Australian firms have a backlog of digital transformation projects which unsustainably dwarf IT budgets, new research finds.

IT spending across all industry sectors in Australia will grow 3.6% to more than $95.8 billion this year, following a 2.8% decline in 2020, the report from The Economist Intelligence Unit, sponsored by Appian, says.

“The discrepancy between budget and demand is much more pronounced in Australia than in the rest of the world,” the report, based on a survey of more than 1000 executives at major corporations, including insurers, said.

IAG COO Neil Morgan says the successful work of IT teams during the past year has created a new expectation about the role technology can play in business transformation. Boards have been impressed by how CIOs have used cloud and collaborative technologies to keep businesses operational in extreme circumstances – and now they want more.

“The behavioural change we’ve seen, and the speed of those behavioural changes, has created this additional level of demand. We’ve definitely seen uptake of digital services accelerate and that has created this momentum around change,” Mr Morgan said.

Four in five Australian business leaders believed their organisation needs to improve IT infrastructure and applications in order to better adapt to external change. Data accessibility, however, was a major hurdle, with 71% of Australian business leaders reporting cancelling a digital business project due to lack of the right data, compared with the global average of 54%.

Mr Morgan says data has to be maintained, nurtured and invested in and this needs to be a cross-business endeavour. IAG has a data and IP governance group which ensures everyone makes balanced and ethical decisions on the sourcing and sharing of data.

He says having technology leaders as part of leadership teams means ideas become more executable.

“Some of the delivery norms get pushed, [and] cycle times on figuring out feasibility and decision-making get crushed and become much faster.”

IAG’s collaborative approach makes it easier to explore data-led initiatives, from artificial intelligence (AI) to robotic process automation and machine learning, he says, pointing to predictive total-loss technologies, which combine AI and data to speed-up insurance claims for customers.

“We can take two and a half weeks out of the end-to-end process when a car’s been written off in an accident,” he said. “It’s about trying to find those opportunities to combine process automation excellence with AI and data that turn up in material outcomes for customers.”

The survey found cloud computing, data science and analytics, and the Internet of Things (IoT) are seen as the technologies that will be most important during the next 12 months.

Cover-More CIO Nicki Doble says the travel insurer uses global development teams in the US, India, Australia and the Republic of Ireland, and this – along with remote working – makes it much easier to source global technical talent.

“It might mean going to a different area of the business that might not necessarily use data, showing them the tools and getting them to see the pulling power,” Ms Doble said.