Asia Pacific CIOs splurge on cloud, while their global counterparts prefer spending on BI

The top technology spending priorities of APJ CIOs for 2014 reveal two complementary goals: exploiting new technologies and trends, and renovating the core of IT, finds Gartner Inc.

Cloud was nominated as the top area for new technology spending by CIOs in APJ. Nearly one-third of APJ businesses are enthusiastic adopters of public cloud, indicating significant investments in the drive for greater agility. This places them ahead of their global peers: 31 percent of APJ CIOs say they have invested significantly in cloud compared with 25 percent globally.
Organisations in this region are greater users of public cloud services, especially platform as a service (PaaS) and infrastructure as a service (IaaS), but lower users of software as a service (SaaS) than the global average. Only 56 percent of APJ respondents are using SaaS, whereas this figure is much higher globally (72 percent). This implies that the majority of cloud services are being consumed by the IT function rather than business units directly.

“It’s unsurprising that investment in mobile app development and device management ranks second, given the rapid growth in adoption of mobile-data-enabled smartphones and tablets, the increased popularity of BYOD, and the explosion in the number of devices capable of participating in the Internet of Things,” said Gartner vice president Andy Rowsell-Jones. “This is followed by business analytics in third place, as enterprises in this region seek to better understand and manage the drivers of business performance.”

The second area of significant investment for APJ IT leaders is renovating the core of IT - in other words, ensuring that the infrastructure, as well as the main IT applications and services, such as data center, ERP and networks, are fit for purpose to ensure that the core is digital-ready.

Towards strategic sourcing

IT leaders across APJ have long embraced strategic sourcing, mixing in-house with sourcing from offshore captive units, contractors and fully fledged outsourcers. The survey data bears this out, showing APJ to be slightly above of the global average when it comes to mixed or outsourced arrangements.

Only 19 percent of CIOs in APJ reported having wholly or mainly insourced IT arrangements, compared with 27 percent globally. A mixed model was used by 66 percent of APJ respondents (63 percent globally) and 14 percent were wholly or mainly outsourced, compared with a global average of 10 percent.

This is only the beginning, however. IT leaders across APJ intend to embrace strategic sourcing even more wholeheartedly, with 77 percent expecting to change their sourcing arrangements in the next three years.

Building bimodal capability

To address the age-old tension between needing to provide slow and steady IT (for critical systems), while responding “at the speed of digital” (for innovative, differentiating opportunities), digital-savvy IT leaders are managing their IT organisations in two modes: traditional and nonlinear.

APJ is slightly in front with the adoption of this model, with 48 percent of respondents saying they operate some form of bimodal IT, in contrast with the global average of 45 percent.

“If you are not already bimodal, consider experimenting with separating conventional and “nonlinear” IT work streams, with conventional looking after more traditional waterfall development projects, and nonlinear looking after more short-term, agile and lean startup opportunities,” said Rowsell-Jones.