Asia Pacific companies plan to increase their software budgets by 4.4 percent on average in 2010, while overall IT budgets was expected to decline by 3.1 percent on average, according to the latest survey by Gartner. More organizations in Asia Pacific (38 percent) expect to increase their software budgets in 2010 than their overall IT budget (31 percent).
"For most organizations, the budgeting process happens once a year, but adjusting the IT budget is a continuous exercise that is driven by economic conditions and changes in the business," said Gartner Research Director Yanna Dharmasthira. "In the midst of economic volatility, hardware budget allocation remains the top priority in most countries, but software budgets are a real bright spot and continue to demonstrate a positive outlook, although more cautious when compared with last year's survey."
The survey showed that the average expected increase in software budget of 4.4 percent in Asia Pacific is higher than all other regions surveyed including Europe, Middle East and Africa (EMEA), North America and Latin America. India-based respondents are consistently the most optimistic, with the highest number of respondents intending to increase their IT budget in 2010 (42 percent), followed by China (32 percent). On the other hand, Malaysia-based respondents remain pessimistic, with the largest number of respondents intending to decrease their spending (52 percent), followed by Singapore (48 percent of respondents).
The respondents of this survey were asked whether they expected their 2010 IT budget to be below, the same or exceed their IT budget for 2009. Gartner surveyed 323 IT managers in Australia, Singapore, Malaysia, China, India and Hong Kong, as part of a worldwide survey of 982 respondents, to help business and IT managers compare their enterprise IT spending with peer organizations.
Software is expected to represent the second-largest portion of the IT budget in most countries, with the exception of India (where software and hardware spend are roughly equal) and Australia (where spending is notably higher on IT staff). India is the most aggressive with the highest software budget allocation (26.9 percent), followed by Singapore (25.8 percent), Malaysia (24.1 percent) and China (23.1 percent).
India is also the most optimistic in software spending, with the average expected change in software budget of plus 10 percent. Dharmasthira said that vendors should revisit their potential customer list, as they may have shifted in terms of geography, as well as market segments. "Software vendors should not only focus sales efforts on traditional hot spots such as India and China, but look at opportunities in mature markets too. The intentions to increase software budget have become more varied among different countries and organizations, presenting good opportunities in a mix of developed and emerging countries," said Dharmasthira.
Agencies
Showing posts with label IT budget. Show all posts
Showing posts with label IT budget. Show all posts
Wednesday, September 9, 2009
Friday, October 17, 2008
Embrace the right technologies
Putting your neck out, betting and embracing the right technologies to create a differentiator is one of the major challenges that R. Muralidharan, Chief Information Officer (CIO) of Syntel India is facing. In a interview with Manu Sharma of CIOL Bureau, he shares his views of his achievements as a CIO and also on what he wishes to hear from vendors during the next fiscal. Excerpts:
CIOL: What are the major challenges faced by a CIO?
R. Muralidharan: The major challenges faced by the CIO today revolves around
* Reduction in total cost of ownership of running IT
* Ensuring that IT is always driving business value and consistently being perceived as a business enabler.
* Putting his neck out, betting and embracing the right technologies to create a differentiator.
CIOL: Does your organization link IT budget with the company's performance/growth? If yes please elaborate?
RM: Yes. Syntel does link IT budget with the company's performance /growth. The total IT spend is typically pegged as a percentage of revenue.
CIOL: Can you cite any specific areas where IT has come up as an accomplishment in your stint as a CIO?
RM: There have been quite a few major areas of focus for IT over the last two years in my stint as the CIO of Syntel. There have been significant achievements across not just implementation of technologies but the entire aspect of effective deployment of people, process and technology all aimed towards the goal of being valued as a true business enabler. The areas of significant achievements cuts across all areas of infrastructure such as network, storage, systems/servers, security, telecom all supporting critical internal business applications and connectivity needed for providing services to its global customers. Apart from focus on investments in technologies, there has been a significant focus on processes and people competency development all aligned to delivering value to customers.
CIOL: Going forward, what are the challenges which you foresee?
RM: The challenges of the future envisaged revolves around more and more Green IT initiatives thus enabling significant environmental benefits apart from providing a lower cost of ownership for running IT in the organization. The other challenge revolves around betting on the right technologies for the future which will deliver the maximum benefit to the organization.
