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Investing in Cloud not enough, real work begins now

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Preeti
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MUMBAI, INDIA: Cloud computing, mobility and unified communication tools are the driving forces behind technology spending at present. It's a trend that's set to continue and one that's witnessing an ever-expanding set of choices. For decision-makers weighing up the options, it's no easy task.

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In Asia Pacific, this has particular significance because companies are investing more than their European counterparts, along with a greater proportion of their overall IT budgets, on such technology. Sadly, many will get it wrong and end up wasting their money.

The challenge for companies and other organizations is to maximize the return on their investment in new technologies. What's clear from new research by INSEAD, produced in collaboration with AT&T, is that investing in the latest technology alone will not propel forward a company's cloud, mobility and other communications capabilities.

The INSEAD research was based on a survey of interviews with senior executives from 225 companies doing business in Europe, Asia Pacific and North America. About a third of these companies were Asia Pacific-based multinationals (of which 34 per cent were from China; 27 per cent India; six per cent Australia; six per cent Japan; and six per cent Singapore), while global companies with a strong Asia presence, including Coca Cola and Procter & Gamble, were also surveyed.

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Business Enablers

The research identifies the key business enablers that, together with investments in these technologies, distinguish high-performing firms from the rest. Indeed a combination of these, effectively implemented, can increase the probability of the company becoming highly competitive to 72 per cent from 35 per cent.

So, what are the enablers? It starts with management. Senior managers in a company - the non IT people - need to be involved in ICT decisions from the start, and participate in decisions about technology investment. It may sound basic but it is surprising how, for many companies, the ICT department is literally and metaphorically far away from management. This means having a standardized and uniform ICT system, that can be aligned and accessible across all business processes like HR and procurement and data. Without that, investing in cloud services or mobile apps won't produce the desired results because they will be built on systems that don't work or aren't ready for them. The research reveals that companies with standardized digital platforms for systems data and processes have more than twice the chance of getting value out of their new investment in new technologies.

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These business enablers haven't changed much in the last 10-15 years. The most successful companies featured in the research have figured out that while technology may continue to change -these key business enablers remain relevant.

The research reveals that Asian companies will increase their investment in mobility as a percentage of the total ICT budget from 12 per cent in 2010 to 30 per cent by 2015, while investment in cloud will grow from 17 per cent to 31 per cent and investment in collaboration tools will increase from 18 per centto 26 per cent.

According to the research, the global ICT budget for the latest technologies is expected to grow significantly. Mobility is expected to increase to 24 per cent of the budget by 2015 from 14 per cent of the budget three years ago, with cloud-based services rising to 26 per cent from 11 per cent, and collaboration tools to 20 per cent from 16 per cent.

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Performance Measures

The INSEAD researchers looked at three key measures of performance: agility - the ability of a global enterprise to act quickly and effectively in response to a local opportunity or threat - business process performance and, organizational change and performance. By some distance, the most important measure is agility, something that chief information officers are under great pressure to deliver.

While acknowledging that it's primarily the responsibility of business leaders to get the most out of their ICT investments, it's clear that governments and law-makers have an important role to play in helping to create an environment that supports such investment.

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Harmonized policies and regulations towards data security and privacy are also required to help companies mature their digitized platforms more rapidly.

Access to talent was also cited in the research as an issue where governments could do more. Governments need to expand their work with universities and industries to ensure there are sufficient e-leaders to meet growing demand for highly skilled ICT professionals. The research found that in Asia there is a more ready supply of talent than in Europe and the US, but the competition for that talent is global, so no region can afford to be complacent.

(Bernard Yee is Vice President, AT&T Asia Pacific. The ideas and views expressed in this article are those of the author and do not necessarily represent the views of CyberMedia)

 

 

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