CIOs in Australia and NZ increased digital innovation investment during COVID-19

Gartner’s latest CIO survey uncovers interesting revelations.

About two-thirds of CIOs surveyed by analyst firm Gartner, said they expected digital investment to increase further in 2021, despite flat IT budgets.

According to the analyst 54 per cent of Australian and New Zealand (A/NZ) CIOs said 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 Gartner, Inc.’s annual global survey of CIOs.

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

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

Steady progress isn’t enough anymore, though. Boards have CIOs focused on acceleration, and 2021 will be a race to digital, with the spoils going to those organizations 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,” said Andy Rowsell-Jones, distinguished 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 A/NZ respondents to the survey said that the CIO/CEO relationship strengthened as a result of the COVID-19 pandemic, and 70 per cent reported increased engagement with their CEO, especially ad hoc, informal interactions during the crisis.

A/NZ organisations are further down the path to recovery than most other regions, with 44 per cent of A/NZ CIOs reporting that their organization has planned and is now implementing their “new normal strategy”, compared to an average of 33 per cent 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 Mr. Rowsell-Jones.

According to A/NZ CIOs, two-thirds of employees are now able to work from home, and 54 per cent of those are now working from home more than half of the time. Two-thirds (67 per cent) of A/NZ CIOs expect this to increase in 2021, compared to 52 per cent 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,” said Rowsell-Jones.

Expectations of 2021 IT budget growth

Globally, survey respondents projected a 2 per cent IT budget increase for 2021, on average – slightly down from the 2020 survey (2.8 per cent). Respondents in A/NZ 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 per cent on average.

Technology priorities in 2021

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 first by CIOs globally, but came in second for A/NZ CIOs.

When asked about their enterprise’s plans in relation to a provided list of digital technologies and trends, 91 per cent said they had already deployed digital workplace technologies to support working from home.

A third have already deployed distributed Cloud, and 27 per cent have deployed robotic process automation (RPA) with a further 40 per cent planning to do so within the next two years.

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

CIOs continue to prioritize cybersecurity investments

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

In third place is cloud services and solutions (53 per cent), 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. CIOs must seize this moment because they

New customer expectations

CIOs in A/NZ 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 per cent) reporting that it will increase in 2021.

Ninety percent of A/NZ 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 A/NZ 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 per cent of A/NZ CIOs expect a small or significant increase in their organization’s focus on sustainability, compared with 57 per cent globally.

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




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