According to the McKinsey sixth annual “McKinsey Global Survey,” executives say their companies are boosting IT spending. Looking ahead, executives expect IT to create new platforms to support innovation and growth, help guide strategy with data and advanced analytics, and stay on top of possible new roles for mobile devices. Among respondents to this survey, the highest current priorities for IT mirror those of previous surveys: improving the effectiveness and efficiency of business processes and reducing IT costs. Also, 40% of respondents indicate that providing managers with information to support planning and decision making is quickly becoming a critical priority, up from 30% just a year ago. When asked what their organizations’ ideal priorities would be, executives cite more growth-oriented goals. For example, creating new products and services is a priority for 47% of respondents. In contrast, only 17% cite reducing IT costs. Satisfaction with IT’s effectiveness is increasing among business executives, says the report. Greater numbers of non-IT executives report being very or extremely happy with IT performance across several measures, ranging from a high of 61% for providing basic services cost-effectively (such as e-mail and technical support for laptops and desktops), to a low of 26% for proactively engaging with business leaders on new ideas or system enhancements. Current IT Priorities (% of Respondents; Ranked by 3 Groups) Priority% of RespondentsNon-IT ExecsIT Execs“Ideal” Priority Improving effectiveness of business processes 47% 1 2 1 Improving efficiency of business processes 45 2 3 4 Reducing IT costs 44 5 1 7 Provide information to support planning and decision making 40 3 4 3 Creating new products or services 29 4 6 2 Ensuring compliance with regulations 23 6 8 8 Entering new markets 20 7 5 5 Managing risk 14 8 7 6 Source: McKinsey Global Survey, December 2011 With a combination of rising faith in IT, the realization of competitive challenges ahead, and a more positive business outlook, executives expect to increase their new investments in IT capabilities in 2012, with almost a quarter expecting to increase investments by more than 10%. More than 60% expect to increase or maintain their IT operating expenses, a shift from last year when 60% of respondents expected the IT budget for operational spending to either decrease or hold steady. Expected Annual IT Budget Change, 2012 (vs. Previous Year; % of Respondents) Operating ExpensesNew Investments Increase 38% 58% No change 23 17 Decrease 31 17 Don’t know 8 8 Source: McKinsey Global Survey, December 2011 Respondents indicate that just over half of their current budgets go to infrastructure and core transactional applications. But when asked where they expect to be spending in three years, those two areas shrink to 41% of the total, while end-user communications and collaboration, innovation, and analytics capabilities increase to 46%, from 35% currently. Respondents highlight three barriers, in particular, to more effective use of data and analytics in decision making: