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Forrester: 2013 continues to stress CIOs and IT Budgets in Asia Pacific

T.C. Seow | Sept. 1, 2013
Less than half of Asia Pacific organisations will increase their IT spending in 2013; Singapore prioritises technology as much as peers in developed economies

So far, the year has been fairly encouraging to the IT community around the region, according to a new report by Forrester Research, which says IT budgets for 2013 in Asia Pacific are in better shape than in the rest of the world, but not by much.

Although 18 percent of organisations in the region will increase their IT spending by 7 percent or more in 2013 (see graphic below), most CIOs in Asia Pacific are coming under far more budget pressures than in previous years.

Overall, less than half (45 percent) of Asia Pacific organisations will increase their IT spending in 2013, and almost one-quarter (21 percent) will reduce their IT capital spending.

In addition, Asia Pacific CIOs now directly control less than 60 percent of enterprise IT spending. IT groups in Asia Pacific account for 58 percent of IT purchases in 2012—down from 2010, when they purchased 74 percent of their organisation's IT.

Forrester chart

In contrast, Forrester's data shows that business leaders are often growing their IT spending at very healthy rates even as CIOs deal with budget reductions. Business leaders focused on business outcomes and innovation directly controlled 33 percent of regional enterprise IT spending in 2012—a share that is growing quickly.

"Time is running out for CIOs to partner with the business," writes Dane Anderson, Vice President, Research Director and Asia Pacific Manager at Forrester Research. "Emboldened business leaders across Asia Pacific are increasingly driving reorganisation and retraining efforts to extract greater value from their technology."

Consistent with the pressures CIOs face, the research findings show that the top two technology initiatives prioritised by IT departments across Asia Pacific are budgetary related: 54 percent cite 'improving budget delivery performance' as a priority, while 52 percent cite 'improving IT budget performance'.

In comparison, 'data and analytics to improve business outcomes' ranks as business leaders' top IT priority for 2013, while it came in third for IT leaders. More importantly, the top reason that business leaders are spending more on technology is because they believe that it's too important for the business not to be involved.

Interestingly, the regional story in Asia Pacific has two distinct categories that break along the fault line between emerging and developed markets.

  • Singapore is the second closest to North American spending patterns among Asia Pacific markets, just behind Australia. Spending 5.8 percent of revenue on IT, organisations in Singapore prioritise technology as much as their peers in developed economies around the world, but similarly suffer from slight growth expectations for 2013.
  • While IT budgets in Singapore will not grow as fast as China or India, 35 percent of organisations in Singapore plan to increase spending in 2013, close to double of organisations (18 percent) that plan to decrease it

 

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