CIOL: How far have you come as regards adopting 'Green IT technologies'?
RM: Green IT initiative is a moving target and Syntel is investing significantly on ensuring the all the campuses being built to support the growth is enabled using Green It technologies. On a parallel front, there is a large effort on driving investments in terms of time and processes to ensure that Green IT initiatives are inculcated across the organization thus focusing on reducing carbon foot print.
CIOL: What will be the IT budget for the new fiscal year/ What is the growth rate over last year?
RM: Syntel has been consistently growing at around 25-30 percent and hence the IT budget has also been growing to meet these needs of the growth. Apart from the growth of the operating budget, there is also significant amount of investment being done in investing on cutting edge technologies in its campuses.
CIOL: Name the top 5 items that you expect to spent on this fiscal year?
RM: The top five areas of spend is expected to be in the areas of:
* Build out of campuses to support growth
* Business productivity applications
* Security and Compliance
* Network Optimization
* Virtualization
CIOL: Do you feel the amount allocated for IT is sufficient if yes why? If not why not? How much should you be spending?
RM: IT being typically treated as a cost center, it is extremely important that any investment made in IT should be measured by evaluating as to how it has lowered the total cost of ownership to business. As an IT company that is growing, it is not possible to lower the absolute amount of investment. Hence the yardstick for measurement is to primarily focus on reducing the unit cost of providing IT services to the employees of the organization. We have been able to successfully demonstrate this across all domains. The business value delivered in terms of contribution to the bottom line has been apt so far.
CIOL: How big is the IT staff in your organization?
RM: The total IT organization size globally inclusive of outsourced staff is around 160. This team supports the various business entities within the group engaged in the business of IT services and KPO.
CIOL: As a global company how are you networked all the centres?
RM: All the global delivery and sales offices are networked using multiple technologies such as ATM, MPLS, Frame Relay and IPsec VPN's over the Internet cloud. The core network is built over Nortel Passport WAN switches that support data, voice over IP and video traffic. This backbone enables us to seamlessly integrate into our customer networks securely while at the same time providing scalability and high availability to meet varied requirements at an optimum cost.
CIOL: Is it difficult to gets adequate funds for IT implementations?
RM: The biggest challenge for CIO's for getting funds for new IT implementations is to continuously work on reducing operating expenses as a percentage of the total budget for keeping lights ON and meet business expectations of IT availability. It is always a moving target as every CIO would like to get the maximum funds diverted for new implementations.
CIOL: What part of IT implementations plays a more prominent role? Software or hardware or networking? Why?
RM: IT needs to be viewed as a tool and not the end. Hence no individual component whether it is hardware, software or networking is individually more or less important. What business gets in a highly mobile environment in today's context is a function of achievements across all these domains to enhance the user experience level.
CIOL: The success or failure of an IT deployment should be attributed to whom, the CIO or the vendor, or is it a collaborative accountability?
RM: Though any CIO would like to always have a joint accountability or would like to blame it on the vendor to cover up for failure, I firmly believe that it is always the CIO's accountability for the success or failure of an IT deployment. One can't have a situation where the CIO is complemented for success but the stick is on a collaborative accountability or put on the vendor. The CIO is in the best situation to know what fits his business the most and also the prerogative to choose the vendor and partner most suited to be successful for his business environment.
CIOL: What percentage do you outsource a portion of your IT project?RM: To a large extent possible, Syntel works in developing and implementing core technology components internally. What is typically outsourced for BAU support is low end hardware support activities. For any IT project under implementation, Syntel works very closely with its vendor partners to ensure that an optimum solution is implemented while ensuring that internal skills are developed. This helps us leverage our experience in these domains to deliver value and thought leadership to our clients while delivering IT and infrastructure services. CIOL: Has the nature and pattern of IT adoption become more sophisticated? If yes, to what extent?RM: IT has become an integrated tool as every aspect of business relies on IT. To this extent the dependency on IT by the various stakeholders and users has become very high. Some of the complexities or sophistication arises out of the diversified business needs and this coupled with the plethora of vendors providing various technology options. The sophistication of diverse user requirements is translated into sophistication in the need for integration of various technologies to deliver business value to the end user and business. This is making the task more and more difficult for the IT organization in terms of timely delivery of integrated solutions matching the pace of the need by the business.
