Spending IT Budgets Wisely

        IT budget growth has slowed in Asia Pacific as businesses respond to current economic challenges. In this article, Mr. Natasak Rodjanapiche, Managing Director outlines the trends in current spending and the technology options available to CIOs to maximise business benefits and return on investment.

Spending money on technology has become a game of tactics, strategic moves and potential risks for businesses throughout the world. Globally, technology spending has slowed in response to the current global economic downturn.

In Asia Pacific, companies are operating in a weak economic environment - with the economy in the region projected to expand by 3% this year and 4% in 2003. Throughout 2001 and 2002, achieving cost savings was one of the main issues for Asia Pacific operations of multinational and local organisations alike and remains a major objective through into 2003.

Companies looking to achieve cost savings have reacted by cutting IT budgets and overall, there appears to be constrained momentum in Asia Pacific IT spending, with analyst predictions varying from 2.6% to 5.8% growth in 2002 and slightly more optimistic growth outlook of over 9% in 2003.

‘Bare bones’ approach creates new buying patterns
Despite the optimistic outlook, for the moment, many IT executives are not getting any more money, which means they have to make the most of what they already have and be cautious about further spending. Any request to the Board to sign off new projects will come under close scrutiny for essential value to the business.

In the wake of the slowing economy, a “bare bones” approach to technology spending has taken over and created new buying patterns, with the focus on selecting the most affordable option that can deliver the quickest return on investment. This is taking the form of smaller, highly measurable projects and, increasingly, an interest in outsourcing IT functions, to boost efficiency and save money.

Technology that keeps a business up and running while also giving it a competitive edge will be most sought after. In reviewing the current business landscape, Oracle recommends a technology progression path for those wanting to stay ahead of the curve yet save money.