Indian CIOs lead APAC IT budget amidst pressure

by CXOtoday News Desk    Sep 04, 2013

india budget

Indian companies lead the Asia-Pacific region in terms of budget expansion ahead of their Chinese couterparts, even though CIOs across sectors are under the pressure of budget reductions, according to a new report by Forrester Research. The survey reveals that over 19% Indian companies are increasing their IT budgets in the next one year by over 10%, ahead of China where only 14% are looking to increase tech budgets. Philippines is on the third position with nearly 10% of businesses looking to increase budget.

Indian firms in better shape

“Indian organizations planned to expand their IT spending at faster rates than their regional peers at the beginning of the year,” says Dane Anderson, Vice President, Research Director and Asia Pacific Manager at Forrester Research. However, he adds that the deteriorating economic conditions have dampened some of their aggressive plans from that time.  Despite the current pressures, we expect Indian IT budgets to be among the fastest-growing in the world for years to come.

Notably, the overall IT budgets in Asia Pacific this year has been in better shape than in the rest of the world, according to Forrester. But CIOs are under a lot of pressure to cut cost in the most effective ways. In terms of revenue share, India and China will however spend the least in the region on IT at 3.0% and 1.4% respectively.

On the whole, less than half of APAC organizations will increase their IT spending, and almost one-quarter will reduce their IT capital spending. On the overall bleak scenario, Anderson explains that APAC CIOs now directly control less than 60% of enterprise IT spending. IT groups in APAC account for 58% of IT purchases in 2012 — down from 2010, when they purchased 74% of their IT.

Involvement of business leaders

Forrester report observes that business leaders focused on business outcomes and innovation directly controlled 33% of regional enterprise IT spending last year, it said.CIOs and IT leaders across APAC are prioritizing in two key areas as far as IT budgets are concerned, the report noted. The most important area as cited by 54% respondents is improving budget delivery performance and 52% highlighted improving IT budget performance. Most respondents said data and analytics are the key technologies to improve business outcome.

Similarly there has been a tremendous shift in the way business leaders are spending more on technology. Most of them believe that it’s too important for the business not to be involved. Forrester concludes that if CIOs continue to adapt to the new business-powered budget reality in APAC, they will be in a better position for success than the rest of the world.