reasons to shift to an outsourced solution included:

• Reducing IT costs
• Adding capacity
• Obtaining new capabilities

The study also showed that the desire to enable digital strategies increasingly drives the shift to outsourcing. By outsourcing business functions and thereby reducing traditional IT resource costs, companies can invest in business-transforming projects. Where are the funds being re-directed? For Retail, the need to improve customer engagement through a polished Omni-channel business is becoming do or die. Retailers need to sync their on-line and in-store product information so their customers see a consistent price across channels and the company can fulfill immediate product demand. Most suppliers are adopting GS1 standards as required by their customers. For example, this week all Google Merchants received notice that they must implement GTINs for product identification. In the Healthcare industries, government regulations often drive the use of GTINs and GLNs.


Implementing GTINs and syncing to the GSDN can present a major challenge. Since they lack experience with GS1 standards, many companies are relying on 3rd parties to help them with data sync.
As companies embark on the 2017 budget planning process, we expect continued focus and funding for digital transformation and increased managed service adoption. Operational budgets will continue to grow and enabling data sync will be top priority.


The EDI experts at Adept Engineering Solutions have experience with GS1 standards and GDSN implementations. Learn more about EDI managed cloud service here.


Difficult to fill position? That’s our specialty. www.levelupforce.com

1. http://www.zdnet.com/article/it-budgets-2016-surveys-software-and-services/
2. http://www.retaildive.com/news/why-more-and-more-retailers-are-outsourcing-their-it/423959/