India Leads APAC In IT Budget Expansion: Forrester

India leads the APAC region in terms of budget expansion ahead of China, as per a new report by Forrester Research, The share of organisations increasing their IT budgets by more than 10% is especially high in India (19%), followed by China (14%). However, as a share of revenue, India and China will spend the least in the region on IT: 3.0% and 1.4% respectively.

“Indian organisations planned to expand their IT spending at faster rates than their regional peers at the beginning of the year,” says 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 adds.

Overall, less than half (45%) of APAC organisations will increase their IT spending in 2013, and almost one-quarter (21%) will reduce their IT capital spending. The report further highlights that APAC’s IT budgets for 2013 seem to be doing better than the rest of the world though not leading by big numbers,. It states that although 18% of organisations in the region will increase their IT spending by 7% or more in 2013, most CIOs are coming under far more budget pressures than in previous years.

Overall, less than half (45%) of APAC organisations will increase their IT spending in 2013, and almost one-quarter (21%) 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 organisations increasing their IT budgets by more than 10% is especially high in India (19%), followed by China (14%).

APAC CIOs now directly control less than 60% of enterprise IT spending. IT groups in APAC account for 58% of IT purchases in 2012 — down from 2010, when they purchased 74% of their organisation’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.

Consistent with the pressures CIOs face, the research findings show that the top two technology initiatives prioritised by IT departments across APAC are budgetary related: 54% cite ‘improving budget delivery performance’ as a priority, while 52% cite ‘improving IT budget performance’. In comparison, ‘data and analytics to improve business outcomes’ ranks as business leaders’ top IT priority for 2013, while it came in third for IT leaders. More importantly, the top reason that business leaders are spending more on technology is because they believe that it’s too important for the business not to be involved.

Interestingly, the regional story in APAC has two distinct categories that break along the fault line between emerging and developed markets.

The survey was fielded more than 1,400 IT and business decision-makers in the APAC region about their investment intentions for IT budgets in 2013. Based on the above findings, Forrester advises CIOs to adapt to the new business-powered budget reality to be in a position for success.