Thursday, 17 July 2014 07:17

More IT spend now outside IT department Featured

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The relative decline of the IT department continues. A growing proportion of IT spend in businesses in Australia is taking place outside the IT department, as end user individuals and departments increasingly run their own show.

The trend is confirmed by a new study from market researcher Vanson Bourne and sponsored by enterprise software vendor CA Technologies. Results of the  study, ‘TechInsights Report: The Changing Role of IT and What to Do About It’, show that while 65% of current IT spend is controlled by the IT department, this will drop to only 55% in the next three years, with other lines of business taking over more aspects of IT.

“As businesses continue to respond to customer and employee demand for new applications, this trend will continue – and more importantly accelerate – in the years to come,” says Hope Powers, CA Technologies managing director for Australia and New Zealand.

She says that with nearly half of the IT spend set to happen outside of IT in three years, IT departments must play a more strategic role in corporate decision-making to remain relevant. The survey shows that Australian IT managers agree, with 43% saying that being a strategic business partner will be the main role of IT in three years’ time, compared to only 29% believing this is the main role of IT today.

“The transformation of technology from a centrally- managed IT responsibility to a corporate-wide business enabler is transforming Australian enterprises and reshaping the way technology is purchased, deployed and used,” says Powers.

“The consequences for IT leaders are enormous, because they must now become senior advisors who influence and guide, and not only manage, a corporation’s IT investments.

The reports shows that the influence of business lines on IT budget is slowly impacting the amount of IT budget Australian organisations allocate to maintenance activities. Respondents say that the budget split is currently 50/50 between ‘keeping the lights on’ activities and delivering innovation.

But this figure is expected to shift in favour of innovation—to 57%—in three years, as buying power continues to increase outside of central IT departments. The report also finds that the relationship of IT and lines of business is changing in Australia: 38% say IT acts as a service broker or consultant, rather than as an exclusive supplier.

The reports shows that IT leaders need to better align with the business and educate management in the face of disruptive technologies such as cloud, big data and mobility: 49% say IT needs to provide more training on new technologies, and 47% say IT needs to strengthen its relationship with executive management to secure more support.

Vanson Bourne conducted this survey of 1,300 senior IT leaders worldwide in six Asia Pacific countries (Australia, China, India, Japan, Singapore and South Korea) and 15 other countries around the world on behalf of CA Technologies.

For more information on the research can be found here.


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Graeme Philipson

Graeme Philipson sadly passed away in Jan 2021 and a much valued senior associate editor at iTWire. He was one of Australia’s longest serving and most experienced IT journalists. He is the author of the only definitive history of the Australian IT industry, ‘A Vision Splendid: The History of Australian Computing.’He was in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time weekly IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism. Graeme will be sadly missed by the iTWire Family, Readers, Customers and PR firms.

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