Australian organisations have shown a willingness to invest in new technologies. However, this appetite is being tempered by a greater sense of responsibility and strategic alignment, given the current economic climate.
A year after its nearly $5 billion acquisition by IBM, Apptio shared with TechRepublic its observations on the priorities of Australian businesses. Factors such as accountability, risk management, and workforce challenges influence how companies invest their limited resources.
The sophistication of the Australian market
Apptio recognises the growing sophistication in the way Australian businesses understand and manage their technology costs. They are willing to pay for IT services, but then seek to hold those involved accountable for the results.
Pete Wilson, VP of Apptio Business and GM of APAC at Apptio, said there was “a powerful understanding among Australian businesses that technology is not just free.”
He added: “Someone has to pay for it, and if there is a commitment to say, ‘I’m going to increase revenue by X percent and I need some additional investments that result in additional costs,’ then the trend we’re seeing is that there’s a much more mature conversation here about not just adopting technology on a whim, but doing so with a clear demonstration of value to the business.”
Economic pressure as a catalyst
With the cost of capital and funding rising, businesses and CIOs in particular are under increasing pressure to justify IT expenditure. Added to this is another critical issue facing Australian businesses: a shortage of skilled talent, particularly in emerging areas such as artificial intelligence and data science.
“You often hear this: Even if we have the money, we can’t always find the talent,” said Ajay Patel, general manager of Apptio and IBM IT Automation. “There is an increasing focus on how to leverage available skills and talent and allocate them to the most strategic projects with the highest return on investment.”
This talent shortage is not just a local problem, but a global one. The Australian market is feeling the impact keenly, as businesses struggle to balance the cost of hiring with the need to drive strategic projects.
“Specific skills, such as AI expertise, are in high demand, and companies are finding it difficult to bring together domain experts who understand data with data scientists who can make the necessary technology changes,” Patel said.
FinOps: A Growing Discipline in Australia
Apptio has seen significant growth in the Australian market in the adoption of FinOps and cloud optimization practices.
“The APAC region, and Australia in particular, has shown strong interest in rigorous cloud management and optimization,” Wilson said. “This trend has gained momentum over the past 12 months.”
In the FinOps line of business, it's not just about managing cloud costs, he added. It's also about applying the same principles of financial responsibility to other areas of IT. But talent availability remains a concern.
“We are seeing a significant shift in FinOps adoption as businesses want to bring these disciplines into traditional on-premise environments as well,” Wilson added. “The market for talented FinOps professionals is extremely limited at the moment, especially at the top end of the city where large organisations are really starting to adopt these practices.”
The role of cybersecurity in IT spending
Cybersecurity has become a priority for Australian businesses, driven in part by the government's active push for a more robust cybersecurity agenda.
“More funding is being allocated to cybersecurity and this trend is likely to continue,” Wilson said. “When it comes to prioritization, cybersecurity investments remain difficult to beat. Boards are now much more aware of the potential consequences of a breach, which include not only reputational damage but also regulatory fines and legal proceedings.”
In Australia, this is also resulting in organisations being forced to allocate a significant portion of their IT budgets to ensuring compliance with new regulations. According to Wilson, “Cybersecurity is taking up an increasing share of budgets and will continue to do so until we catch up with these changing regulations and trends.”
Justifying IT spending in an uncertain economy
Overall, the current economic climate is characterized by uncertainty, and this makes it more difficult for CIOs and other IT leaders to justify their technology spending.
“The outlook is uncertain and the bar to justify a business case or make a change is quite high,” said Patel. “CIOs are under pressure to prove that their existing IT operations are optimized before they can secure additional funding. This is a significant shift from the past, when technology spending was often considered a given.”
In addition to optimizing their current operations, CIOs are now expected to demonstrate how new investments will deliver tangible business value.
“CIOs are now under a lot more pressure to justify what they are going to return to the business in terms of value for that additional investment,” Patel added. “This is especially relevant in a context where the economic climate remains tough.”
