Tuesday, 18 November 2014 20:26

‘Dramatic’ shift to digital driving spending to $78.7 billion

Image courtesy of cooldesign freedigitalphotos.net/images Image courtesy of cooldesign freedigitalphotos.net/images

The growing digital economy is fuelling Australian spending on technology products and services, with the total spend expected to grow by 4.1% next year to $78.7 billion. In New Zealand, IT spending will reach NZ$11.6 billion over the course of next year.

With spending on the digital industry economy exploding right across the Asia Pacific region to US811 billion in 2015 – an increase of 7.4%.

The latest spending forecasts from global analyst firm Gartner were outlined to ANZ CIOs at Gartner’s Symposium/ITxpo on the Gold Coast today by Peter Sondergaard, senior vice president at and global head of research.

Sondergaard said the latest forecasts represent a “dramatic shift in IT spending power, with a shift of demand and control away from IT and toward digital business units closer to the customer”.

“Thirty-eight percent of global IT spend is outside of IT already, with a disproportionate amount in digital. By 2017, it will be over 50%,” Sondergaard said.

“Digital startups sit inside your own organisation, in your marketing department, in HR, in logistics and in sales. Your business units are acting as technology startups.

Australia and New Zealand are increasingly known for creative and design expertise, with leading global vendors looking here to make acquisitions. You need to tap into this in your organisation and make it a competitive advantage.”

According to Gartner estimates, 50% of all technology sales people are actively selling direct to business units, not IT departments, and millions of sales people, and hundreds of thousands of resellers and channel partners, are looking for new money flows in the fluid digital world, and “they are finding eager buyers”.

Sondergaard said there are seismic forces at work, creating permanent, structural changes in the business environment, and he said the impact that the digital business economy is having on the global IT industry is dramatic. “Since 2013 650 million new physical objects have come online. 3D printers became a billion dollar market; 10% of automobiles became connected; and the number of Chief Data Officers and Chief Digital Officer positions have doubled. In 2015, all of these things will double again.”

And, Sondergaard says that this year enterprises will spend over $40 billion designing, implementing and operating the Internet of Things, and “every piece of equipment, anything of value, will have embedded sensors. This means leading asset-intensive enterprises will have over half a million IP addressable objects in 2020.”

On jobs, Gartner says digital businesses will impact in different ways, and that by 2018, digital businesses will require 50% fewer business process workers, and digital business will drive a 500 % boost in digital jobs.

Gartner says that, right now, the hottest skills CIOs must hire or outsource for are:

•    Mobile

•    User Experience

•    Data sciences

But in the future, three years from now, the hottest skills will be:

•    Smart Machines (including the Internet of Things)

•    Robotics

•    Automated Judgment

•    Ethics

And, over the next seven years, there will be a surge in new specialised jobs, and the top jobs for digital will be:

•    Integration Specialists

•    Digital Business Architects

•    Regulatory Analysts

•    Risk Professionals

“The new digital startups in your business units are thirsting for data analysts, software developers and cloud vendor management staff, and they are often hiring them fast than IT,” Sondergaard told his Gold Coast audience. “They may be experimenting with smart machines, seeking technology expertise IT often doesn't have.

“You must build talent for the digital organisation of 2020 now. Not just the digital technology organisation, but the whole enterprise. Talent is the key to digital leadership. Build credibility and build the two-speed bimodal IT organisation.”

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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