Indian CIOs To Increase Their Budgets Up to 20%: Study

Mumbai, 25 April: The EY-CIOKlub’s annual enterprise IT trends and investment survey titled ‘Focusing on the Fundamentals’, shows increasing confidence of CIOs in enterprise IT tools and disruptive technologies that are shaping products, processes and organizations today. Evolving digital technologies – including social media, enterprise mobility, data analytics and cloud, commonly known as SMAC — are rapidly emerging as disruptive forces for organizations across all industries.

However, as per the survey results, there is a marked difference in adoption levels for each one. Cloud computing and IT consolidation are seen as the forerunners in this race with nearly 56% of respondents indicating it as their number 1 priority for the upcoming year; Business intelligence, analytics and big data come second at 34%; enterprise mobility is at 25%; and social media is at 9%.

Majority of CIOs are focusing on the fundamentals of SMAC, ascertaining that they get them right before they move on to more futuristic technologies.

The survey results also indicate that respondents have voted business expansion, emerging technologies and internal organizational/process change as the leading influencing factors for IT this year. What this means is, in general, there is a positive sentiment in the market and as is typically the case, sentiment drives behaviour. This is clearly seen in the case where majority of the survey respondents have indicated that an increase in the IT spends is on the horizon.

Samiron Ghoshal, Partner & Leader – IT advisory services, EY says, “The winds of change” are blowing in 2014 with CIOs being optimistic and looking at making significant investments for the development of IT and new solutions to achieve business expansion and customer satisfaction.”

An interesting outlier, which typically gains considerable interest, is information security with a share of 18% respondent votes for top priority in FY14–15. Security has consistently taken CIOs’ mindshare as one of the key priorities for the last six years. The above statistics lends us to believe that the true acronym, in line with the adoption scale, should be CAMSS – (cloud, analytics, enterprise mobility, social media and security).

Devendra Parulekar, Partner – IT risk and assurance, EY says, “Given CAMSS’ influence on the future prospects of the CIO’s role, CIOs will need to enhance their executive skills, have better business connects to be ready to transform the business using the technological advances that will come with these winds of change.”

The survey indicates that more than 45% of the respondents feel that security and privacy concerns outweigh their focus on cloud. This is evident from the survey results where 23% respondents shy away from cloud due to their lack of understanding on cloud architecture and deployment models and 25% are deterred due to lack of a global information security standard for cloud service providers. In such an environment, it was not surprising that while big data was attracting significant attention from the CIOs, there was a clear reluctance in adopting big data technologies (only 11% of the respondents indicated big data investments). In sharp contrast, 42% respondents have indicated focus on adopting embedded BI techniques and 30% on adopting advanced analytics (predictive and statistical).

As per the survey, it is believed that CIOs need to build a strong strategy around the implementation and roll out of enterprise mobility technology. 25% of the respondents have marked enterprise mobility as their number one IT transformation priority for 2014–15. Amongst these, 50% of the organizations have revenue in excess of INR10 billion and have indicated an increase in the IT budget for the year.

On the other hand, majority of respondents (47%) have said that they are either considering or will consider using this technology for management reporting and performance measurement in the near future. As seen in the IT transformation agenda, social media is getting a place on the CIO agenda, but yet to gain importance in the CAMSS digital technologies. Only 9% of respondents have chosen it as their top priority for the year. However, as seen in survey results, approximately 30% of the respondents plan to introduce and approximately 15% respondents are evaluating introduction of social media platform in their organizations during the next year.

Shirish Gariba, President, CIO KLUB, adds “Organizations are focusing on business expansion through consolidation and innovation, resulting in organizational and process change with a keen eye on understanding the regulations that impact their business. As opposed to treating each regulation as a special project, organizations today are working out how they can manage and control compliance issues within each market as part of a “business as usual” model to in order to keep the costs down.”

The survey highlights compliance with regulatory requirements, cost savings and risk mitigation amongst the lowest three priorities for the CIOs. However, this varies slightly from industry to industry. The survey indicates that enhanced customer experience and compliance with regulatory requirements is marginally more important for banking and financial services and technology sectors, while infrastructure, industrial and consumer products sectors are leaning toward internal process efficiencies and agility. In technology, media and telecommunications 33% of the CIOs surveyed, voted for enhanced customer experience, 26% for internal process efficiency and agility and 22% elected innovation to drive competitive advantage. Whereas, in financial services sector a majority, 29% voted for innovation to drive competitive advantage, 25% for risk mitigation and 21% believe in enhanced customer experience. CIOs of infrastructure, industrial and consumer products industry valued internal process efficiency and agility as top priority with 26% votes, while 19% selected enhanced customer experience and another 26% voted for innovation to drive competitive advantage.

The survey also observes interesting trends in the IT risk universe of organizations whereby majority of organizations (65%) have chosen continuous availability of critical IT resources as one of the two top risks. Only 39% of respondents think that macroeconomic uncertainties will impact their IT investments and priorities, whereas 72% of respondents believe business expansion will drive IT investments.

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