CIO Summit 2012: BYOD necessary but increases costs: IDC

CIOs should prepare for higher costs with bring your own device (BYOD), IDC analyst Tim Dillon said at the CIO Summit in Sydney. Dillon also spoke about “creeping uncertainty” affecting CIOs’ business outlooks.

“The assumption that we will save money” with BYOD is not accurate, Dillon said. Most organisations see a 7-10 per cent increase in costs, he said. Part of the reason is that group mobile plans are cheaper than paying for each employee’s individual plan, he said. BYOD also requires companies to spend more on security and other areas, he said.

Still, the shift to BYOD is unavoidable, Dillon said. “You have to at least plan around consumerisation and BYOD.” The reason employees want to bring their own equipment is that businesses’ existing architecture doesn’t provide them everything they want, he said.

Dillon said he sees little excitement from businesses in Microsoft Windows 8. Many organisations have moved or have plans to move to Windows 7, he said. Most say they “might skip 8,” he said.

Rising costs, market uncertainty and cash flow are driving changes at businesses, Dillon said. In a survey of CFOs, IDC found that that 40 per cent in the next six months will be consolidating suppliers, increasing credit lines, leasing rather than buying equipment and outsourcing non-core business functions, he said.

CFOs see IT as an enabler to cut other business costs, and IT itself is low on the list of where CFOs are looking for cuts, Dillon said. IDC found that 75 per cent of CFOs actually view IT as “a source of competitive differentiation” that can improve operation efficiencies, support innovative products and services and enhance customer retention and relationships, he said.

However, the same 75 per cent of CFOs complain that IT implementation takes too long, say there can be a better return on investment elsewhere and see technology as a commodity, Dillon said.

Uncertainty is also “creeping into” CIO views of business prospects, Dillon said. More CIOs reported negative outlooks in a May 2012 IDC survey than they did in one conducted November last year, he said. However, most CIOs in the survey still reported a positive outlook. Similarly, more CIOs reported a budget decrease than last year (13 percent, up from 8 per cent). But 30 per cent said their budgets stayed flat and 52 per cent reported an increase, he said.

The “four pillars” of IT today are cloud, mobility, social media and big data, Dillon said.

Cloud is a US$15.8 billion market and 40 per cent of new software purchases will be in the cloud, Dillon said. By 2015, 40 per cent of Asia-Pacific employees will be mobile and there will have been one-half billion smartphones shipped, he said. Dillon said 50 per cent of APAC organisatios have a social business strategy. The big data technology and services market globally is US$16.9 billion, he said.

Social media should be optimised for mobile, Dillon said. Three-quarters of social media users access the service through mobile, he said.

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