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Investing in Growth - Enterprise IT Investment Trends 2016


Embracing a start-up attitude can help CIOs execute their digitization strategies, says EY-CIO Klub survey

Key Highlights

50% of the CIOs are open to working with start-ups while the other half is still sceptical as per the
Survey
81% of the CIOs think IoT is the most imminent technology. Other trending technologies are High
Speed data transfer, wearable technologies and 3D printing
Cyber threat tops the list of key issues that give a CIO sleepless nights
While half the companies have in-house analytics functions, the other half believe that there is
greater value in engaging with outside, specialized talent.

New Delhi, April 30, 2016: : The growth of digitisation in the corporate world is tremendous, with
organisations heavily relying on upcoming technologies to reduce their operating costs. The annual EY-CIO
Klub’s Enterprise IT Trends and Investment Survey titled ‘The startup gene: a way forward’, brings the
spotlight to the changing attitudes of technology officers and organisations as a whole in the new digitally
charged business eco-system. The report, which revolves around the idea of the startup gene, states that the
CIOs of the country can benefit from partnerships with start-ups and by imbibing the attitude of start-up
entrepreneurs..

The survey, which is designed to capture key IT priorities and initiatives taken by organizations across various sectors, provided some meaningful insights in to the changing outlook of the Chief Information Officers. About a half of the 294 CIOs have shown faith in implementing start-up practices to get their work done. This was supplemented by the fact that 30% of the respondents were aligned towards the Do It For Me (DIFM) approach, wherein the company would want to bring in external expertise to perform certain specific tasks, rather than doing it in-house.

Partnering with start-ups ensures that work is done in an agile and innovative manner. This can save cost, help adopt the latest in technology and become a disruptive force in the industry. However, the report claims that to be more effective, CIOs should promote these values in their own firms. The only way to adapt to change is to take the risk of adopting it. By implementing start-up practices, CIOs can ensure that their projects are driven to closure quickly, operational expenditure (OPEX) is governed well and the product is effectively managed by the company after using a combinative approach.

“CIOs have seldom been challenged for implementing an established Enterprise Resource Planning (ERP), but they have almost always been questioned when they recommend engaging with start-ups to acquire specialized expertise. However, this is rapidly changing. We are now seeing CIOs being questioned by their executive leadership when they do not leverage the start-up ecosystem for enhancing product capability, reducing cost, and furthering competitive advantage.”, says Nitin Bhatt, National Leader, Risk Advisory Practice, EY India.

Certain aspects of the IT roadmap are becoming clearer. For example, 81% of the respondents state that the most promising futuristic technology that will gain momentum in the next five years would be Internet-of- Things (IoT). While IoT is still considered to be a technology of the future, the market is already swarming with companies offering products fuelled by the IoT ecosystem. However, technology comes with its own associated risks. Cyber security continues to be important and remains a board-level agenda for a second year in a row. More than one-fourth of the respondents stated that cyber threat is the “one” issue that gives CIOs sleepless nights.

The 2015 survey showed that organizations had crossed the SMAC 2.0 barrier and were rapidly moving toward SMAC 3.0 (where digital triumphs with innovation); however, the priorities have shifted since the last year. The 2016 survey reveals that companies have increased focus on mobility as compared to social, resulting in a change of priority from S-M-A-C to M-A-C-S. Companies are embracing new technologies at a faster pace than expected. Trends show that companies are ready to spend up to 30% of their total IT budget on SMAC technologies. While each of these technologies is a giant in itself, CIOs in India are prioritizing these implementations in their organizations based on their organizations’ strategic objectives.

About the survey
EY and CIOKLUB’s Enterprise IT Trends and Investment Survey gauges current investment patterns, IT priorities and upcoming investment plans of organizations. This survey was conducted through a secure online tool with a specific URL that was mailed to designated members of the CIOKLUB, along with instructions for completing the survey. Key themes from the discussions have been considered for the report. EY downloaded the results of the survey to conduct an analysis and used cross tabs to identify the patterns of various IT domains across specific industries, and the size and type of industry. Responses of 294 out of 318 respondents, who completed the survey, were considered as complete and used for the analysis. Partial responses have been ignored for the purpose of this analysis.

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we
deliver help build trust and confidence in the 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 so doing, 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 refer to one or more, of the member firms of Ernst & Young
Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited
by guarantee, does not provide services to clients. For more information about our organization, please visit
ey.com.

This news release has been issued by EYGM Limited, a member of the global EY organization that also does
not provide any services to clients.

Enterprise IT Investment Trends 2016

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