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Report: Line-of-business budgets to outstrip IT department spends in five years

Report: Line-of-business budgets to outstrip IT department spends in five years

Telsyte Australian Digital Workplace Study 2015 predicts wave of disruption

More than half of Australian CIOs believe line-of-business IT spending will exceed central IT spending within five years.

That's according to the the Telsyte Australian Digital Workplace Study 2015, which covers trends in business ICT spending and strategy, and how IT and business leaders are preparing for the impact of emerging technologies.

Telsyte predicts Australian businesses will experience a new wave of disruption in 2015 as the combination of wearable technology, remote working, online services and business unit technology spending change traditional IT spending and strategies.

Telsyte senior analyst, Rodney Gedda, said business units like operations, marketing and finance have always had a say in the type of IT they use.

"But in today’s climate of on-demand procurement it’s easier than ever work with – or by-pass – IT to get a service they need," he said.

“Today’s operations and marketing managers rely on technology to deliver business outcomes and the CIO is no longer the source of all procurement decisions."

Telsyte's 100 page report covers what it considers to be the key trends and strategies CIOs are employing to manage information and deal with social and technological change.

The report found Australian IT departments were also having to deal with more business unit IT spending, with 79 per cent of organisations having at least one line of business – including marketing, operations and finance – with their own IT budgets.

Gedda said this was up 5 per cent from 2014 and showed a growing demand for IT services within areas such as marketing.

"Combine this with more accessible Cloud-based applications and the CIO has another information management procurement channel to deal with,” he said.

"Adding the central IT function still controls on average greater than 70 per cent of the total spending value.

The report also found the appetite for investment in 2015 was strong with organisations looking to increase ICT budgets by an average of 5 per cent and more than half (57 per cent) of CIOs expect in-house IT staff numbers to increase this year.

The areas organisations are most looking to increase their spending are in Cloud computing, mobility, software-as-service, and Cloud unified communications and telephony.

Gedda said operational cost savings remained the top business priority for 2015 with "both revenue growth and business process improvement a higher priority than they were in 2014,” he said.

The proliferation of consumer technology, including wearable computers, will extend the reach of the bring your own device (BYOD) phenomenon and organisations will need to prepare for more unmanaged devices on their networks, according to the report.

“Like smartphones before them, wearable computers like augmented reality headsets might have business applications and people will find ways to be productive with them at work,” Gedda said.

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Tags ICTAustralian spending strategiesline of businessTelsyte senior analystRodney GeddaTelsyte Australian Digital Workplace Study 2015

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