IT buying decisions more complex in 2013

CIOs and IT departments will no longer have complete control over buying decisions as the rise of cloud and mobility mean other business units will want their say. This is expected to spike expenditure.
Written by Kevin Kwang, Contributor

SINGAPORE--IT consolidation will continue to gain traction among businesses in Asia-Pacific, and this will complicate IT buying decisions as business units such as marketing and sales will want to have a say on what technologies best suit their needs.

This would be one of the key industry trends going forward into 2013, noted Andrew Milroy. The vice president of Asia-Pacific ICT practice at Frost & Sullivan said at a briefing, held here Thursday to unveil the research firm's top predictions for the coming year, that cloud computing, mobility, big data, and social media are transforming how organizations and individuals engage with one another.

Cloud computing and mobility, in particular, are helping companies streamline their operational processes and reducing the number of tasks that need to be carried out by IT teams, Milroy pointed out.

As a result, IT departments are shrinking and 2013 will see "less aggressive" hiring efforts for general IT professionals. On the flipside, other divisions such as marketing and sales could look to hire business-oriented tech employees to bridge the gap between implementing IT and adding value to the company, he advised.

"Tech knowhow will be embedded in different areas of the company outside the IT department", the analyst said, noting IT expenditure will now be determined by other stakeholders.

The marketing team, for example, would look into areas such as social analytics and collaboration tools to better engage customers, and the cost for such implementations would come out from their budgets rather than IT, Milroy explained.

These developments mean IT expenditure for 2013 will likely increase, though he did not state by how much, and expenditure will be spread across a wider cross-section of the organization instead of just the IT team.

Telcos need new BUs to grow revenue
Another industry trend that will emerge next year is how telcos would look to create new business entities, with no links to other existing units, in order to discover and develop new revenue-generating business opportunities.

Nitin Bhat, partner and head of consulting in Asia-Pacific at Frost & Sullivan, said at the same briefing that telcos are pressured by how their core businesses--voice and messaging--continue to decline in terms of revenue. Even the growing adoption of data plans among customers is insufficient to stem the downward spiral, he said.

As they scramble to arrest the slump, Bhat urged telcos to consider carving out new business units (BUs) and  look for growth areas outside of their current operations. Key to determining which new business areas to enter is finding out what customers are demanding, and this is something telcos are not very good at, he added.

"Telcos tend to be too aloof from their customers, and don't use their tech assets properly to mine available data to discover what people are asking for. Customer-centricity is something they should focus on," he stated.

These new BUs will be unfettered and need not report to existing business lines, allowing them to think outside the box and develop new products such as machine-to-machine (M2M) implementations and connected cars, the analyst explained.

Another analyst firm, IDC Asia-Pacific, previously predicted telcos would have to work with software developers and build out their developer ecosystems to stay relevant and boost their bottom lines. Sandra Ng, general vice president of ICT practice at IDC Asia-Pacific, said their traditional mindsets and business models of working alone without involving partners would have to be thrown out for them to stay competitive. After all, as cloud computing matures and IT services become a more lucrative market than selling connectivity packages, operators will increasingly feel the pressure to evolve their practices, Ng added.

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