Lines of Business Spending on Information Technology Expected to Swell to 45 Percent in 3 Years

More than one-third (36 percent) of IT spend is now happening outside of the IT department in APJ organizations, according to a new study by CA Technologies. 

“The Changing Role of IT and What to Do About It” TechInsights report confirms what many in the industry have suspected:  as the role of IT is increasingly seen as supporting business, the IT spend is growing within other lines of business.

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.

And, within three years, the amount of IT spending controlled by lines of business is expected to swell to 45 percent.

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 APJ organizations will start to shift more rapidly towards enabling and accelerating this trend.

Commenting on the findings, Willie Hung, Vice President, Hong Kong & Taiwan, CA Technologies said: “Software and technology are transforming organizations in Asia Pacific and Japan, creating new businesses from the ground up and even revolutionizing industries.”

“Businesses in Hong Kong are finally gravitating towards a convergence of big data, cloud computing and mobility.”

This shift is expected to continue with 81 percent of respondents in APJ anticipating further changes in the role of IT in their organization over the next five years, compared to just 42 percent 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 APJ organizations will change accordingly.

Respondents in the region are currently spending 50 percent of their IT budget on maintenance. However, this figure is expected to shift in favor of innovation within three years, which will increase to 60 percent of their budget while maintenance falls to 40 percent.

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.

The study reveals that activities such as developing new, innovative products/services (13 percent) and driving new business initiatives (21 percent) are not top of mind with most IT departments in APJ.

Instead, traditional IT duties top the list—ensuring the organization’s critical data is secure (45 percent), providing technology support to employees (38 percent), and maintaining infrastructure and applications (36 percent).

The study also reveals that 74 percent of respondents in APJ say the top IT executive in their organization reports to the CEO, underscoring the importance of IT to the lines of business (LOBs). In China, this figure is at 99 percent, which is the highest in the world.

Forty-four percent 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.

Cloud computing (53 percent), mobility (36 percent), and business intelligence/analytics (33 percent) are seen by APJ respondents as the top three biggest trends impacting IT at present.

A little more than half (52 percent) say IT needs to provide more training on these new technologies, and 44 percent say IT needs to align closer with the business to understand these key priorities.

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