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Asian governments eye prudence amid higher IT budgets

Asia-Pacific public sector set to up ICT expenditure by 7.1 percent this year over 2010, but administrations will insist on initiatives that offer best bang for the buck, reveals new forecast.
Written by Vivian Yeo, Contributor

Governments across the Asia-Pacific region, excluding Japan, are expected to increase ICT spending this year but will remain cost-conscious, focusing on investments that will offer the best returns.

According to an IDC report released Wednesday, 2011 technology budgets in the region's public sector is expected to grow 7.1 percent over last year to US$34.8 billion.

However, government administrations will continue to focus on cost management, and demand products and services that provide the best bang for the buck, the research firm noted.

It added that Asia-Pacific governments will invest in four areas focusing on operational efficiency, business-IT alignment, risk management and citizen-centricity.

In line with these, governments will place more emphasis on the adoption of private clouds over public clouds as the former avail flexibility and scalability without compromising security, availability and reliability, predicted IDC.

In addition, to improve interaction with citizens, the public sector will look to incorporate social analytics into the decision-making process and Web 2.0 engagements.

Boosting technology clusters
According to IDC, various economic stimulus packages introduced over the last few years brought about notable transformations in the region's ICT landscape. These economies have become more open to spur ideas and tap relevant expertise.

"To cope with progressively more borderless and collaborative business environments, Asia-Pacific public sector organizations need to achieve functional ICT integration and operational transformation agility," Gerald Wang, senior market analyst at IDC's Government Insights Asia-Pacific, said in the statement.

To that end, governments in the region will increasingly work on "the soft and hard national infrastructure to create sustainable cities", said IDC. This includes amassing knowledge in the form of building up universities and research laboratories, attracting venture capital dollars and talent, and empowering local institutions with capabilities to enforce intellectual property rights.

As part of the drive toward sustainable growth, Asia-Pacific governments will also focus on IT insourcing, with some bringing offshore work back into their own jurisdictions, the analyst firm noted.

According to IDC, the top three fastest growing markets in the region, in terms of public sector ICT expenditure between 2011 and 2014, will be Indonesia, India and Vietnam. All three countries are expected to achieve a double-digit compound annual growth rate over five years.

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