Increased Investment in Cloud Projects at the Top of IT Priority List; Market for Talent Remains Tight 

Despite the rise of inflationary pressures and a global economic slowdown, few Australian organisations are scaling back on IT investment and most are committed to spending more, according to Managing IT in Challenging Economic Times a new survey of more than 1,400 global IT professionals conducted by Rackspace Technology® (NASDAQ: RXT), the leader in end-to-end multicloud solutions. 

Though survey respondents identified the economic slowdown, inflation and rising energy as the three leading factors impacting their organisations, almost half (49%) of Australians say that investment in technology has actually increased as a result of these pressures, while only 29% say they have investing less, and 21% say they have maintained the same level of investment but have reprioritised based on evolving needs. Looking forward, 64% of Australians surveyed say the current economic climate is leading them to invest more in IT infrastructure, while only 36% plan to reduce their overall investment. 

"Despite the global economic headwinds of today, organisations are increasingly investing in their IT expenditures to weather these uncertainties. In fact, the survey results demonstrate a doubling down on technology investments, as organisations continue to reap the rewards of cost efficiencies and overall return on investment. It’s clear, leaders have listened to their IT professionals and have recognised technology remains at the core of growth and competitiveness,” said Angeline Maronese, Managing Director for ANZ at Rackspace Technology. 

Seeking Efficiencies Through the Cloud, Innovation 

According to the research, IT organisations are adopting a variety of approaches to adjust to the current economic climate, led by an increased focus on cloud projects that can drive efficiencies (62%) and investment in innovation projects (58%). Across all global regions, leaders identified cloud projects as the single most important factor in navigating the current economic climate, as well as the leading source of re-prioritised investment versus their original budget allocation. 

Moreover, when asked to rank their leading areas of investment focus for the next 12 to 18 months, Australian respondents highlighted cloud operations as the most important strategic IT priority, at 80%, followed by security (66%) and digital transformation (55%). More than 33% of Australian respondents also say they either have already moved or plan to move all of their IT infrastructure to the cloud, while a further 43% only expect a small percentage of infrastructure (between 1% and 10%) to never move to the cloud. 

As they increase their cloud investments, organisations are also becoming more sophisticated at managing cloud costs and deriving value from their investments. Two-thirds (67%) of Australian respondents said that their organisation had established FinOps capabilities, with 85% saying that their organisation’s FinOps capabilities are either of medium maturity or high maturity. 

“With budget cuts from economic slowdown top of mind, being smart about the types of technology you adopt is key. Early adoption of cloud transformation projects provides the scalability, innovation, cost-effectiveness, and flexibility needed to enable IT teams to deliver on their technology investments. In addition, ensuring organisations have a comprehensive FinOps strategy will be crucial to navigating future economic instability,” added Maronese.  

Even in Tougher Times, Talent Remains Scarce 

Even amidst economic uncertainty, IT organisations are still facing a tough talent environment. 61% of Australians said they are struggling to fill technical vacancies, especially in the areas of cybersecurity (62%), machine learning (57%), data analytics (55%), data engineering (46%), cloud architecture (38%) and network engineering (36%). 

61% of Australian organisations are also struggling to retain IT staff with specific in demand skills. In response, they are offering additional training opportunities (67%), increasing the value of rewards (65%), instituting salary increases (57%), making work/life balance improvements (38%), among other tactics. 

Over half of respondents globally (52%) and Australian (57%) said their organisation is downsizing employees. Australian organisations are reducing their HR teams by over two thirds (67%) compared to globally (56%), making the same changes to their sales and marketing teams (47% vs 49%), and IT operations (30% vs 38%).  Finally, given talent scarcity, 85% of Australian organisations are also looking for ways to enable technology to perform work traditionally performed by humans, especially in the areas of customer service (63%) and IT operations (66%). 

“Though economic conditions have shifted, it’s clear that organisations are still fighting against a very challenging market for talent, especially in key priority areas. Finding new ways to leverage technology to address some of these shortfalls can help companies navigate the next 12-18 months, as will strategic use of outside resources,” said Jeff DeVerter, Chief Technology Evangelist at Rackspace Technology.