Is Spain about to leap-frog the rest of the world where technology is concerned?

By Edward Haigh

You can divide IT expenditure, slightly crudely, into two camps at the moment:

The first is about upgrading, repairing and replacing existing IT systems. It's what a lot of people would think of as the old world of IT. It's about big, enterprise-wide, centralised, systems.

The second is about digitisation: it's about big data and analytics, social media, mobile, cloud, the internet of things, and all that sort of stuff.

Every year we ask clients about the projects they're planning to undertake over the course of the coming 12 months, and what's struck us recently is that, in many geographies, you get more people saying that they'll be upgrading their existing IT systems than you get saying they'll be investing new technology. It feels counter-intuitive, when all the hype is about new, exponential technologies, but that's usually the way: the hype comes first, the expenditure comes second. Indeed, every time we talk to clients we're reminded just how far behind the hype many of them are. I asked a client recently whether their organisation was investing much in things related to "big data" and had a vacant "big data?" by way of reply. He didn't know what I was talking about.

It's the case in the Nordics, it's resolutely the case in France,  and it's even the case in the US. In the UK and the GCC the focus is on both existing technology and new technology equally. In fact amongst clients from the world's biggest consulting markets only the Germans are more likely to say they'll be focussed on new technology. The conclusion we draw from this is firstly that the old world has not yet passed, and secondly that we're coming out of a period of underinvestment in IT which has left existing systems creaking and in need of an upgrade. That accounts for the German situation - the downturn wasn't as bad there as it was everywhere else, so investment probably remained relatively strong. There's less to fix in Germany.

But the Germans are joined by the Spanish - as we discovered in our recently published report on the Spanish consulting market - which is a little more curious. It seems fairly safe to assume that if there's been an underinvestment in technology in places like the US and the UK over recent years then the same has happened in Spain. So why are Spanish clients more likely to be investing in new technology?

I suspect it's because they're being forced into making tougher decisions. Most people investing in "old" technology are probably doing so with a degree of reluctance; reasonably reckoning that those systems will be obsolete in a few years and that they'll have to spend a load of money on the new technology - with all its attendant capabilities - that will supercede them. And I mean have to: it won't just be a case of back office managers trying to find the most effective, efficient systems, new technology will be demanded by people in the front office, too.

In Spain I suspect that turns into a choice: either you spend money upgrading your existing technology or you spend money on new technology. Choose the former and you may well be unable to do the latter for some time. Some clients will take the safe option and invest in what they've got, but I suspect some are making the conscious decision to take a risk and leap-frog straight to the future.

How that works out is something many clients may want to keep an eye on. Think about the GCC, for example: many clients there haven't even spent a lot of time investing in the old world yet, so they've got a choice to do something from scratch. Do they take the safe option and do what everyone else has already done some years ago (knowing that the technology and the expertise to install and run it is widely available and largely commoditised) or do they take the risky option and break new ground?

In places like the GCC deciding to take the risky option and getting it right may end up looking like a virtue borne of bravery and imagination. In Spain it would be a virtue borne of bravery and big sticks.