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The pandemic is followed by growth

Despite the ongoing corona pandemic, providers in the digital industry are optimistic about the 2022 financial year that has just begun.
E-3 Magazine
March 22, 2022
Growth follows the pandemic
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This text has been automatically translated from German to English.

Almost three quarters of companies and public authorities will increase IT spending in the coming year. The forecasts for 2023 are similarly positive. However, the additional investments will not flow primarily into new developments, but into modernizations of existing system landscapes. This is shown by the preliminary results of Capgemini's IT Trends Study, in which 195 IT and business managers from large companies and public authorities in Germany, Austria and Switzerland took part in September and October. 

For the coming year, 73 percent of respondents expect IT budgets to increase. This is the highest figure since the survey began in 2003. Just under a third of the study participants will even increase their IT investments by more than ten percent in 2022, compared with only a fifth of respondents in the previous year. Around eleven percent will cut their IT spending, compared with just under 15 percent last year. 

Trend continues

The forecasts for 2023 are also very positive: just under 73 percent of respondents expect higher spending, and almost a third expect increases of more than ten percent. Eighty-three percent of the company representatives surveyed said that their organization is expected to grow economically or organizationally in 2022. Only ten percent have no plans for expansion and want to stabilize. 1.4 percent of the companies are to become smaller.

Much to catch up

The fact that management consultancies in particular are expecting significant double-digit revenue growth is one of the findings from the current Lünendonk flash survey of managers in various business-to-business segments. However, consultants had a lot of catching up to do after 2020. Strategy, organization and process consultants expect revenue growth of 12.4 percent on average. They are followed by IT service and consulting firms with an average revenue growth forecast of 11.4 percent. Only the auditors and tax consultants surveyed are more cautious: they expect a 4.6 percent increase in revenue in the current fiscal year.

Digitization is a hot topic

When asked about the main pain points of their clients, 58 percent of all survey participants stated that digital transformation was the greatest need for consulting. Looking exclusively at management consultancies, this figure is as high as 83 percent - a sign that digitalization topics are increasingly finding their way into the portfolio. By contrast, by far the largest proportion of auditors and tax consultants perceive the shortage of skilled workers and recruitment difficulties among their clients as pressing.

Despite any pain points, it is already clear that the economic recovery, including high expectations of a burgeoning digital market, will continue to boost technology investments - despite possible adverse effects from the Omikron variant. Research and consulting firm Gartner agrees, forecasting a 5.1 percent increase in global IT spending in 2022 (to $4.5 trillion) compared to 2021. 

"2022 is the year the future returns for CIOs", says John-David Lovelock, Distinguished Research Vice President at Gartner. "They can now leave behind the crisis-driven, short-term projects of the last two years and focus on the long term. At the same time, CIOs will have to rely more on consulting firms and managed service companies to implement their digital strategies, due to skills shortages among employees, wage inflation and the struggle for labor."

Growth follows the pandemic

Sales development in 2021 and 2022 (forecast). Question: How will your company's sales in Germany develop? All participants; unadjusted; in fiscal 2021: n=85; source: Lünendonk.
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