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Investing in Growth - Enterprise IT Investment Trends 2015

 Newer technologies such as digital will attract more than 25% of the IT budgets, says EY-CIOKLUBSurvey 2015
29% respondents stated that there would be more than 10% increase in their expenditure on IT as compared to last year. 35% stated that they would spend 0-10% more than the previous year
54% of the respondents agree that social media has been really effective in engaging with customers and enhancing collaboration
52% respondents have budgeted for mobility in the current financial year
Of the respondents, 57% agreed that they are reaping the benefits of investments made in cloud-based technologies. Of these, 30% of the respondents are from the infrastructure, real estate and technology sectors
73% of the respondents feel that from a cybersecurity viewpoint, a mix of both preventive and detective solution is required.

Mumbai, 25 April 2015 : Digital growth in India has shown a tremendous spur among organizations, which has significantly impacted the consumer as well as the services market. EY and CIOKlub’sannual Enterprise IT Trends and Investments Survey titled “SMAC 3.0: Digital is Here” covers the journey of the Social, Media, Analytics and Cloud (SMAC) areas that have been the latest buzzwords among IT strategists.

The survey, which was aimed to capture key IT priorities and initiatives taken by organizations across various sectors,provided meaningful insights from the 267 CIO’s that responded. The results clearlyhighlight that the direction of the respondents’ current and future plans aligns with the ‘Digital India’story

Devendra Parulekar – Partner and India Leader, Cybersecurity, EY Advisory, EY says, “Based on the significant enhancements of disruptive technologies, there will be a significant shift for CIOs with respect to managing their internal users and external service providers. CIO’s are implementing self-service technologies to allow business users to get more control over their service needs (thus imparting a Do It Yourself-DIY over the earlier Do It For Me-DIFM attitude).Curiously, in alot many areas, CIO’s themselves are looking to go for managed services,thus leaning towards Do It For Me (DIFM), themselves.”

Of the respondents, 64% have stated that their IT spend will increase as compared to the previous year. Though this is lower than our preceding surveys, it is encouraging that CIOs have proposed to spend more than 25% of their IT budget on innovation — newer technologies such as cloud, mobility and analytics — to achieve their business objectives.

There been a generic trend where smaller organizations will have a larger focus on increasing sales as compared to curtailing costs or improving margins. This focus shifts in favour of margin improvement for larger organizations. As gauged by the survey responses, matured and more established sectors (such as automotive, banking and financial services, manufacturing, power and utilities) believe improving margins to be their top IT driver. In contrast, growing or maturing sectors (such as retail and consumer products, infrastructure, technology, and life sciences) have voted for increasing sales to be their primary IT agenda.

Digital experiences are becoming more contextual and personalized. The customer experiences thatmeet customer needs, feel personally relevant, and deliver in the moment will ensure success ofthe business. Digital transformation combines individual digital technologies, such as social, mobile,real-time 360 degree analytics capabilities and cloud, to deliver integrated business solutions thatempower the business.

The report highlights the journey of the CIO from the predominant SMAC technologies in 2010 (SMAC 1.0), covering the trends observed in the recent past (SMAC 2.0) to the futuristic ones which will define the ever-increasing role of IT in the organization (SMAC 3.0).

Radhakrishna Pillai – Vice President, CIOKlub says“the evolution of analytics is outstanding. From legacy basis reporting, analytics has advanced to entering into the minds of the customer and providing them with a solution to their needs”.

The importance of social media to reach various levels of customer growth is clearly gaining ground, as 54% of the respondents mentioned that social media has been really effective in engaging with customer s and enhancing collaboration. Another 33% respondents stated that they believe that social media will surely accrue benefits for them in the upcoming years.

Mobility is not far behind in the journey.As depicted by the survey results, 52% of the respondents stated that they are considering mobilityas a platform to enhance portability, by capturing data in real time. As compared to last year’s results,there has been a 5% increase in the number of CIOs opting for mobility. The trend is yet to catch on,but is not too far. Of the respondents, 25% mentioned that they may not have budgeted for enterprisemobility in the current financial year, but it is definitely in the pipeline.

Nitin Mehta, Director – IT Advisory Services, EY says,“Increasing sales and market share; and focusing on margins will be the key drivers for IT innovation in FY15-16.”

This can be supported by the fact thatamong all the respondents who have considered data analytics to be important for the organization,56% agree that social media is a major contributor to the success of its implementation. This impliesthat organizations can use the power of social media, integrate an analytics module to it, and providespecific results to users based on their browsing patterns and online profiles.

The survey results show an interesting trend indicating that investment in cloud computing isdelivering a range of benefits, including a shift from capital-intensive to operational cost models, loweroverall cost, greater agility, reduced complexity and better security. 57% respondents have agreed that cloud-based technologies have given significant benefits to organizations.Of these, 30% of the respondents are from the infrastructure, real estate and technology sectors. Further, 57% of the respondents plan to spend anywhere upto 25% on newer technologies, including cloud.

The survey also highlights cybersecurity as a board-level agenda.It is difficult to achieve ROI by investing infurther prevention technologies. However, detection technologies will help organizations detectattacks, respond faster and minimize the damage.The survey results reveal that 73% of the respondents feel that to address cybersecurity risks, investments in a mix of preventive and detective technologies is necessary.

All in all, this year’s survey brings good tidings for the Indian CIO with an optimistic outlook, interesting trends and a view towards the journey to SMAC3.0

About the survey
EY and CIO KLUB’s seventh Enterprise IT Trends and Investment Survey, gauges current investment patterns, IT priorities and upcoming investment plans of organizations. This year’s survey was conducted from 17 February 2015 to 11 March 2015, and saw theparticipation of 278 respondents from various organizations across major industries. Thequestionnaire used in this survey was designed to gather relevant information about IT investments,initiatives, priorities and technologies. The survey was conducted through a secure online tool witha specific URL that was emailed to designated members of the CIO KLUB, along with instructions forcompleting the survey.EY downloaded the results of the survey to conduct an analysis and used cross tabs to identifythe patterns of various IT domains across specific industries, and the size and type of industry.The responses of 267 out of the 278 respondents, who completed the survey, were considered ascomplete and used for the analysis. Partial responses have been ignored for the purpose of thisanalysis.

About EY
EY is a global leader in its Assurance, Tax, Transaction and Advisory services. Our insights and the quality services we deliver help to build trust and confidence in capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In doing so, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization and may also denote one or more of the member firms of EY Global Limited, each of which is a separate legal entity. EY Global Limited, a UK company, which is limited by guarantees, does not provide services to clients. For more information on our organization, please visit ey.com.

This news release has been issued by EYGM Limited, a member firm of the global EY organization. It also does not provide services to clients. EY has offices in Ahmedabad, Bengaluru, Chandigarh, Chennai, Gurgaon, Hyderabad, Kochi, Kolkata, Mumbai, New Delhi, Noida and Pune.

For more information about our organization, please visit www.ey.com

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