IT budget cuts put Australia behind competitors

In its annual global survey of CIOs, Gartner Executive Programs found Australian IT leaders face significant challenges compared to their global counterparts.

The survey found that, while Australian businesses expect IT to support growth, many were cutting IT budgets and falling behind the rest of the world in digitalisation, raising the prospect of a digital leadership vacuum.

Australian organisations have fewer chief digital officers (1.8% compared to an average of 6.6% globally), outsource less and consume fewer public cloud services than worldwide averages.

With IT budgets shrinking by 0.1% (compared to global growth of 0.2%), Australian IT leaders have less money to fund growth. A closer look at IT spending shows 26% 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.

“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.

A digital leadership vacuum

According to the Gartner report, most businesses have established IT leadership, strategy and governance, but have a vacuum when it comes to digital leadership. To exploit digital opportunities and ensure the core of IT services are ready, there must be clear digital leadership, strategy and governance.

Gartner recommends that all business executives need to become digitally savvy. Yet in Australia, less than 2% of businesses have appointed a chief digital officer, compared to 6.6% globally.

When it comes to using the cloud, survey data shows that one-fifth of Australian businesses and governments have made significant investments in public cloud, placing them slightly behind their global peers.

The other striking difference between Australian IT leaders and their peers is the type of cloud services being purchased. Only 43% of Australian businesses have invested in SaaS, compared to a staggering 72% globally. This could lead to Australian businesses missing out on the flexibility benefits of SaaS, which offer turnkey solutions to IT service needs.

Image courtesy of Fabio Marini under CC