IT budgets in the Australian business landscape are shrinking, despite IT budgets rising globally, according to Gartner's latest annual chief information officer (CIO) survey.
According to the 2014 CIO Agenda: An Australia Perspective report, the country's IT budgets are collectively contracting by approximately 0.1 percent. Meanwhile, globally, IT budgets are on the rise at around 0.2 percent.
The survey found that Australian IT leaders faced "significant challenges" compared to their global counterparts, with Australian IT leaders having less money with which to fund growth.
"A closer look at IT spending shows 26 percent of IT spending will be outside of the IT budget. This could raise integration issues in the short term and governance issues in the long term," said Gartner.
The survey also found that Australian organisations had fewer chief digital officers — 1.8 percent compared to an average of 6.6 percent globally — outsource less, and consume fewer public cloud services than worldwide averages.
The survey data showed that about one-fifth of Australian businesses and governments have made significant investments in public cloud, placing them slightly behind their global peers.
A striking difference between Australian IT leaders and their peers, according to Gartner, was the type of cloud services being purchased. Only 43 percent of Australian businesses had invested in software-as-a-service (SaaS) compared to 72 percent globally.
"This could lead to Australian businesses missing out on the flexibility benefits of SaaS, which offer turnkey solutions to IT service needs," said Gartner.
However, Gartner also noted that in 2013, Australian federal and state governments announced 'cloud first' strategies and procurement models for IT infrastructure and applications.
While Australia's public-sector migration to cloud delivery models is currently in its early stages, Gartner said it's indicated that infrastructure-as-a-service and SaaS adoption would make significant progress this year.
The Gartner report said most businesses in Australia have established IT leadership, strategy, and governance, but have a vacuum when it came to digital leadership.
The report suggested that there should be clear digital leadership, strategy, and governance if businesses wanted to exploit digital opportunities and ensure the core of IT services are ready for market pressures.
"If Australian IT leaders are to 'tame the digital dragon', they need to address three top priorities: developing digital leadership, renovating the core of IT, and building bimodal capability," said Gartner vice president, Andy Rowsell-Jones.