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India leads APAC in IT Budget expansion: Forrester

IT budgets for 2013 in Asia Pacific are in better shape than
in the rest of the world, but not by much, according to a new report by
Forrester Research.

IT budgets for 2013 in Asia Pacific are in better shape than
in the rest of the world, but not by much, according to a new report by
Forrester Research.

Although 18 per cent of organizations in the region will
increase their IT spending by 7 per cent or more in 2013, most CIOs in Asia
Pacific are coming under far more budget pressures than in previous years.
Overall, less than half of Asia Pacific organizations will increase their IT
spending in 2013, and almost one-quarter (21 per cent) will reduce their IT
capital spending. The situation is less bleak in India as the country leads the
region in budget expansion, even ahead of China. The share of organizations
increasing their IT budgets by more than 10% is especially high in India (19
per cent).

As if slow budget growth weren’t enough, Indian CIOs are
starting from smaller bases than their peers in more developed markets. As a
share of revenue, India and China will spend the least in the region on IT: 3.0
per cent and 1.4 per cent respectively.

The share of organizations increasing their IT budgets by
more than 10 per cent is especially high in India (19 per cent), followed by
China (14 per cent). Economic conditions in India and China have worsened since
the survey was taken, so actual growth may be lower than expectations. The
survey was fielded more than 1,400 IT and business decision-makers in the Asia
Pacific region about their investment intentions for IT budgets in 2013.

Asia Pacific CIOs now
directly control less than 60 per cent of enterprise IT spending. IT groups in
Asia Pacific account for 58% of IT purchases in 2012 — down from 2010, when
they purchased 74 per cent of their organization’s IT. In contrast, Forrester’s
data shows that business leaders are often growing their IT spending at very
healthy rates even as CIOs deal with budget reductions. Business leaders
focused on business outcomes and innovation directly controlled 33% of regional
enterprise IT spending in 2012 — a share that is growing quickly.

“Indian organizations planned to expand their IT spending at
faster rates than their regional peers at the beginning of the year,” writes
Dane Anderson, Vice President, Research Director and Asia Pacific Manager at
Forrester Research. “However, the deteriorating economic conditions since then
have dampened some of their aggressive plans. In spite of the current pressures,
we expect Indian IT budgets to be among the fastest-growing in the world for
years to come,” he added.

By CIO Staff

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