Digitization Competing for Limited Technology Spend as Companies Struggle with Operating and Maintenance Costs

Although organizations are trying to shift more of their technology spend toward leveraging technology disruptors to innovate their business models as a means to deliver greater returns, the complexity of digitization and limited technology budgets in many organizations still remain significant barriers to the rate of adoption, according to results of a new Protiviti survey benchmarking technology leaders’ priorities.

As the scope associated with protecting and growing business value becomes more measureable and data-driven, technology leaders are working to optimize limited spend across business with initiatives that will potentially add more value to the enterprise, while they are still tethered to information platforms that consume the majority of budgets (55 percent) for ‘lights on’ operational and maintenance initiatives and are allocating only 13 percent to innovation.

The results of Protiviti’s survey of technology leaders magnify the current state of operations, challenges and competing priorities for technology spend in large to small companies in a wide mix of industries.

Data-Driven Shift

Examples of the data-driven shift revealed by the survey findings include the increased adoption of cloud computing (64 percent are investing in this area), digitization (57 percent), big data (57 percent), and agile projects (44 percent).

Organizations in the financial services (70 percent) and consumer products and retail (67 percent) industries are currently leading the IT innovation charge.

“Business-minded technology leaders across the enterprise, both within and beyond the IT department, have made stunning progress in terms of delivering increased levels of value during the last few years as they have shifted more of their technology spend from legacy maintenance activities towards digitization or digital transformation initiatives,” said Kurt Underwood, a Protiviti managing director and global leader of the firm’s Technology Consulting practice.

“Yet more progress is needed to ensure that data-centric security and privacy matters remain top of mind in the design and operating effectiveness of cybersecurity controls. Many digitization initiatives can quickly create new cybersecurity vulnerabilities. Without the right oversight, capabilities and metrics, management teams and boards are too often getting blindsided by data breaches.”

What’s driving IT transformation efforts?

With a majority of organizations (54 percent) currently undergoing a major IT transformation, survey respondents reported the following drivers of these initiatives:

New functionality (53%)
Cost optimization (43%)
Operational improvement (41%)
Adoption of emerging technology (40%)
Business/IT alignment (38%)

What’s impeding IT transformation efforts?

Conversely, the following roadblocks are causing challenges for companies as they strive to find new ways to navigate a rapidly changing environment:

Legacy infrastructure (43%)
IT culture not agile to change (39%)
IT skills gap (37%)
Legacy processes (36%)
Cost/budget limitations (36%)

Not surprisingly, different industry sectors have different IT funding priorities. For example, financial services companies spend significantly more of their IT budgets on security (23 percent), while health care providers devote a higher portion of their IT budgets to IT operations and maintenance (58 percent).

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