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85% of Australian tech leaders say digital transformation demand outstrips IT budget growth
Tue, 19th Oct 2021
FYI, this story is more than a year old


Australian IT departments are under huge strain to deliver on an unsustainable backlog of digital transformation projects, according to new research conducted by The Economist Intelligence Unit and sponsored by Appian.

85% of tech leaders report that growth in business project requests dwarfs IT budget growth. This is significantly higher than the global response of 64%, showing that the discrepancy between budget and demand is much more pronounced in Australia than in the rest of the world.

The research surveyed more than 1,000 IT decision-makers and senior business executives at major corporations around the globe. The data shows a backlog of three months to a year for Australian technology projects (consistent with the global average). However, Australian business units are taking more aggressive responsive action than business units around the world.

Australian executives agree that non-IT business units take the lead in procuring or developing most of the applications that they use. Agreement among executives in Australian organisations is stronger than the global average (63% of Australian respondents agree, compared with the global average of 55%). The sentiment is strongest among Australian IT decision-makers, three quarters (76%) of whom agree.

Four in five business leaders believe that their organisation needs to improve its IT infrastructure and applications in order to better adapt to external change. The data shows that most Australian executives (89%) believe that their organisation encountered operational difficulties in addressing the challenges posed by the pandemic, with 41% describing these as significant.

“Prior to the pandemic, IT teams in Australia were already under enormous pressure and struggling to keep up with the software application demands of businesses,” says Appian regional vice president for APAC Luke Thomas.

“With the additional pressures of COVID-19, which made employees, business data, and IT systems more dispersed than ever before, it's no surprise that four in five Australian business leaders believe their organisation needs to improve IT infrastructure and applications in order to better adapt to external change.”

IT is losing control

The trend towards non-IT-led application development is evident at BUPA ANZ, whose CIO, Sami Yalavac, was interviewed as part of the research. BUPA puts together teams that focus on core services for each part of the business and take responsibility for the technology that delivers those services rather than rely on IT.

“You simply can't be agile if you have this traditional model of people in the business setting requirements and people in IT trying to fulfil those requirements without really understanding the reason for them or what the end goal is,” Yalavac said in the report.

“What you get then is IT working hard, only for people in the business to turn around and say, ‘That's not what we meant', or ‘It doesn't work the way we thought it would'. These conversations can go backwards and forwards for months, and all the time, customers are still waiting, and employees can't get work done effectively.”

The importance of collaboration, and the data problem

More than three-quarters (77%) of Australian business leaders regard their IT colleagues as highly effective in collaborating on new product development, a sentiment reflected by 66% of IT decision-makers.

Data accessibility, however, is a major hurdle for Australian businesses trying to bring new transformational solutions to the market. 71% of Australian business leaders report they have had to cancel a digital business project due to a lack of the right data. This is much higher than the global average of 54%.

“The research did highlight that Australia's geographical distance from other markets gave its businesses a head start when it came to connecting distributed workforces amid the pandemic,” says Thomas.

“However, if enterprise data remains locked in siloed systems, better solutions for the distributed organisation will be difficult to deliver.

“If IT decision-makers in Australia are going to have a chance of meeting businesses' ever-growing appetite for digital applications in the future, they will have to embrace new approaches to development that overcome the data problem.