CIOs in Asia Pacific and Japan view IT as strategically important to the business

CIOs in Asia Pacific and Japan (APJ) lead the world in viewing IT as “very strategically important” or “fundamental” to the business*, according to a new study by CA Technologies. 

The study, TechInsights Report: The Changing Role of IT and What to Do About It, also 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. 

Source: CA Technologies.

More than one-third (36%) of IT spend is now happening outside of the IT department in APJ organisations. 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. The amount of IT spending controlled by lines of business is expected to swell to 45% within three years.

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, CA Technologies notes.

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

Commenting on the findings, Kenneth Arredondo, President & General Manager, Asia Pacific & Japan, CA Technologies said: “Customers are demanding new applications and experiences and they want them now. Employees require new tools to stay one step ahead of the competition. As a result, we are seeing a seismic shift in the way technology is seen, purchased, used and deployed across enterprises in the region. IT departments must evolve from single-source providers to business consultants, brokers and advisors, or risk becoming marginalised in the software and technology-driven economy.”

This shift is expected to evolve with 81% of respondents in APJ anticipating further changes in the role of IT in their organisation over the next five years, compared to just 42% 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 organisations is likely to change accordingly.

Respondents in the region are currently spending half of their IT budget on maintenance, or activities to do with “keeping the lights on”. However, this figure is expected to shift within three years, such that innovation is 60% of the budget and maintenance falls to 40%.

The change of IT’s role to become an enabler of business is still at the nascent stage in the region, pointing to further opportunities for growth and transformation. The study reveals that activities such as developing new, innovative products/services (13%) and driving new business initiatives (21%) are not top of mind with most IT departments in APJ. Instead, traditional IT duties top the list—ensuring the organisation’s critical data is secure (45%), providing technology support to employees (38%), and maintaining infrastructure and applications (36%).

Other key findings in APJ include:
 

• 74% of respondents in APJ say the top IT executive in their organisation reports to the CEO, underscoring the importance of IT to the lines of business (LOBs). In China, this figure is 99%, the highest in the world.
• The relationship of IT and LOBs is changing in APJ: 44% 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.
• IT leaders need to better align with the business and educate management to leverage disruptive technologies. Cloud computing (53%), mobility (36%), and business intelligence/analytics (33%) are seen by APJ respondents as the top three biggest trends impacting IT at present.
  52% add that IT needs to provide more training on these new technologies, while 44% said IT needs to align closer with the business to understand these key priorities.

Download the white paper here.

Survey Methodology 
Vanson Bourne conducted the CA Technologies-sponsored study of 1,300 senior IT leaders in six Asia-Pacific countries (Australia, China, India, Japan, Singapore and South Korea) and 15 other countries around the world in May through July 2013. The study’s respondents assume IT executive, management, project lead or enterprise architect positions at enterprises with revenues of US$100 million or more.


*89% of CIOs in APJ said that IT is very strategically important or fundamental to the business compared to 78% in Europe and 51% in the US.