APAC govt IT spend cautious, but growing

Public sector IT spending in the region will grow this year, but is expected to be cautious due to greater scrutiny and need for accountability, finds new report.
Written by Vivian Yeo, Contributor

Governments across the Asia-Pacific region will be more cautious on ICT spending this year, but the public sector is still expected to drive longer-term investments in infrastructure and manpower, according to a new study.

The report released Tuesday by IDC's Government Insights, indicated that, excluding Japan, the region's government IT spend in 2009 will grow an average of 6.8 percent in spite of the global economic crisis. The forecast, slightly lower than the 7.4 percent IDC had earlier predicted, does not take into account the various stimulus packages in Asia.

Raphael Phang, Asia-Pacific vice president of Government Insights, said: "The public sector in this region remains a high value and stable opportunity for ICT vendors, as ICT investment and management are closely aligned with governments' goal of economic recovery."

Phang noted that among the other drivers for spending, the Asia-Pacific public sector is expected to take on a "business role" of both regulating and stimulating the economy in 2009, as citizens look to their governments to revive ailing markets.

During the year, IDC expects the spotlight to fall on public infrastructure projects, which will be pursued to stimulate economies. Public sector investment behavior will also be scrutinized, the market analyst added, with governments held accountable more than ever.

ICT spending is likely to proceed cautiously, and national ICT plans in the Asia-Pacific excluding Japan (APeJ) region will be reviewed to emphasize cost savings as well as identify cross-sector initiatives to boost economic development, said IDC. In addition, the public sector will make the renegotiation of contracts a priority and is expected to incline toward multi-vendor sourcing.

BI, Web 2.0 on govt agendas
According to IDC, public sector executives in the APeJ region will increasingly tap on business intelligence (BI) tools to help them manage rising security threats and meet growing compliance requirements. BI tools will also help the region's public sector to become more efficient, and add value to large-scale modernization plans.

Within the region, about 42 percent of government agencies are deploying business analytics for the first time, noted Phang.

The analyst firm also predicts an acceleration in the use of Web 2.0 technologies by governments in the region. The move toward digital inclusion will see administrations focused on more efficient channels of communication with their stakeholders.

Green IT will also feature on the agenda of Asian governments, noted IDC. The momentum will be led by cost reduction or the drive toward "lean IT" particularly in the challenging economic climate.

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