Midsize firms mull increasing budget for IT systems upgrade

CEBU, Philippines - More than half of the midsize companies are planning to increase their information technology (IT) budgets over the next 12 to 18 months.

A report conducted by IBM on global IT budget of more than 2,000 midsize companies representing more than 20 countries, revealed that these companies are investing a wide range of priorities including analytics, cloud computing, collaboration, mobility and customer relationship solutions.       

The study entitled “Inside the Midmarket: A 2011 Perspective,” which was commissioned by IBM to KS&R Inc., also revealed that 70 percent of midsize companies are actively pursuing analytics technology to better understand their customers, make better decisions and become more efficient.

The growing adoption of cloud computing among midsize firms is also noted with two-thirds either planning or currently deploying cloud-based technologies to improve IT systems management while lowering costs.

About 53 percent of respondents expect their IT budgets to increase over the next 12 to 18 months, 31 percent expect they will remain unchanged and 16 percent think they will decrease or are unsure.

Most critical IT priorities of companies nowadays include security issues, customer relationship management, and analytics/information management.       

"The study shows that midsize companies are tackling a new set of opportunities to advance their role as engines of economic growth. When we spoke to midsize firms 18 months ago, most were focused on reducing costs and improving efficiencies. Today, the conversation is also about expanding their business, connecting with customers and gaining greater insights," said Ireen Catane, Country Manager for General Business, IBM Philippines.

The IBM survey findings are consistent with IDC’s Philippine Small and Medium-Sized Enterprise IT Buying Behavior and Adoption Plans 2010 report, which states that with economic prospects and business expectations looking up, most SMEs are now more than ever looking at IT as an essential tool to achieve longer-term business growth.

Whether in the form of social media technology adoption as a means to push their products and services, building more dynamic Web sites, reengineering back-office functions to become automated, or improving after-sales support through a sound IT and telephony system, SMEs are expected to put a lot of effort toward IT capacity building for longer-term strategic growth, the study said.

Comparisons between the current study and those from 2009 also reveal a shift from a predominant focus on cost control and efficiency to a greater emphasis on growth initiatives.

Today, 21 percent characterize their strategic mindset as 'efficiency and cost control', with the majority (79 percent) concentrating on customers, growth and innovation. In 2009, 53 percent characterized their company mindset as one of efficiency and cost control", with less than half (47 percent) focused on growth, innovation and customers. This change is reflected in the increased adoption of analytics and predictive technologies that have become more affordable and widely available for midsize companies

The study was conducted in the fourth quarter of 2010 to capture current and upcoming business and IT priorities and investment direction. (FREEMAN)