​Developing new products top priority for Australian CIOs: Telsyte

A new study by Telsyte shows Australian CIOs are focusing more on the development of new products and services compared to two years ago when the focus was around reducing operational costs.
Written by Tas Bindi, Contributor

Australian CIOs are shifting their focus away from reducing operational costs and towards developing new products and services, according to new research by analyst firm Telsyte.

The Telsyte Australian Digital Workplace Study 2017, which surveyed 420 CIOs and IT decision makers, found that Australian enterprises are spending more of their IT budgets on product development, making it their number one priority compared to two years ago when their focus was on reducing operational costs.

The reason for this reshuffling of priorities, according to Telsyte, is so that enterprises can avoid becoming irrelevant in the face of domestic and international competition.

"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," said Telsyte Managing Director Foad Fadaghi.

To achieve digital transformation, CIOs are collaborating more with leaders in other business units within the organisation where IT spending is increasing.

The study also found that IT spend is spreading outside of traditional IT departments, with more than half of CIOs saying line-of-business IT spending will exceed IT department spending within five years. 8 percent of organisations believe spending by non-IT departments already exceeds IT department budgets.

Last month, John Roberts, former VP and analyst at Gartner Australasia, told ZDNet that working in partnership with all business unit leaders within a company is key to optimising costs and that there is a tendency among business units to hand over technology-related responsibilities to the IT department.

Roberts noted that IT shouldn't be considered a separate entity and that the total technology spend of an organisation needs to be managed across multiple divisions within the organisation.

"Digitalisation embraces every part of the organisation. A challenge [within organisations] is categorising what is and what is not [within the domain of] IT. But there is technology in every budget. What we need is a collaborative approach -- we need to be able to say: 'How can we manage all of this IT spend without duplication, redundancy, and waste?'," Roberts told ZDNet in October.

"When a department outside IT has a technology project, then the IT department may well provide resources into that project. For example, the project might need someone with security knowledge or someone who's a database expert. The project will also need input from the [relevant department] leaders so that [outcomes of the project] are in line with the needs of the department."

A majority of IT leaders, 70 percent, already use or intend to use Platform-as-a-Service solutions to develop and deploy customised software, according to Telsyte; and 84 perent of Australian organisations have at least one system in place to allow their staff to be mobile workers, whether it's providing a secure VPN system or supporting Bring Your Own Device and Bring Your Own Apps.

Telsyte's research indicates a greater uptake of emerging technologies among Australian enterprises, who are allocating about 25 percent of budgets to innovation, with 75 percent still going to managing operations and digital transformation initiatives.

3D Printing is gaining traction among enterprises with 24 percent using it or having exploratory projects in place, according to Telsyte's research. Gartner also forecasts significant growth in the 3D printing market: Nearly 456,000 3D printers will be shipped globally by the end of the year, doubling the 219,000 units that were shipped last year, with 44 percent growth in enterprise shipments alone.

In addition, one in three enterprises intend to use robotics, while 25 percent of organisations with more than 500 employees are already using robotic process automation, according to Telsyte's research.

Augmented reality (AR) and mixed reality (MR) is also of high interest, with 57 percent of enterprises currently using or intending to use AR/MR technology. Interest in Microsoft's HoloLens has been claimed to be "very high".

Telsyte's research also found that 22 percent of enterprises have IoT programs or pilot programs in production, while 29 percent have IoT devices and a strategy, but nothing in operation. Forrester predicts, however, that lack of cybersecurity skills will stifle the growth of IoT.

Last month, at the Everything IoT Summit in Sydney, professor Jill Slay, director at the Australian Centre for Cyber Security at UNSW in Canberra, communicated the same sentiment and added that Australia's lack of leadership around cybersecurity will also impact the growth of the IoT sector.

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