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Gartner: A/NZ organisations increased investment in digital innovation during COVID

By Shannon Williams
Mon 2 Nov 2020
FYI, this story is more than a year old

Fifty-four percent of Australian and New Zealand CIOs say funding for digital innovation in their organisation has increased this year as a result of the COVID-19 pandemic, and two-thirds expect it to increase in 2021, according to new research from Gartner. 

The 2021 Gartner CIO Agenda survey gathered data from 1,877 CIO respondents in 74 countries, including 111 CIOs in ANZ, across the public, private and non-profit sectors.

The digital maturity of organisations in ANZ continues to rise. The percentage of CIOs who report being at the ‘scaling’ and ‘harvesting value’ phases of digital transformation now sits at 47%, a few points higher than last year (43%) and close to the global average (48%).

Steady progress isn’t enough anymore, though, the survey found. Boards have CIOs focused on acceleration, and 2021 will be a race to digital, with the spoils going to those organisations that can maintain the momentum built up during their response to the pandemic.

“Last year, I told CIOs that success in 2020 meant increasing the preparedness of both the IT organisation and the enterprise as a whole to withstand impending business disruption,” says Andy Rowsell-Jones, research vice president at Gartner. 

“This truth came at enterprises full force with the COVID-19 pandemic. In 2021, CIOs must build on the momentum they created for their enterprises and continue to be involved in higher-value, more strategic initiatives.”

Sixty percent of ANZ respondents to the survey said that the CIO/CEO relationship strengthened as a result of the COVID-19 pandemic, and 70% reported increased engagement with their CEO, especially ad hoc, informal interactions during the crisis.

ANZ organisations are further down the path to recovery than most other regions, with 44% of ANZ CIOs reporting that their organisation has planned and is now implementing their “new normal strategy”, compared to an average of 33% globally.

Support for remote work

The biggest accomplishment for many CIOs in 2020 was a “classic IT responsibility” — provisioning laptops and VPN connections for remote workers — but it was still “heroic work,” according to Rowsell-Jones.

According to ANZ CIOs, two-thirds of employees are now able to work from home, and 54% of those are now working from home more than half of the time. Two-thirds (67%) of ANZ CIOs expect this to increase in 2021, compared to 52% globally.

“Many CIOs managed to get thousands — maybe even tens of thousands — of workers set up remotely in just a few weeks to keep the enterprise running during the lockdown. CIOs can be justly proud of this accomplishment,” says Mr. Rowsell-Jones.

Expectations of 2021 IT budget growth

Globally, survey respondents projected a 2% IT budget increase for 2021, on average – slightly down from the 2020 survey (2.8%). Respondents in ANZ reported on average flat budgets for 2021 compared with this year. In the Asia Pacific region overall, CIOs expect their budgets to grow 1.9% on average.

Technology priorities in 2021

The list of technologies that interest CIOs looks roughly the same as in recent years.

Gartner asked CIOs to nominate which technology area they expect will be a “game changer” for their enterprise in 2021. Artificial intelligence and machine learning were ranked no. 1 by CIOs globally, but came in at no. 2 for ANZ CIOs.

Table 1. Top 5 Game Changing Technologies for CIOs in ANZ and Worldwide

Australia & New Zealand

Global

1.

Business intelligence and data analytics

Artificial intelligence and machine learning

2.

Artificial intelligence and machine learning

Business intelligence and data analytics

3.

Digital workplace

Cloud (including XaaS)

4.

Cloud (including XaaS)

Digital workplace

5.

Customer/citizen/user experience

Robotic/office process automation

When asked about their enterprise's plans in relation to a provided list of digital technologies and trends, 91% said they had already deployed digital workplace technologies to support working from home. A third have already deployed distributed cloud, and 27% have deployed robotic process automation (RPA) with a further 40% planning to do so within the next two years.

5G is a longer-term consideration, with 60% of CIOs planning to deploy it between 12 months and three years from now. Sixty percent of CIOs in ANZ and almost half globally said they have no interest in blockchain.

CIOs continue to prioritise cybersecurity investments 

CIOs reported investment shifts toward technologies that support digitalisation. With the opening of new attack surfaces due to the shift to remote work, cybersecurity spending continues to increase. 67% of ANZ respondents are increasing investment in cyber/information security, second only to business intelligence and data analytics (73%).

In third place is cloud services and solutions (53%), with core system improvements/transformation and customer/user experience rounding out the top five technology areas targeted for greater investment in 2021. Fifty-one percent of CIOs said they planned to reduce investment in infrastructure and data center technologies in 2021.

“The support for remote work that the COVID-19 pandemic brought on might be the biggest win for CIOs since Y2K. They now have the attention of the CEO, they have convinced senior business leaders of the need to modernise technology, and they have prompted boards of directors to accelerate enterprise digital business initiatives."

New customer expectations

CIOs in ANZ reported significant changes in the use of digital channels to reach customers or citizens, and demand for new digital services. Seventy-six percent of survey respondents said that demand for new digital products and services increased in 2020, with even more respondents (86%) reporting that it will increase in 2021.

Ninety percent of ANZ CIOs expect the use of digital channels to reach customers or citizens to increase even further in 2021.

The CIO’s role in sustainability

Half of ANZ CIOs expect no change in their enterprise’s focus on environmental and social sustainability (for example, environmental impact reduction, social dimension to sourcing/employment, donations to good cause) compared with its focus pre-COVID-19. In 2021, 47% of ANZ CIOs expect a small or significant increase in their organisation’s focus on sustainability, compared with 57% globally.

One-third (33%) of ANZ CIOs said that two years ago they were not involved in their organisation’s sustainability efforts, but that has fallen to only 8% now. CIOs see their role in this area increasing, with a small number (3%) expecting they would be leading their organisation’s sustainability efforts in two years’ time.

 

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