Digital a big deal down under

Published on the 12/05/2017 | Written by Donovan Jackson

digitransform_Gartner survey

Forward-looking tech leaders ahead of the curve – but will they stay there…

A/NZ CIOs place a higher priority on customer focus and digital than their global peers, with more investing in digital initiatives and fewer in core systems such as ERP. That’s according to the market watcher’s annual CIO survey which gathered data from 2,598 CIO respondents (173 from A/NZ) in 93 countries and all major industries.

The study shows that A/NZ CIOs are intensifying their efforts to strengthen digital leadership, organisation and technology capabilities this year, with 49 percent participating in digital ecosystems as platforms to exchange information and interact electronically with competitors, customers, regulators, stakeholders and other enterprises.

Gartner defines ‘digital ecosystems’ as ‘an interdependent group of actors (people, things and organisations) that share standardised digital platforms in order to interact with one another in pursuit of a commercial or social objective’.

In its statement, research director Jenny Beresford said, “The implications of digital ecosystems for A/NZ CIOs are profound. Many will need to shift their enterprise from a linear value chain business, trading with well-known partners and adding value in steps, to being part of a faster and more dynamic networked digital ecosystem. While many are actively participating now, A/NZ CIOs need to take a more assertive and ambitious outlook to avoid falling behind in 2018.”

According to the survey findings, A/NZ CIOs expect lower [digital] budget growth in 2017 (2 percent) than last year (2.9 percent), which is also behind the 2017 global average of 2.2 percent. In Asia Pacific, the average increase expected is 4.3 percent, skewed by CIOs in both China and India reporting over 10 percent average increases in their IT budgets this year.

CIOs globally are reporting that they expect to spend more on digital in 2017, with A/NZ CIOs ahead of the overall average on investment and focus. A/NZ CIOs exceed global peers in their expectation of digital spend from the IT budget this year, as well as in their projections for 2018.

“One of the most significant digital investment challenges for A/NZ CIOs is that digital programs require a multi-year budget approach,” said Beresford. “They share frustration with their business executives in trying to accelerate digital investment while budgets are still adjusted on a quarterly or annual basis, lagging changes in revenue forecasts and pace of digital demand.”

The survey reveals that A/NZ CIOs are driving cost optimisation opportunities and applying savings to digital reinvestment and/or reducing technical debt.

Gartner believes that A/NZ CIOs are more successful than global CIOs at achieving [digital] cost optimisation targets. On average, A/NZ respondents who have a cost optimisation target have achieved 78 percent of their goals.

In terms of cost efficiencies, A/NZ CIOs are very business focused on average. They are more likely to prioritise using IT for business cost optimisation over cutting the cost of day-to-day [digital] services than global peers.

The top areas of new technology investments show that spending and opportunity continues in big data and analytics, and that cloud continues to have significant momentum. Digital investment is more popular among A/NZ CIOs (28 percent) than global peers (16 percent). Proportionally fewer A/NZ CIOs are reporting core or ERP systems to be a top technology area than their global peers.

In terms of disruptive technologies, A/NZ CIOs lean more toward less adopted technologies as potential disrupters than their global peers on average. A/NZ CIOs consider advanced analytics, virtual personal assistants, machine learning and augmented reality to be more important as potential disrupters and sources of competitive advantage than CIOs globally.

Still wondering if there is any difference between the terms ‘digital transformation’ and ‘IT project’? Wikipedia helpfully points out that ‘Digital transformation is the change associated with the application of digital technology in all aspects of human society.’

Last we looked, ‘digital technology’ meant ‘computers’, so we’ll stand by the contention that ‘digitisation’ started with UNIVAC 1.

More on the 2017 Gartner CIO Agenda Survey.

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