Role of IT is increasingly seen as supporting business
LOB business spending on IT expected to swell to 45% in 3yrs
ACCORDING to a new study by CA Technologies, chief information officers (CIOs) in Asia Pacific lead the world in viewing IT as ‘very strategically important’ or ‘fundamental’ to the business.
In its TechInsights Report: The Changing Role of IT and What to Do About It, 89% of CIOs in Asia Pacific said that IT is very strategically important or fundamental to the business compared with 78% in Europe and 51% in the United States, CA Technologies said in a statement.
Vanson Bourne conducted the CA Technologies-sponsored study of 1,300 senior IT leaders in six Asia Pacific countries (Australia, China, India, Japan, Singapore and South Korea) and 15 other countries around the world in May through July 2013.
The study’s respondents assume IT executive, management, project lead or enterprise architect positions at enterprises with revenues of US$100 million or more.
The study confirms what many in the industry have suspected: As the role of IT is increasingly seen as supporting business, IT spend is growing within other lines of business, CA Technologies said.
More than one-third (36%) of IT spend is now happening outside of the IT department in Asia Pacific organisations.
This clearly demonstrates the transformation of technology from a centrally-managed IT responsibility to corporate-wide business enabler and redefines how technology is purchased, deployed and used, CA Technologies said.
And, within three years, the amount of IT spending controlled by lines of business is expected to swell to 45%, the company added.
The consequences for IT leaders are enormous. They must now become senior advisors who not only manage but also influence and strategically guide a corporation’s IT investments.
As business transformation driven by software becomes the norm and businesses use new applications to engage their employees and customers, the role of IT in Asia Pacific organisations will start to shift more rapidly towards enabling and accelerating this trend, CA Technologies said.
“Software and technology are transforming organisations in Asia Pacific …, creating new businesses from the ground up and even revolutionising industries,” said Kenneth Arredondo (pic), president and general manager, Asia Pacific & Japan, CA Technologies.
“Customers are demanding new applications and experiences and they want them now. Employees require new tools to stay one step ahead of the competition.
“As a result, we are seeing a seismic shift in the way technology is seen, purchased, used and deployed across enterprises in the region.
“IT departments must evolve from single-source providers to business consultants, brokers and advisors, or risk becoming marginalised in the software and technology-driven economy,” he added.
This shift is expected to continue with 81% of respondents in Asia Pacific anticipating further changes in the role of IT in their organisation over the next five years, compared to just 42% in the United States.
With the growing appreciation of IT’s contribution towards business success and the availability of leading edge management and security enterprise solutions, the distribution of IT budget in Asia Pacific organisations will change accordingly.
Respondents in the region are currently spending half of their IT budget (50%) on maintenance, or ‘keeping the lights on’ activities. However, this figure is expected to shift in favour of innovation within three years, which will increase to 60% of their budget while maintenance falls to 40%.
The change of IT’s role to become an enabler of business is in some respect still at the nascent state in the region, pointing to further opportunities for growth and transformation, CA Technologies said.
The study reveals that activities such as developing new, innovative products/ services (13%) and driving new business initiatives (21%) are not top of mind with most IT departments in Asia Pacific
Instead, traditional IT duties top the list – ensuring the organisation’s critical data is secure (45%), providing technology support to employees (38%), and maintaining infrastructure and applications (36%).
Other key findings in Asia Pacific include:
74% of respondents in Asia Pacific say the top IT executive in their organisation reports to the CEO (chief executive officer), underscoring the importance of IT to the lines of business (LOBs). In China, this figure is at 99%, which is the highest in the world.
The relationship of IT and LOBs is changing in Asia Pacific: 44% say IT acts as a service broker or consultant to the LOBs rather than as an exclusive supplier, and LOBs’ contribution to IT spending is expected to increase.
IT leaders need to better align with the business and educate management to leverage disruptive technologies:
Cloud computing (53%), mobility (36%), and business intelligence/ analytics (33%) are seen by Asia Pacific respondents as the top three biggest trends impacting IT at present.
52% say IT needs to provide more training on these new technologies, and 44% say IT needs to align closer with the business to understand these key priorities.
For more information on the research and to download the whitepaper, go here.
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