IT Open Season, but Nobody's Hunting

It will come as no surprise, given that the IT sector is one of my key specialities as an Executive Search Consultant, that I have a keen interest in the way in which big corporates are strategising their future IT plans. Whilst the global market is a fascinating beast per se however, I am always most intrigued in playing spot the difference between the Northern Hemisphere and my current home of New Zealand. The Kiwi ecology is full of innovators, but I often wonder if those leading the charge towards tomorrow could learn a thing or two from the rest of the international community. Personally, I think we are only half way up the learning curve.


The world seems poised to forge a bigger and better digital world in 2018 with spending ‘Projected to total $3.7 trillion’[1] by the end of the year, according to Gartner analysts. This push may seem down in a relative way from the pre-GFC glory days where ‘Around 75 cents of each dollar’[2] was pumped into driving IT business value, but I still think that figures like this have an overwhelming tell in terms of how Europe, America and Asia are really cottoning on to the benefits of incorporating the next generation of IT systems into their playbooks.


With this in mind, it seems to me that New Zealand is somewhat lagging in terms of its budgets for IT; indeed, a Managing Partner from one of the Big Four consultancy companies kindly took the time to speak with me and relayed that the normal spend for an IT budget Down Under is ‘Underfunded’ at around 1% of revenue spend compared to a suggested optimum of 5%. The fall behind seems even more drastic considering that a ZDNet survey revealed last year that ‘Over half’[3] of participants in the wider world reported that ‘Their organization would dedicate more to IT’ in 2018 than ever before with around 39% of the overall respondents stating that their budget would increase by 1-10%. With this being the case, does it seem like a case of open season, but nobody’s hunting for New Zealand?


It’s axiomatic that the strategic use of IT will be a determiner in separating top competitors from those that can’t keep up in the future; this then begs the question as to why companies, worrying about tending the fruits of their labour, aren’t even bothering to water their plants. I would offer that a lot of New Zealand companies are concerned with what would happen if there was a repeat of 10 years ago and are thus engaged in fireproofing against recession. It makes sense that New Zealand firms which seemed to suffer a lesser downturn than their global counterparts are anxious about not being diligent enough to avoid such a fate, but such a painful level of apprehension seems to me to be to their detriment: costs might be greatly reduced, but it seems like a lot are running a starving ship. As an extreme example of this, I even know of some businesses which still run on pen and paper systems for contractors which is a needless anachronism in today’s day and age.


The issue with this idea of ‘Underfund[ing]’ however, is that it is not easily fixed by simply throwing money at the problem. A lot of the issue is that of mindset. I’ve spoken to a plethora of executive teams and board members about how I can help in terms of their individual IT goals, but they have struggled with knowing what they want. In one case, I was asked about creating a search for a new CDO, but the reasoning behind this was simply that a competitor had recently done the same without any forethought towards what a CDO might bring in terms of value. Where would this have gotten them? A whole lot of cost which I was ethically not happy to bill them for, knowing that they would not get a valuable return on their investment. Thankfully, I sat down one to one with the company over a number of months and helped advise them on their best choices in terms of IT investment.


What’s the short hand big picture for New Zealand companies when it comes to IT futures then? Businesses need to put more resources into underperforming IT systems; they need to change their overly cautious mindsets to do this; they need to have knowledgeable executives and boards that are willing to make this change to get this ball rolling. It’s not all doom and gloom though! As I say all the time, New Zealand is full of bright minds and with a little bit more knowledge, individuals and companies will really go some way in shaping the world of tomorrow. All it’s going to take is a willingness to learn and adapt from the lessons that are already there. It’s not too late for stagnant companies Down Under, but now is the time to get up and go.


Citations:


[1] No author, Gartner Says Global IT Spending to Grow 6.2 Percent in 2018, (Stamford: Gartner, 2018). [2] Susan Cramm, Smaller IT Budget? Pursue Value-Driven Development, Harvard Business Review, (Boston: Harvard Business Publishing 2008). [3]Amy Talbott, Infographic: 2018 IT Budgets Are Up Slightly…, (San Francisco: CBS Interactive, 2017).

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