By Amit Roy Choudhury

SINGAPORE companies will be spending US$6 billion on IT products and services this year, according to EMC.

Speaking to BizIT, EMC's Ron Goh said that the pace of spending will remain fairly conservative, registering a compound annual growth of about 3 per cent over the next five years.

'In this conservative environment for IT investment, cost control remains at the top of the agenda for IT departments and is ranked first on the list of priorities,' said Mr Goh, who is EMC's president for the South Asia region.

EMC commissioned IDC to conduct a survey with IT executives and the data comes from that study.

In this survey, 405 organisations from various industries in Singapore, Malaysia, the Philippines, Thailand and India were asked how they are managing corporate information amid a growing digital universe.

IDC projects that information created in the enterprise will grow by a factor of almost five, while total IT budgets and IT resources are barely growing at all.

'In addition, most companies have looked at their corporate information management strategy in a siloed manner and implemented solutions in a piecemeal fashion,' Mr Goh noted.

The difficulties and inefficiencies in integrating these disparate components occur at a time when these organisations are also forced to look at a more efficient approach to manage corporate information and reduce cost, yet increase service levels to lines of business, he added.

Among the five Asian nations, Singapore has the smallest percentage allocation of the total IT budget for information infrastructure components, Mr Goh noted.

The survey shows that as a percentage of total IT budget, companies in Singapore allocate the smallest percentage of IT budgets towards information infrastructure components (about 14 per cent). In contrast, companies in the Philippines allocate the most (about 22 per cent).

'At first glance, these results are surprising, as companies in more mature markets, such as Singapore, would be expected to spend a lot on information-related technologies,' Mr Goh noted.

However, he added, two factors could explain the results of this particular trend.

The first is that the data measures the percentage of total IT budget, not total monetary value.

'In other words, companies in more mature markets are most likely to have larger IT budgets and invest in a wider array of IT products and services than less mature countries. Therefore, the portion of the overall budget allocated to information infrastructure is less.'

Mr Goh added that the other factor is that in emerging markets such as the Philippines and Thailand, IT budgets are allocated towards classic IT infrastructure elements such as servers, storage and networking.

'Applications such as business intelligence, data mining, and disaster recovery/business continuity could be seen as more of a luxury or cutting-edge technology, and therefore less budget has been allocated to those types of solutions.'

The EMC official noted that given the fairly conservative environment for IT investment in Singapore, cost control remains at the top of the agenda for IT departments and is ranked first on the list of priorities.

'IT executives in Singapore noted that in both the short and the medium term, reducing costs and improving customer service will pose the biggest business challenges.'

He added that as the economic outlook improves, survey respondents from Singapore indicated that gaining market share and introducing new products and services into the market will emerge as larger challenges in the next two years.

'Deploying new strategic applications remain on the agenda, followed by a consolidation of applications,' Mr Goh noted.

The EMC official noted that in the survey, IDC identified three gaps in the corporate strategies for information management.

First of all, data security has been found to be missing from information strategies. Some 22 per cent of survey respondents indicated that they either had no data security policies, or only had distributed or ad hoc data security policies in place. Also, 23 per cent of companies surveyed had policies in place that only cover business critical information.

'Given that more and more companies are leveraging web technologies, the lack of a holistic security strategy increases risk in an intensifying online threat environment,' Mr Goh said.

The second point was that storage, back-up and recovery policies are inconsistent. 'While many companies back up information on servers, nearly half of IT executives surveyed had no solutions in place to store or back up company information located on employee PCs. Given that many employees today work remotely and are highly mobile, this is a disaster waiting to happen.'

Finally, the third gap in corporate strategies for information management, according to the IDC research, is insufficient disaster recovery strategies.

'When asked how well the organisation could cope with a disaster, slightly under a third (30 per cent) of executives surveyed said that their companies would experience total IT system failure, severe degradation in service or time delay for critical applications,' Mr Goh noted.

On the other hand, only 22 per cent said that they had systems in place to provide a seamless transition to a backup IT system that would have little impact on customer service levels.

'In today's challenging business environment, organisations cannot afford to take such chances on service levels or they risk falling behind the competition,' Mr Goh noted.

This article was first published in The Business Times.