CXO Spectrum

IT Spending

Accenture Finds Timid Approach to Technology Costing Enterprises Billions

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A new survey showcases the delta between vision and implementation in digital transformation. Accenture’s recent report, “Your Legend or Your Legacy” found that C-level execs embracing bold technology initiatives are reaping the rewards. Yet the number who do so is surprisingly small – Accenture finds only 10% are investing optimally in technology and adoption decisions to realize full value of those investments. Further, Accenture finds that, “By adopting new technologies more aggressively and breaking down barriers to effectively scale innovation across their organizations, these leading companies are generating more than twice the rate of revenue growth than those on the lower end of the spectrum.”

The study was conducted with 8,300 organizations across 20 industries and 20 countries.

Accenture offers five key factors— or “PATHS” — that it has identified as distinguishing the top 10% of companies from the rest:

  • Progress: The extent to which companies apply new technology to evolve business processes across the enterprise. One example is the use of cloud and artificial intelligence (AI) to increase the effectiveness of multiple business processes rather than working in silos.
  • Adaptation: Ensuring that IT systems can adapt and respond to changing market conditions with actions such as decoupling from legacy systems and using cloud services as a catalyst for innovation.
  • Timing: Creating an appropriate sequence and roadmaps for deploying new technology. This begins with identifying foundational technologies and prioritizing adoption based on their enterprise-wide impact.
  • Human+machine workforce: Using technologies to augment employees and make work more engaging while simultaneously realizing efficiency gains. This could entail delivering technology-augmented training that is personalized and experiential for working with technologies of the future.
  • Strategy: Actively aligning business strategy and IT strategy and weaving technology investments together to better seize opportunities.

IDC Finds IT Spending Could Get Boost from 5G, But Growth May Be Impacted by PC Sales and Coronavirus

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IDC’s Black Books finds that IT spending is on track to increase by 5% in 2020, but that uncertainty around the Coronavirus may impact short-term investments:

“Much of this year’s growth is dependent on a positive smartphone cycle as the year progresses, but this is under threat from disruption caused by the Coronavirus crisis,” said Stephen Minton, program vice president in IDC’s Customer Insights & Analysis group. “Our current forecast is for broadly stable tech spending in 2020, but PC sales will be way down on last year, while server/storage investments will not recover to the levels of growth seen in 2018 when hyperscale service providers were deploying new datacenters at an aggressive pace.” 

Hyperscale service provider IT spending will recover to 9% growth this year, up from just 3% in 2019, but this is short of the pace of two years ago. Cloud infrastructure and digital services providers will also continue to increase their IT budgets in order to meet strong end-user demand for cloud and digital services, which will continue to expand at a double-digit rate of growth as enterprise buyers increasingly shift their IT budgets to the as-a-service model. 

“Much of the explosive growth in service provider spending from 2016 to 2018 was driven by aggressive roll-out of servers and storage capacity, but more spend is now moving to software and other technologies as these providers seek to drive into higher-margin solution markets including AI and IoT,” said Minton. “Nevertheless, after infrastructure spending cooled last year, we expect service provider spending to be broadly stable and positive in the next few years because these firms need to keep driving up capacity in order to deliver services to end-users.”