Strategic business initiatives are driving growth in IT spend with more than half of respondents signalling they plan to increase spend, according to “Insights in Business IT Investments – Australia and New Zealand, 2018”, the latest Report from the ITNewcom MinterEllison Technology Consulting group, released today.
The Insights in Business IT Investments market study, now in its fifteenth year, provides a snapshot of the strategic and investment intentions of CIOs and senior technology executives in Australia and New Zealand including analysis of more than 250 deals. The analysis is by ITNewcom MinterEllison Technology Consulting the IT consulting arm of MinterEllison, launched earlier this year in July.
“It’s a positive sign for corporate Australia that more than half of respondents said they intended to make key strategic technology investments in the FY2018 financial year,” said Brendan Welsh, CEO ITNewcom . “It’s also significant that there is a strong focus on customers within that investment including the ‘customer’s customer’ segment.”
The Report findings show that large enterprise-wide strategic business investments are among the top initiatives and that some leading organisations are undertaking major customer-facing and digital business transformations. The market is strongly committed to outsourcing which has been a part of the broader technology landscape for two decades.
“The long-standing gradual growth of outsourcing as a proportion of IT spending looks set to continue,” he said. “However, survey participants indicate that “mixed” sourcing, that is a combination of insourced and outsourced services, remains the dominant IT sourcing strategy, particularly in the largest IT service groups being applications and infrastructure.”
Turning to the risk side, Anthony Lloyd, lead partner of MinterEllison Technology Consulting, “Insights in Business IT Investments – Australia and New Zealand, 2018” shows that clients in both the public sector and corporate Australasia are increasingly risk focused. They are looking for technology solutions which reduce their risk, are more cost efficient and easier to administer.
“It’s notable that as much as outsourcing is on the rise, offshoring has come off the boil” said Mr Lloyd. “Responses show companies are getting smarter about offshoring, benefiting from a mature industry, which has now reached significant levels in Australia and New Zealand and created savvy customers. Notably, public sector respondents are considering offshoring application and infrastructure services.
He said that converting those considerations to actual deals may prove tough, however, Mr Lloyd also pointed to a commitment to innovation spend with companies adopting a bimodal approach. Almost half of respondents said they recognised the need to invest in speed/agility to market in technology delivery.
“This is one that uses two streams of work: one centred on stability of execution, the other on rapid innovation,” he said. “The first mode tends to be used for more predictable areas of IT and business process; the second is more likely to be applied in rapidly changing areas requiring agility, such as digital business.”
Mr Lloyd also pointed to one of the six report highlights which shows that security is front of mind for business and government.
“Both public and private sectors are calling for suppliers with the right mix of security talents and a commitment to develop a trusted brand. Risk audit and vulnerability testing are most frequently outsourced, particularly in the private sector,” he said.
“Insights in Business IT Investments – Australia and New Zealand, 2018” is a study based on feedback provided by CIOs and senior technology executives. ITNewcom collected data on more than 100 suppliers and 260 deals including detailed analysis of 169 deals. From this information a number of key IT benchmarks emerged which provide an authoritative analysis of the current state of the Australian and New Zealand IT market. Participating organisations represent a mix of corporate and government clients across major industry sectors. They include mainstream and major IT services buyers from both sides of the Tasman.