Gartner says 38% of spend already outside of IT

CIOs need to embrace technology startups inside their organisations as demand and control shifts away from IT and toward digital business units closer to the customer.

This was a key message delivered yesterday by Peter Sondergaard, senior VP and global head of research at Gartner at the researcher’s 2014 Symposium in the US.

He said 38 per cent of total IT spend is already outside of IT, with a disproportionate amount in digital, said Sondergaard. By 2017, it will be over 50 per cent, he said.

“Digital startups sit inside your own organisation, in your marketing department, in HR, in logistics, and in sales. Your business units are acting as technology startups,” he said.

Gartner defines digital business as new designs that blend the virtual and physical worlds, changing how processes and industries work through the Internet of Things.

“The year, enterprises will spend over $40 billion designing, implementing and operating the Internet of Things, Sondergaard said.

“Every piece of equipment, anything of value, will have embedded sensors. This means leading asset-intensive enterprises will have over half a million IP addressable objects in 2020.”

Sondergaard said the new “digital startups” inside organisations are hungry for data analysts, software developers, and cloud vendor management staff, and they are often hiring them faster than IT.

“They may be experimenting with smart machines, seeking technology expertise IT often doesn’t have.

“You must build talent for the digital organisation of 2020 now. Not just the digital technology organisation but the whole enterprise,” he told CIOs.

Skills in mobile, user experience, and data sciences are currently in demand, and three years from now, CIOs will need to hire people in the areas of smart machines, robotics, automated judgement, and ethics.

Over the next seven years, there will be a surge in new, specialised jobs such as integration specialists, digital business architects, regulatory analysts, and risk professionals, Gartner said.

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Follow Byron Connolly on Twitter:@ByronConnolly