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Gartner: Asia Pacific IT spending lags behind Nth America

Gartner: Asia Pacific IT spending lags behind Nth America

Spend only 1.4 percent of revenue

Organisations in the Asia Pacific are spending only about half as much on IT operations as their North American counterparts, according to the results of Gartner's latest Asia Pacific IT spending and staffing survey.

IT spending in the region is only 1.4 percent of revenue compared to 2.6 percent in the US.

As a relatively mature market, Australia leads the Asia Pacific region with an average IT operating budget of 2.1 percent of revenue, compared to a low of 1.2 percent in Malaysia and South Korea.

However, spending on IT capital varied from a high of 1.7 percent in India to a low of 0.8 percent in Australia, compared with 1.2 percent in North America.

High IT capital spending in the booming economies in Asia is consistent with other evidence, which indicates increased investment in IT to cope with growth.

Australian organisations spent more on staff as a percentage of the IT budget than most other Asia Pacific countries, second only to South Korea.

However, the average number of IT staff employed by Australian organisations is lower than all other Asia Pacific countries surveyed, except Singapore.

While differing wage rates explain some of these variations, it also reflects the differing IT portfolios in each country, according to John Roberts, Gartner vice president.

Roberts said Asia Pacific IT organisations must take advantage of opportunities to apply good practices from experiences elsewhere around the world, because in general they lag in IT adoption.

"There is no simple answer to the question 'how big should my IT budget be," Roberts said.

"However, there is clearly an opportunity for IT to deliver greater value to the business by improving business processes and enhancing operational efficiency.

"This survey will help business and IT managers compare their IT spending with that of peer organisations, but more detailed benchmarking is needed to compare not only spending but also the efficiency of your IT operations."

Roberts said there were significant country variations in IT spending, as Asia Pacific is not a homogeneous region.

"For example, labour rates in Asia are still relatively low compared to Australia, so in countries like China or Malaysia there isn't the same drive to automate," he said.

"We see ERP implementations there happening nearly 10 years after North America. With higher labour rates in Australia, this country tends to be an earlier adopter of technologies, mainly because automation delivers cost savings."

In general, organisations in Asia Pacific see themselves as far more conservative in IT adoption (35 to 50 percent range) compared with North America (14 percent).

Australian IT departments rated themselves as more aggressive and less conservative than Singapore.


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