Australian technology spend to hit AU$78.7 billion in 2015: Gartner

Technology spend has been forecast to grow in both Australia and New Zealand, but the ones with the spending power are not in IT.
Written by Aimee Chanthadavong, Contributor

Technology spend is expected to reach AU$78.7 billion in Australia and NZ$11.6 billion in New Zealand in 2015, according to Gartner.

While 58 percent of chief information officers in Australia and New Zealand expect that their budgets will flatten or decline, technology spending is forecast to grow 4.1 percent in 2015 in Australia compared to 1.75 percent in 2014, and 2.9 percent in New Zealand, up from 1.2 percent in 2014.

Peter Sondergaard, senior vice president at Gartner and global head of research, said the results represent the shift in IT spending power, where the demand and control is moving away from IT and towards business units closer to the customer.

He said that currently, 38 percent of global IT spend is outside of IT. By 2017, it will increase to over 50 percent.

"Digital startups sit inside your own organisation, in your marketing department, in HR, in logistics, and in sales. Your business units are acting as technology startups," he said.

"Australia and New Zealand are increasingly known for creative and design expertise, with leading global vendors looking here to make acquisitions. You need to tap into this in your organisation and make it a competitive advantage.

To match the spend, Gartner has predicted that by 2018, digital businesses will require 50 percent fewer business process workers, but will in turn drive a 500 percent boost in digital jobs around smart machines, robotics, automated judgment, and ethics.

Sondergaard advised that businesses need to build talent for the digital organisation of 2020 now.

"The new digital startups in your business units are thirsting for data analysts, software developers, and cloud vendor management staff, and they are often hiring them faster than IT. They may be experimenting with smart machines, seeking technology expertise IT often doesn't have," he said.

In a separate Gartner survey, 79 percent of CIOs in Australia and New Zealand revealed that they are aware they need to change their leadership style in the next three years in order to adapt to the changing digital world.

According to the survey, 93 percent of Australian and New Zealand CIOs agreed that in addition to the considerable opportunities it brings, the digital world is creating new, different, and higher levels of risk, and 66 percent said that the discipline of risk management is not keeping up.

Gartner also indicated that business intelligence and analytics will be the top technology priorities for CIOs in 2015. CIOs in Australia and New Zealand also ranked cloud and mobile technology as high priorities for next year, while for CIOs globally, it will be infrastructure, datacentres, and cloud.

Despite these priorities, Gartner's survey showed that Australian and New Zealand CIOs lag behind global counterparts when it comes to thinking about emerging technologies. For example, 71 percent said that robotics is "not relevant right now", compared to 63 percent globally, and 64 percent held the same view on smart machines and 3D printing, compared to 49 percent and 60 percent globally, respectively.

Gartner vice president and executive partner Graham Waller said that many technology leaders face three persistent issues that impede digital opportunities.

"In order to grasp digital opportunities, CIOs need to flip from legacy first to digital first in terms of technology leadership, from what's visible to what's truly valuable in value leadership, and from control first to vision first in people leadership," he said. "In short, to thrive in this digital era, CIOs must flip to digital leadership.

"The digital world has moved from the shadows to centre stage. Digital is a game changer, creating winners and losers in all industries and geographies, including Australia and New Zealand."

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