Dive Brief:
- Financial firms plan to increase spending on software solutions this year despite making costly purchasing decisions in the recent past, according to Capterra. The IT marketplace surveyed 3,500 professionals, including 401 finance leaders for the January report.
- Seven in 10 respondents said their organization regretted a software purchase made in the last 18 months. Nevertheless, more than three-quarters of organizations expect to boost spending on accounting, AI, IT management and security solutions, Capterra found.
- Companies that experienced buyer’s remorse cited problematic vendor handoffs and unmet expectations as causal factors. Financial organizations also regretted purchasing solutions that were too basic for their needs and software that failed the ROI test.
Dive Insight:
Technology investments meant to drive the business can become major pain points when procurements go awry. The total cost of poor decisions can be difficult to calculate.
Nearly 3 in 5 respondents said a suboptimal solution had substantial financial downsides and 5 in 10 said a purchase contributed to security vulnerabilities, Capterra analyst Eduardo Garcia said in an email.
Software purchases consume training time, implementation expenses and IT staff resources. Procurement processes eat into the executive calendar, too, according to a Vertice analysis published last year. The IT management solution provider found companies spent an average of 385 hours annually engaged in SaaS and cloud purchase and contract renewal meetings.
But the potential upsides of an upgrade outweigh the risks for most companies. Technology leaders across industries expected bigger IT budgets this year, according to Forrester, if only to keep pace with inflation.
Gartner forecasted a nearly 10% year-over-year increase in IT spending in 2025, with the software category increasing 14% to more than $1.2 trillion. AI features will be a major driver, Gartner Distinguished VP Analyst John-David Lovelock told CIO Dive.
The financial sector is particularly bullish on generative AI.
Garcia cautioned firms against getting swept up in the AI hype until they’ve got clear ROI metrics and implementation plans.
“Financial organizations often regret their software purchases because they fail to clarify goals and desired outcomes early in the process,” Garcia said. “Involving end users — such as those from the accounting team — can provide valuable insights into user interface requirements and functionality.”
Finding fit-for-purpose tools as AI solutions proliferate remains difficult. Nearly 4 in 10 financial firms said identifying the right technologies to adopt is a top challenge this year, according to Capterra.
