'IT depts must become business-savvy'

PHOTO: 'IT depts must become business-savvy'

SINGAPORE - Budgets at Singapore companies for computer hardware, software, services and maintenance are rising but at a snail's space.

On average, they will grow only at about 5.8 per cent of a firm's total revenue this year, said Forrester Research in its report on information technology budgets and priorities for chief information officers (CIOs) in the Asia-Pacific region.

But this is faster than several other Asian countries, with China at just 1.4 per cent, Indonesia at 4.2 per cent and Japan at 4.5 per cent. Australia and New Zealand are higher at 6 per cent. Still, this is not necessarily the full picture in terms of IT spending at companies as individual departments may have their own projects.

The control CIOs exercise over IT budgets is being eroded as other departments such as marketing and engineering embark on their own IT projects, Forrester said

Forrester research director Dane Anderson told The Straits Times: "CIOs prioritise the way IT is rolled out company-wide and the cost of new equipment, software and services, while senior corporate executives in charge of business operations are looking at using technology to get data and analytics to improve their businesses and operations."

Department bosses tend to need better IT technology urgently, and to get their projects approved by IT departments takes time and the projects are out of their control, he added.

As a result, these business heads tend to embark on their own IT projects, especially those that help meet sales numbers or get new customers.

"So CIOs and corporate executives are on a collision course. Many business executives... are reorganising their departments and retraining their employees so that they know how to extract greater value from technology," said Mr Anderson.

Forrester's report showed that in the Asia-Pacific region, CIOs directly controlled less than 60 per cent of corporate IT spending last year, while corporate executives controlled about 33 per cent.

CIOs interviewed by The Straits Times said that much is expected of them, as the senior management often expects more to be done with less.

But IT departments can stay relevant by becoming more business-savvy, said Mr Francis Glen, vice-president and head of group IT at Global Properties Logistics.

"You need to spend more time with other management colleagues, and meet customers and partners. Only then can business leaders from marketing, production and other departments learn to trust their IT counterparts and understand that the IT people can also contribute ideas (for) business expansion and new revenue channels," said Mr Glen.

But the IT department must always control the technology infrastructure, said Mr Steve Lee, CIO and senior vice-president (technology) for Changi Airport. Centralising the technology infrastructure makes business sense. If each unit buys its own equipment, then issues of IT connectivity and interoperability will arise, he said.

"Duplication can arise, which will lead costs to spiral. The balance is that CIOs must become partners of the business units; only then can we provide competitive advantage to the business."

To remain relevant to a corporation's business, the IT department must update itself on the latest technologies and business trends, said Mr Alvin Ong, CIO of Khoo Teck Puat Hospital.

"An IT team that is always learning, flexible in how it rolls out its projects and adaptable to business needs will know how to keep costs down as well as help other departments be more effective and productive," he said.


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