CIOL: Are some enterprises under the myth that modernization processes such as automation and IT deployment can take place only in large enterprises? Elaborate.
RM: Yes. Today IT is all-prevalent and an enabler for growth. Investment in the right technologies for small and medium enterprises will help them be well prepared for scale up and growth. CIOL: As a CIO what would you wish to hear from vendors during the next fiscal?RM: One of the biggest challenges hearing from vendors is always the gap between what then can deliver vis-à-vis what they actually deliver. Secondly, there are a lot of exciting technologies in the areas of virtualization, unified communication etc. which is going to key investment areas. Key areas that I would like to hear from vendors is factual information of what they can deliver which will really help in reduce the time spent on POC's and implementing thus enabling a faster return on investment and maximizing business benefit.
CIOL: With so many vendors pushing their products, how are you able to distinguish what really works in your organization?
RM: We have a very elaborate and rigorous evaluation methodology when it comes to embracing any new technology and product. One of the key aspects of product selection focuses on relevance and adaptability to our work environment and we have been able to do a decent job so far.
CIOL: So many IT products fail after being implemented Why?
RM: There a lot of elements that needs to be addressed for a successful IT implementation. Beyond just simply what the product can do which can be addressed using a one time good evaluation process, there are areas of continuous investments in the right processes and people competency development that needs to be done to sustain the implementation and also keep upgrading it on a periodic basis to meet the changing business requirements as well as technological advancements. These are bigger challenges than the product itself and this also has a longer lifespan. These are areas where most failures occur. Or put differently, this is where competing organizations adopting similar products and technologies also differentiate themselves.
CIOL: What are the major challenges faced by a CIO?
R. Muralidharan: The major challenges faced by the CIO today revolves around
* Reduction in total cost of ownership of running IT
* Ensuring that IT is always driving business value and consistently being perceived as a business enabler.
* Putting his neck out, betting and embracing the right technologies to create a differentiator.
CIOL: Does your organization link IT budget with the company's performance/growth? If yes please elaborate?
RM: Yes. Syntel does link IT budget with the company's performance /growth. The total IT spend is typically pegged as a percentage of revenue.
CIOL: Can you cite any specific areas where IT has come up as an accomplishment in your stint as a CIO?
RM: There have been quite a few major areas of focus for IT over the last two years in my stint as the CIO of Syntel. There have been significant achievements across not just implementation of technologies but the entire aspect of effective deployment of people, process and technology all aimed towards the goal of being valued as a true business enabler. The areas of significant achievements cuts across all areas of infrastructure such as network, storage, systems/servers, security, telecom all supporting critical internal business applications and connectivity needed for providing services to its global customers. Apart from focus on investments in technologies, there has been a significant focus on processes and people competency development all aligned to delivering value to customers.
CIOL: Going forward, what are the challenges which you foresee?
RM: The challenges of the future envisaged revolves around more and more Green IT initiatives thus enabling significant environmental benefits apart from providing a lower cost of ownership for running IT in the organization. The other challenge revolves around betting on the right technologies for the future which will deliver the maximum benefit to the organization.
CIOL: How far have you come as regards adopting 'Green IT technologies'?
RM: Green IT initiative is a moving target and Syntel is investing significantly on ensuring the all the campuses being built to support the growth is enabled using Green It technologies. On a parallel front, there is a large effort on driving investments in terms of time and processes to ensure that Green IT initiatives are inculcated across the organization thus focusing on reducing carbon foot print.
CIOL: What will be the IT budget for the new fiscal year/ What is the growth rate over last year?
RM: Syntel has been consistently growing at around 25-30 percent and hence the IT budget has also been growing to meet these needs of the growth. Apart from the growth of the operating budget, there is also significant amount of investment being done in investing on cutting edge technologies in its campuses.
CIOL: Name the top 5 items that you expect to spent on this fiscal year?
RM: The top five areas of spend is expected to be in the areas of:
* Build out of campuses to support growth
* Business productivity applications
* Security and Compliance
* Network Optimization
* Virtualization
CIOL: Do you feel the amount allocated for IT is sufficient if yes why? If not why not? How much should you be spending?
