Developed SMBs to increase IT services spend

IT services expenditure among small and midsize firms in Australia, Korea and Japan will grow 10 percent from 2009 to 2013, says AMI.
Written by Liau Yun Qing, Contributor

Small and midsize businesses (SMBs) in developed economies Australia, Korea and Japan, will increase their IT services spending at a compound annual growth rate of over 10 percent from 2009 to 2013, said AMI-Partners.

In a report released Friday, the research firm said the global economic crisis has pushed these SMBs to increase their use of IT services to reduce operational cost, ensure productivity, maintain competitive edge and support growth.

According to AMI-Partners, IT services spending among SMBs in the three developed countries exceeded US$23 billion in 2008, with professional services accounting for almost two thirds of expenditure.

"IT services is a growth area for these SMBs because companies want to be able to minimize operational expenses and devote valuable resources to their core businesses ensuring the delivery of quality products and services to their customers," Augusto Carlos, IT services senior analyst at AMI-Partners Singapore, said in the report.

The study also highlighted key opportunity areas for IT services spending, namely, IT development and integration, IT management and process management.

Carlos explained that SMBs in these developed markets have mature ICT infrastructures and their requirements are focused mostly on integrating hardware and software. These companies also want assurance that their systems and processes function effectively on a daily basis and that any IT issues will immediately be resolved and disruptions minimized, he said.

IT management has proven to be a cost-effective option and it allows companies to satisfy requirements that they cannot handle internally, according to AMI-Partners.

The research firm said different key challenges among the three countries affect their spending behavior. In Japan, SMBs want to grow revenue, and identify and retain good vendors especially in the current business climate. Amongst Australian SMBs, the main business challenge is to find and retain talented employees. SMBs in Korea want to increase customer satisfaction and loyalty, according to the report.

For vendors to be successful in these three markets, AMI-Partners advised these companies to have the right market intelligence and framework.

"Further educating SMBs on the benefits of engaging in IT services and assuring them of the security of their IT management needs, especially if they are considering outsourcing, will greatly benefit businesses and vendors alike," said Carlos.

"Moreover, understanding the SMB IT decision-making process and key influencers, what their main sources of information are, and who are the channels used will be the key components to driving IT services adoption in the [three developed markets] in 2009 and beyond," he added.

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