Published on the 28/10/2015 | Written by Beverley Head

Australia’s investment in technology is likely to grow in line with the nation’s expected rise in GDP – while New Zealand’s pace of IT spending growth will be a tad slower in 2016…

Speaking to 1,400 of the IT faithful at its annual symposium being held on the Gold Coast this week, IT analyst Gartner said that total IT spending would rise 2.8 percent next year in Australia, reaching A$80 billion in 2016. The Reserve Bank meanwhile has pegged GDP growth at between 2.75-3.75 percent for 2016.

In New Zealand, Gartner said IT spending would be above NZ$11.7 billion, 2 percent up on this year. That’s slightly behind the 2.5 percent GDP growth anticipated for NZ next year.

Peter Sondergaard, Gartner senior VP and global head of research, explained though that the real benefit of that investment in IT would not come through the hardware and software directly, but through the smarts surrounding their deployment. Gartner has already forecast that demand for Internet of Things will see organisations investing a combined global $US2.5 million a minute on IoT in 2016.

But Sondergaard warned that “Data is inherently dumb. It doesn’t actually do anything unless you know how to use it; how to act with it. Algorithms are where the real value lies. Algorithms define action. Dynamic algorithms are the core of new customer interactions.”

To be successful these algorithms need to ensure that a business can be customer centric, responding to customer needs even before the client knows what they want. This will then drive digital business.

According to Deloitte about 5 percent of Australia’s current GDP could be classed as coming from digital activities. The region’s CIOs seem to think that’s too low.

Gartner said ANZ CIOs expect their organisation’s digital revenue to more than double in the next five years, from 14 percent now (considerably higher already than Deloitte’s best guess) to 32 percent of total revenue.

While it’s an ambitious target, it’s considerably lower than expectations internationally. Gartner’s global CEO survey says that this cohort expect digital revenues to grow 80 percent by 2020.

To speed their progress Sondergaard urged ANZ businesses to embrace Gartner’s bimodal blueprint, which allows them to run legacy platforms to keep today’s business operating, while in parallel constructing new IT platforms that can support rapid growth digital businesses.

 

2016 IT Priorities

2016 Rank	Priority in ANZ	ANZ Percentage*	Global Rank
1	BI/analytics	43%	1
2	Cloud	33%	3
3=	Digitalisation/Digital Marketing	24%	5
3=	Mobile	24%	6
4	ERP	17%	4
5	Legacy Modernisation	16%	9
6=	Infrastructure and Data Centre	13%	2
6=	CRM	13%	11
7	Networking, Voice and Data Communications	12%	8
8	Industry-specific Applications	9%	10
9	Security	7%	7