ICT Spending to Rise Despite Economic Crisis

By Greg McNevin

February 18, 2009: According to IDC’s latest Government Insights report, public sector spending on ICT in Asia Pacific excluding Japan (APEJ) will rise despite the deteriorating economic environment.

The analyst firm claims that the APEJ public sector will dig deep, but strategically, into its resources to focus on long-term investments that are expected to steer the weakening global economy back onto the path of recovery during 2009.

“Citizens are placing the onus of reviving the ailing economy on their governments. As such, the public sector will be under increasing scrutiny,” says Raphael Phang, Vice President, Government Insights, Asia/Pacific. “Despite having to operate in such an exceptionally challenging environment, the public sector in this region remains a high value and stable opportunity for ICT vendors, as ICT investment and management are closely aligned with governments' goal of economic recovery.”

Specifically, IDC says that wider public sector goals such as digital inclusion and sustainable development are expected to frame and drive spending in infrastructure development and manpower upgrading.

In the short term, enhanced planning and forecasting capabilities, new business models, and best practices will be taken advantage of to achieve greater value and cost reductions.

For overall trends during the coming year, IDC says that ICT spending will take a more cautious tone, and will see the public sector renegotiate existing contracts to maximize service value and partner expertise, while shifting towards multi-vendor sourcing.

Economic volatility will also see business analytics assume strategic importance, with public sector executives increasingly looking to insights offered by business intelligence (BI) tools to help them manage rising security threats, meet growing compliance requirements, become more efficient, and enhance and manage performance of large-scale modernisation plans.

Finally, sustainable development will gather steam under the guise of cost reduction, and while governments will dabble with social networking and new media, the public sector will look for not just more, but also efficient, ways to connect with its stakeholders.

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