RM: IT being typically treated as a cost center, it is extremely important that any investment made in IT should be measured by evaluating as to how it has lowered the total cost of ownership to business. As an IT company that is growing, it is not possible to lower the absolute amount of investment. Hence the yardstick for measurement is to primarily focus on reducing the unit cost of providing IT services to the employees of the organization. We have been able to successfully demonstrate this across all domains. The business value delivered in terms of contribution to the bottom line has been apt so far.
CIOL: How big is the IT staff in your organization?
RM: The total IT organization size globally inclusive of outsourced staff is around 160. This team supports the various business entities within the group engaged in the business of IT services and KPO.
CIOL: As a global company how are you networked all the centres?
RM: All the global delivery and sales offices are networked using multiple technologies such as ATM, MPLS, Frame Relay and IPsec VPN's over the Internet cloud. The core network is built over Nortel Passport WAN switches that support data, voice over IP and video traffic. This backbone enables us to seamlessly integrate into our customer networks securely while at the same time providing scalability and high availability to meet varied requirements at an optimum cost.
CIOL: Is it difficult to gets adequate funds for IT implementations?
RM: The biggest challenge for CIO's for getting funds for new IT implementations is to continuously work on reducing operating expenses as a percentage of the total budget for keeping lights ON and meet business expectations of IT availability. It is always a moving target as every CIO would like to get the maximum funds diverted for new implementations.
CIOL: What part of IT implementations plays a more prominent role? Software or hardware or networking? Why?
RM: IT needs to be viewed as a tool and not the end. Hence no individual component whether it is hardware, software or networking is individually more or less important. What business gets in a highly mobile environment in today's context is a function of achievements across all these domains to enhance the user experience level.
CIOL: The success or failure of an IT deployment should be attributed to whom, the CIO or the vendor, or is it a collaborative accountability?
RM: Though any CIO would like to always have a joint accountability or would like to blame it on the vendor to cover up for failure, I firmly believe that it is always the CIO's accountability for the success or failure of an IT deployment. One can't have a situation where the CIO is complemented for success but the stick is on a collaborative accountability or put on the vendor. The CIO is in the best situation to know what fits his business the most and also the prerogative to choose the vendor and partner most suited to be successful for his business environment.
CIOL: What percentage do you outsource a portion of your IT project?RM: To a large extent possible, Syntel works in developing and implementing core technology components internally. What is typically outsourced for BAU support is low end hardware support activities. For any IT project under implementation, Syntel works very closely with its vendor partners to ensure that an optimum solution is implemented while ensuring that internal skills are developed. This helps us leverage our experience in these domains to deliver value and thought leadership to our clients while delivering IT and infrastructure services. CIOL: Has the nature and pattern of IT adoption become more sophisticated? If yes, to what extent?RM: IT has become an integrated tool as every aspect of business relies on IT. To this extent the dependency on IT by the various stakeholders and users has become very high. Some of the complexities or sophistication arises out of the diversified business needs and this coupled with the plethora of vendors providing various technology options. The sophistication of diverse user requirements is translated into sophistication in the need for integration of various technologies to deliver business value to the end user and business. This is making the task more and more difficult for the IT organization in terms of timely delivery of integrated solutions matching the pace of the need by the business.
CIOL: Are some enterprises under the myth that modernization processes such as automation and IT deployment can take place only in large enterprises? Elaborate.
RM: Yes. Today IT is all-prevalent and an enabler for growth. Investment in the right technologies for small and medium enterprises will help them be well prepared for scale up and growth. CIOL: As a CIO what would you wish to hear from vendors during the next fiscal?RM: One of the biggest challenges hearing from vendors is always the gap between what then can deliver vis-à-vis what they actually deliver. Secondly, there are a lot of exciting technologies in the areas of virtualization, unified communication etc. which is going to key investment areas. Key areas that I would like to hear from vendors is factual information of what they can deliver which will really help in reduce the time spent on POC's and implementing thus enabling a faster return on investment and maximizing business benefit.
CIOL: With so many vendors pushing their products, how are you able to distinguish what really works in your organization?
RM: We have a very elaborate and rigorous evaluation methodology when it comes to embracing any new technology and product. One of the key aspects of product selection focuses on relevance and adaptability to our work environment and we have been able to do a decent job so far.
