News Article -- May 13, 2004
"Value" Cited As Most Important In Investment Strategies
(source : New Straits Times, Computimes)by Jason Tan
ABOUT 33 per cent of enterprises worldwide highlighted "value" as the most important factor for their investment strategies this year, according to International Data Corp (IDC)'s Services Spending Intentions Survey conducted last year to January this year. Of the 100 chief executive officers (CEOs) and chief information officers polled, 28 per cent of them said "cost of efficiency" is significant. They expect to achieve operational excellence and cost advantage, at the same time acquiring industry knowledge from the solution deployment.
"For most CEOs, the top priority is to find out how information technology (IT) service providers will work across complexities to leverage on the organisation's strength," says Phil Hassey, IDC's associate director of Asia-Pacific Services Research, at the recent IT Industry Business Briefing Directions 2004: Making IT Matter. In addition to the return of investment, they wish to know how to source and govern the solutions, Hassey says.
"IT is not an island and it can't work in isolation. It is a process, it should work in parallel to human resource, finance, production, and marketing."
CHANGING LANDSCAPE
Market demands, according to Hassey, have changed over the past three years and some vendors have responded to the new requirements. Among them are the top five service providers — IBM, EDS, Accenture, HP and CSC.
"Service providers are building global sourcing models that mimic a 'virtual' services supply chain that can optimise utilisation rates of labour resources, accelerating time-to-market period and lowering overall geographic risks," he says. "Providers with modest footprints cannot compete effectively," he cautions, stressing that opportunities will however increase for niche providers.
As such, offshore is a way to move IT, Hassey says. Over the next three years, nearly 50,000 jobs will be created in emerging countries by only four service providers. Leading services have already been offshored, and will continue to be offshored, he notes. He adds that to survive in the competitive landscape service vendors should develop cross-disciplinary initiatives, and be connected to technology innovation.