Spending big on ICT.

Just want to share with you guys this article “Leveraging on ICT to move forward”; taken from TechEdu Section (News Strait Times). This article is quite interesting and it’s also related with problems that have been raised in our class.

Information and Communication technology (ICT) spending among the small and medium-sized enterprise (SME) community is on the rise worldwide, taking an increasingly bigger share of the overall enterprise technology spending. According to resent research figures, total ICT spending by SMEs worldwide is about US$533 billion (RM1.86 trillion). In the Asia-Pacific and Japan, The figure stands at US$210 billion. Is this bullish trend also witnessed in Malaysia? What drives local SMEs to spend big on ICT?

For me, enterprises in Malaysia spend too much on ICT, especially in infrastructure. Businesses should see IT as a tool to generate greater value and better returns to the company. Nowadays, technology move so fast, if we didn't follow this trend we will be left far behind and sometime the cost to catch-up is very high. Nevertheless, it is a reality that businesses have face today, resulted by the amount of pressure from strong competition.

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Leveraging on ICT to move forward
By: Shyla Sangaran
TechEdu, News Strait Times
July 19, 2007

Information and communications technology (ICT) has become a crucial element in driving local small and medium-sized enterprise (SMEs) forward. In the words of Raju Chellam, vice president of market intelligent agency Access Markets International Partners Sdn Bhd, ICT is a single differentiator to make or break a company.

“Everyone wants to be the next Google. SMEs across the globe have one very big, common ambition, and they are using ICT as an enabler.”

According to Raju, globalization has made the business world more competitive, so investment in ICT is crucial for SMEs to become more efficient and innovative, and respond to market changes faster.

“Local SMEs are beginning to realize that they need to think beyond their ‘nose’ to be creative. Most are aware that if they are not taking advantage of ICT, the Internet, etc, someone else will take their customers away,” he said.

Figures by research firm IDC do reflect the local SME community moving forward with ICT. Last year, total ICT spending by SMEs was about US$2.5 billion *RM8.7 billion), excluding Government, education and consumer spending.

According to Raju, ICT spending in this sector is largely confined to computerizing the work environment and automating the front and back-office operations.

“Many SMEs have a good Web site, but it is not enabled for e-commerce. This is a shame as the Web site will just be another advertisement display on the Internet. If you fail to use your Web site wisely, your business is basically considered dead,” he pointed out.

Raju added that there is still lack of awareness on computer security and network protection system implementation among SMEs.

“To become a viable global player, it is important to build a secure ICT system, to attain the trust if customers and partners in an online transaction environment.”

By not taking computer security seriously, it is not only SMEs who will face difficulties, but also other parties in the ecosystem.

“The entire partner ecosystem can become vulnerable to cyber attacks, which can cost serous damage and losses,” Raju explained.

Meanwhile, IDC’s vice president, consulting and partnering, SME research Asia-Pacific Walter Lee said in Malaysia tech spending among SMEs can be segmented based on the number of employees such as one to 99, 100 to 499, 500 to 999 and above 1,000.

There are also other proxies used to demonstrate SME ICT spending, including PC demographics, networking demographics, local area network, intra-office networking and inter-office networking.

In Malaysia, SMEs are mostly spending on ICT implementation (38.5 per cent) such as buying applications and system architecture, and maintenance and support (21.1 per cent). Typically, they will invest in bundled packages.

Another area where SMEs are increasing their spending is enterprise mobile such as mobile email. According to Lee, the biggest concerns that most SMEs have are business continuity and availability. Other areas include software security, piracy and the need for faster deployment of applications.

IDC predicts that software as a service will be the next business opportunity for SMEs.
“This means that SMEs have started looking at how they can outsource their IT system without worrying about maintaining their internal IT system and focus on their core business instead,” Lee said.

Indeed, SMEs have shown tremendous shift on how to leverage on ICT, making them spend aggressively. The emergence of a digital economy has certainly pushed the smaller players to take advantage of ICT to become competitive in the marketplace.