CIOL: So many IT products fail after being implemented Why?
RM: There a lot of elements that needs to be addressed for a successful IT implementation. Beyond just simply what the product can do which can be addressed using a one time good evaluation process, there are areas of continuous investments in the right processes and people competency development that needs to be done to sustain the implementation and also keep upgrading it on a periodic basis to meet the changing business requirements as well as technological advancements. These are bigger challenges than the product itself and this also has a longer lifespan. These are areas where most failures occur. Or put differently, this is where competing organizations adopting similar products and technologies also differentiate themselves.
Steps into green IT technologies
The world leader in removable data storage media is a beginner in implementing 'Green IT technologies' and are taking it forward without a conscious effort Manu Sharma Moser Baer India, a world leader in the development and manufacture of removable data storage media has just made a beginning in implementing 'Green IT technologies' and are taking it forward without a conscious effort. In a interview with Muthukumar V., Senior General Manager – IT of Moser Baer India spoke to Manu Sharma of CIOL Bureau on various challenges faced an a CIO and the way ahead in tackling major issues.
CIOL: What are the major challenges faced by a CIO?
Muthukumar V: I feel that the present challenges faced by a CIO in the areas of Business Process Transformation, Innovating the enterprise, Deliver the best with the optimal resources, Team Engagement, Building service orientation and Improving on service deliveries provided by and through IT.
CIOL: Does your organization link IT budget with the company's performance/growth? If yes please elaborate?
MV: Moser Baer has no such link where in the company's IT budget is linked to the performance of the firm.
CIOL: Can you cite any specific areas where IT has come up as an accomplishment in your stint as a CIO?
MV: We have tried to leverage the ERP utilization by bringing in more processes and controls within the ERP frame work. These are done either by exploiting the existing functionality that was not implemented or by building functionality within and around the ERP. We have ensured that the investment that we had done in the ERP and other application architecture is fully exploited. We have supported the growth of the business both organically (in terms of volume growth) as well as in-organically (additional business coverage like M&ES, ITCE, Entertainment and PV).
CIOL: Going forward, what are the challenges that you foresee?
MV: I feel that the present challenges faced by a CIO will also continue over the years and these include: Business Process Transformation, Innovating the enterprise, Deliver the best with the optimal resources, Team Engagement, Building service orientation and improving on service deliveries provided by and through IT.
CIOL: How far have you come as regards adopting 'Green IT technologies'?
MV: Our company is a beginner in this front and we are taking it forward without a conscious effort.
CIOL: What will be the IT budget for the new fiscal year? What is the growth rate over last year?
MV: I would prefer not to respond to this question. But can only indicate that it runs in crores each year.
CIOL: Do you feel the amount allocated for IT is sufficient if yes why? If not why not? How much should you be spending?
MV: I can do with more funds. Having said that we have been very decent in allocating budget for IT, when there are enough justifications for the investment.
CIOL: Has the prices of the IT products (hardware/software) been on the decline due to the current stronger rupee against the US dollar in 2007?
MV: Do they. Don't think so; not because of a stronger rupee. In fact, India should be benefited as biggies turn more towards India as the global spend on IT could shrink.
CIOL: Since the rupee is growing stronger against the dollarin 2007, don't you thing it is the right time to purchase IT products both hardware/software?
MV: It all depends on the business benefits. Rupee appreciation against dollar can't be a critical determining factor; not at least in our case.
CIOL: How big is the IT staff in your organization?
MV: We have atleast 48 working in our department.
CIOL: What are the major challenges faced by a CIO?
Muthukumar V: I feel that the present challenges faced by a CIO in the areas of Business Process Transformation, Innovating the enterprise, Deliver the best with the optimal resources, Team Engagement, Building service orientation and Improving on service deliveries provided by and through IT.
CIOL: Does your organization link IT budget with the company's performance/growth? If yes please elaborate?
MV: Moser Baer has no such link where in the company's IT budget is linked to the performance of the firm.
CIOL: Can you cite any specific areas where IT has come up as an accomplishment in your stint as a CIO?
MV: We have tried to leverage the ERP utilization by bringing in more processes and controls within the ERP frame work. These are done either by exploiting the existing functionality that was not implemented or by building functionality within and around the ERP. We have ensured that the investment that we had done in the ERP and other application architecture is fully exploited. We have supported the growth of the business both organically (in terms of volume growth) as well as in-organically (additional business coverage like M&ES, ITCE, Entertainment and PV).
