A/NZ CIOs are ahead on digital transformation

CIOs in Australia and New Zealand are more focused on digital transformation and improving the customer experience than their global peers, according to research from Gartner.

The region's CIOs are more likely to be investing in digital initiatives and less likely to be spending on core systems such as enterprise resource planning (ERP), a survey from the research firm shows.

Nearly half (49%) of A/NZ CIOs are participating in digital ecosystems — sharing a standardised digital platform with competitors, customers, regulators, stakeholders and other enterprises, the survey shows.

"The implications of digital ecosystems for ANZ CIOs are profound," Gartner Research Director Jenny Beresford said.

"Many will need to shift their enterprise from a linear value chain business, trading with well-known partners and adding value in steps, to being part of a faster and more dynamic networked digital ecosystem. While many are actively participating now, ANZ CIOs need to take a more assertive and ambitious outlook to avoid falling behind in 2018."

But digital transformation initiatives are made more challenging by declining IT budgets — ANZ CIOs expect an IT budget growth of just 2% this year, a reduction from the 2.9% growth of last year and below the global average of 2.2%.

"One of the most significant digital investment challenges for ANZ CIOs is that digital programs require a multiyear budget approach," Beresford said.

"They share frustration with their business executives in trying to accelerate digital investment while budgets are still adjusted on a quarterly or annual basis, lagging changes in revenue forecasts and pace of digital demand."

Fortunately A/NZ CIOs are more successful than the global average at achieving IT cost optimisation targets, Gartner said. On average, ANZ respondents with a cost optimisation target reported achieving 78% of their goals.

The top technology priorities for A/NZ CIOs in 2017 include business intelligence and analytics — with 42% of respondents naming this one of their top three priorities — followed by cloud (33%) and digitalisation or digital marketing (28%).

Mid-ranked priorities are mobile (19%), enterprise resource planning (17%), infrastructure and data centre (16%) and customer relationship management (14%). Equal lowest on the list of priorities are cyber or information security, industry-specific applications and legacy modernisation (9% each).

Image courtesy Gartner.