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Change ahead as Australian CIOs prioritise new products and services developments

Change ahead as Australian CIOs prioritise new products and services developments

Priorities move away from cost savings as CIO role continues to blur with line-of-business

With larger budgets dedicated to innovation, Australian IT departments are jumping on new technologies for pilot projects and wider deployment at an unprecedented rate - Telsyte managing director, Foad Fadaghi

With larger budgets dedicated to innovation, Australian IT departments are jumping on new technologies for pilot projects and wider deployment at an unprecedented rate - Telsyte managing director, Foad Fadaghi

Australian CIOs are introducing new products and services in a bid to avoid becoming irrelevant, forming key business priorities for 2017.

According to findings from research analyst firm, Telsyte, this contrasts with executive priorities in 2014, which were focused on saving money and generating greater profit through improving business processes and productivity.

Consequently, IT has become increasingly strategic for Australian organisations in a time of unprecedented change with 67 per cent of IT departments providing regular updates to the board of directors - a jump from seven per cent from 2014.

Today, IT is now seen as the main driver in “transforming” organisations with the study revealing that on average, 57 per cent of IT budgets are now spent on transformation (32 per cent) or innovation (25 per cent) programs, compared to 43 per cent spending on operations or “keeping the lights on”.

“A critical tipping point has been reached with Australian organisations rapidly adopting emerging technologies, developing new products and services and looking to ICT to build competitive advantage in the face of increased global competition, and driving an intelligent automation revolution” Telsyte managing director, Foad Fadaghi, said.

Fadaghi said these new IT spending patterns show that CIOs are "collaborating closely" with the heads of lines of businesses internally.

According to Telsyte, IT spend is spreading outside of the traditional walls of IT departments and the study found that more than half of CIOs expect to see line-of-business IT spending to exceed IT department spending within five years.

Telsyte senior analyst, Steven Noble, claimed ‘Shadow IT’ to be merely a fragment of the seismic shift in the role of IT in modern business.

“This change invites CIOs to play a leading role in determining how companies create new products and services, and in how they bring employees together to create value,” he said.

“These shifts are a direct outcome of the changing priorities facing the IT leader, and elevating CIOs to the status of ‘manager of complexity’ and strategic advisor unlike ever before.”

Telsyte’s study also revealed Cloud intentions are still strong, with 50 per cent of organisations looking to increase spending on infrastructure-as-a-service (IaaS).

Similarly, the software opportunity is shifting to platform-as-a-service (PaaS) with 70 per cent of IT leaders intending to use PaaS solutions to develop software, as it is deemed a key enabler in building customised applications.

Additionally, the study showed more than a third of organisations citing challenges associated with software customisation, increasing the appetite for PaaS and in-house software skills or recruitment.

“With larger budgets dedicated to innovation, Australian IT departments are jumping on new technologies for pilot projects and wider deployment at an unprecedented rate,” Fadaghi added.

Results from the study reflect Fadaghi’s statement, in that IoT is quickly approaching mainstream with 22 per cent companies having IoT programs in production, or pilot programs and in development, while 29 per cent have IoT devices and a strategy, but nothing in operation yet.

Additionally, one in three businesses intend to use robotics and 25 per cent of larger organisations with more than 500 employees, are already using Robotic Process Automation (RPA).

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