$133 billion and counting: Why Australia’s IT spend is about to boom

Innovation

New research from the Gartner Symposium on the Gold Coast reveals that CIOs need bigger budgets to fund cybersecurity and modernise apps.
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Generative AI may be 2023’s hottest topic, but it is cybersecurity, cloud platforms, data analytics and application modernisation that CIOs want more funds for. New Gartner research projects spending in those IT areas will expand 7.8% in 2024.

Gartner Analyst Andy Rowsell-Jones says the focus for Aussie CIOs is optimising infrastructure and streamlining operational costs. Generative AI is an area of interest for organisations, but funds are being allocated to cybersecurity and cloud platforms which are deemed more essential.

Rowsell-Jones doesn’t expect that to change in the near or long term. “Generative AI will primarily be incorporated into enterprises through existing spending in the long-term – software, hardware and services they are already using,” says Rowsell-Jones.

In a conversation with Forbes Australia, the Gartner analyst says that companies should be mindful of the macro-economic conditions in which they are now operating. He suggests that enterprises look at the nimble way that startups spend budgets, to put funds to best use.

“Large company business directors can learn an awful lot from the frugal startups,” says Rowsell-Jones. “The startups are good at managing uncertainty. They deal with limited resources, and they have to be light on their feet. “

Australian IT Spending Forecast (Gartner)

The Gartner analyst points to the lean-startup model to manage costs. “Try the minimal viable product, if it works, spend more money on the next iteration. If it doesn’t work, try something else and pivot.”

Gartner projects that inflation in Australia will decline to 3.25% in the coming year. Roswell-Jones warns that even with lower levels of inflation, it is imperative for CIOs to spend IT budgets wisely. “Capital isn’t free in the current economic environment,” says Roswell-Jones. “Be much more restrictive and careful about how you are spending your capital.”

Rowsell also suggests that organisations integrate IT talent into other business units and utilize emerging technology within company divisions to create efficiency.

“Generative AI tools are reducing the barriers to entry for software development, which means more digital capabilities are now lying outside the core IT organisation,” said Rowsell-Jones. “Australian CIOs should harness this capability and provide the guardrails to support and facilitate business technologists in the wider organisation.”

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