‘This is the time to be bold’

Tarun Kumar Kalra, Vice President for Asia-Pacific, Apptio (an IBM company) on what the CIO sector can expect from 2024.

Apprehension underscored CIOs’ decision-making throughout 2023 amid promises of a recession that didn’t happen. It sent enterprises into a cost containment spiral in APAC’s mature markets, while emerging regions gave greater attention to cementing their cloud strategies – building on the lessons learned from the more ‘early adopter’ economies in the region.

The year of caution is now behind us and 2024 will be the year in which IT spend reinstates itself, despite expectations for shaky market conditions, particularly in the second half of the year.

Analyst firms have been vocal about increasing IT investment. In one example, Forrester forecasts technology spend across APAC to increase by somewhere between 6.8 to 7.3 per cent each year from 2024 to 2027.

That means many CIOs stand to see previously stagnant budgets increase, while those with flat budgets will ingeniously carve out funds to support expansion and transformation efforts. Identifying, isolating and eliminating spend inefficiencies will be key to the success of these initiatives that will eventually drive greater dollar spend accountability at each business unit and function level.

Where will the money go? It’s no surprise cybersecurity and Artificial Intelligence will remain the talk of the town as enterprises double down on protecting their assets and customers and mapping realistic use cases on the back of the Generative AI hype cycle.

But a priority that will garner significant momentum – one talked about far less – is unit economics; the need to build accountability around cost of doing business will see CIOs, increasingly in partnership with CFOs and boards, accelerate IT cost optimization and alignment strategies. There are two reasons for this: rapidly rising cloud costs which often come with substantial waste, and the critical need to build a full view of all technology spend, whether on-premises or in the cloud.

This is possible through a concerted effort to create a centralized view of the technology spend across the enterprise, providing visibility over inefficiencies and creating an avenue for realignment and funding new initiatives. We will see budget allocations for ‘run the enterprise’ continue to feel the pressure to optimize, while cloud costs will be put under greater inspection as organizations shift from a cloud-first strategy to a cloud value strategy.

Failing to do so will expose companies to the full brunt of economic headwinds and to quote General Motors’ Charles Kettering: “A problem well stated is a problem half-solved”.

Importantly, as CIO’s move through to 2024, it’s an incredible opportunity to Drive business expansion on multiple fronts, harness technology innovation across all lines of business, build a culture of dollar cost accountability, be the strategic advisor to the CEO and board and ensure cyber and cloud resiliency – all while ‘keeping the lights on’.

This is the time to be bold.