Hybrid cloud infrastructure, digital products and services, predictive analytics, data security, software development and roughly 6,000 apps. Those are some of the larger line items in the $14 billion 2022 IT budget Lori Beer, JPMorgan Chase’s global CIO, oversees — along with a little research-and-development spend on metaverse technologies.
“Sometimes people get stuck on the number,” Beer said during the Wall Street Journal’s CIO Network Summit on Sept. 20. “The number is big — it’s $14 billion. But we are a large company that supports a lot of products and services, a lot of which are technology-driven.”
Tech budgets are expected to increase heading into 2023, even as companies cut back spending in other areas to offset the impacts of inflation, economic downturn and geopolitical instability.
Global tech spending is forecast to top $4.8 trillion this year, according to a report released Thursday by Forrester, with one-quarter of companies expecting tech spend to grow by more than 5% in the next 12 months.
Framing IT investments in business terms and stressing the business value of modernization initiatives is key to getting C-suite buy-in on her budget, said Beer, who was named CIO of JPMorgan Chase’s corporate and investment bank in 2016 and promoted to global CIO the following year.
“You have to change the narrative away from ‘we’ve spent $14 billion, and we have 6,000 apps’ [and connect] it to the business,” Beer said.
To achieve that connection between business and IT, Beer follows a three-pronged strategy:
- Showing how tech is a core part of business strategy investment instead of talking about it independently.
- Fostering credibility by spotlighting investments with a short-term return, but being transparent and disciplined about execution.
- Clearly articulating the value of technologies that are not primary areas of investment but require some spending to sustain innovation.
Close to half of the budget — $6 billion — is devoted to implementing new digital products and services to support growth and innovation and the tech required to run daily operations, Beer said.
Another $4 billion is aligned to the firm’s four major lines of business: Chase brand retail banking, investment banking, commercial banking and asset wealth management.
What’s left of the budget goes to infrastructure modernization and digital transformation of business processes.
“The rest of those dollars we spend on making sure we're building firm, wide platforms that give us scale,” Beer said. “We do that across many aspects [of the business], including our infrastructure, our software development lifecycle and our model development lifecycle for data science.”