Don't put innovation on hold: IDC

CIOs say innovation is a top business priority this year, but acting on their plans will be crucial as they face increasing pressure to innovate while keeping day-to-day IT operations running smoothly, according to researcher, IDC.

IDC analyst Raj Mudaliar said due to such a competitive market, CIOs and enterprises cannot afford to put innovation on hold and it now needs to be part of their IT strategies.

“Enterprises don’t have the time and luxury to have a three-year plan or a five-year plan because competition is going to be extremely aggressive. The ones who are able to leverage this whole new emerging [digital] environment successfully are the ones who are going to be leading the market place,” he said.

“If the CIO is not able to demonstrate that thought leadership, then sooner or later he or she is not going to be there."

Consequently, the CIO is compelled to become more innovative as it is a way for enterprises to stay competitive in the market, said Mudaliar.

Mudaliar said outsourcing is going to continue to grow as CIOs look to not only improve operational efficiencies but to free up more of their time so they can focus more on innovation.

“More and more outsourcing is bound to happen and that’s a way the CIO can continue to focus on what is more of strategic importance for the organisation from an innovation perspective,” he said.

“The outsourcing sector, especially in the Australian market, has grown in leaps and bounds and it continues to be the highest growing market in Australia. So whether it is applications, networks or infrastructure services, a large component of those are being outsourced to IT services companies."

Research firm Gartner also found that most CIOs wanted to focus on innovation. However, according to Gartner’s global CIO survey of 2053 CIOs, 303 which are in the Asia-Pacific region, about half do not see IT’s enterprise role changing over the next three years because most CIOs are still only focusing on "keeping the lights on."

IT investments

More than one-third (39 per cent) of respondents to IDC's 2012 Continuum Study, said their IT investments would increase over the next 12 months, with the top three areas being:

• Mobility to drive business outcomes
• Virtualization and automation to build better scale and agility
• Unified communications to enhance productivity.

IDC expects investment in IT services in Australia to grow from $15.2 billion in 2012 to $17.7 billion by 2016.

“Yes, there is a slow-down which has been triggered by the mining sector and that will begin to have an impact on the economy in the next two years. But having said that, 2.9 per cent growth for 2013 and 2014 is pretty healthy in comparison to the economy from a global perspective,” Mudaliar said.

“From an Australian economy perspective, we are increasingly moving towards becoming a services dominated economy. Innovation is going to go hand in hand with customer-centricity so the outcome is to be able to deliver better services for their customers to retain them and continually grow them.

“From that perspective, I think we are seeing that trend where there are no cuts on IT.”

However, Gartner recently projected in its global CIO survey that IT budgets are to be slightly down this year, with a weighted global average decline of 0.5 per cent.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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