CIOL: Going forward, what are the challenges that you foresee?
MV: I feel that the present challenges faced by a CIO will also continue over the years and these include: Business Process Transformation, Innovating the enterprise, Deliver the best with the optimal resources, Team Engagement, Building service orientation and improving on service deliveries provided by and through IT.
CIOL: How far have you come as regards adopting 'Green IT technologies'?
MV: Our company is a beginner in this front and we are taking it forward without a conscious effort.
CIOL: What will be the IT budget for the new fiscal year? What is the growth rate over last year?
MV: I would prefer not to respond to this question. But can only indicate that it runs in crores each year.
CIOL: Do you feel the amount allocated for IT is sufficient if yes why? If not why not? How much should you be spending?
MV: I can do with more funds. Having said that we have been very decent in allocating budget for IT, when there are enough justifications for the investment.
CIOL: Has the prices of the IT products (hardware/software) been on the decline due to the current stronger rupee against the US dollar in 2007?
MV: Do they. Don't think so; not because of a stronger rupee. In fact, India should be benefited as biggies turn more towards India as the global spend on IT could shrink.
CIOL: Since the rupee is growing stronger against the dollarin 2007, don't you thing it is the right time to purchase IT products both hardware/software?
MV: It all depends on the business benefits. Rupee appreciation against dollar can't be a critical determining factor; not at least in our case.
CIOL: How big is the IT staff in your organization?
MV: We have atleast 48 working in our department.
ERP SAP implemented to dispose off deadly chemicals
Gujarat Industries Power Company Ltd (GIPC), a leading company engaged in business of generation of electrical power has implemented ERP SAP that has helped in disposing off dead inventory of hazardous Neptha Chemical worth of Rs 0.5 crore in one month complying fully with all regulations. In an interview with Lt. Col. Shankar Gurkha, Chief Manager – IT of GIPC talked to Manu Sharma of CIOL Bureau about his achievements as a CIO and what he foresee as the major challenges in the coming years.
CIOL: What are the major challenges faced by a CIO?
Shankar Gurkha: Some of the major challenges faced by a CIO include:
* Aligning IT with business
* Business process improvements
* Create robust integrated IT platform enabling business
CIOL: Does your organization link IT budget with the company's performance/growth? If yes please elaborate?
SG: Yes. However the formal system is now being put in place.
CIOL: Can you cite any specific areas where IT has come up as an accomplishment in your stint as a CIO?
SG: The main accomplishment during my stint as a CIO include the ERP SAP implementations that has helped us in disposing off dead inventory of hazardous Neptha Chemical worth of Rs 0.5 crore in one month complying fully all regulations.
CIOL: Going forward, what are the challenges that you foresee?
SG: Deployment of cost effective IT solutions enabling business, Optimum utilization of existing IT assets.
CIOL: How far have you come as regards adopting 'Green IT technologies'?
SG: We are at an initial stage but are taking few steps in the next financial year.
CIOL: What will be the IT budget for the new fiscal year/ What is the growth rate over last year?
SG: Our budget for the next financial year will be about Rs 2.5 to 3 crore. That will be a 200 percent growth compared to the previous year.
CIOL: Name the top 5 items that you expect to spend on this fiscal year?
SC: Some of the top items we expect to spend our budget include:
* Upgrade and enhancement of ERP SAP,
* Enterprise Document Management Sys,
* Unified Communications,
* DR Plan
* Green IT.
CIOL: Do you feel the amount allocated for IT is sufficient if yes why? If not why not? How much should you be spending?
SG: The amount allocated for IT is sufficient for projects as planned.
CIOL: Has the prices of the IT products (hardware/software) been on the decline due to the current stronger rupee against the US dollar (2007)?
SG: Yes, It has somewhat declined due to the current stronger rupee against the US dollar.
CIOL: Since the rupee is growing stronger against the dollar (In 2007), don't you thing it is the right time to purchase IT products both hardware/software?
SG: Yes, If found useful for the organization.
CIOL: How big is the IT staff in your organization?
SG: We presently have a team of 20 in our organization.
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