Across Asia Pacific (AP), expanding mobility support for employees, customers, and/or business partners will be the top strategic telecom priority for enterprises in 2013, surpassing other telecom priorities like performing network management and consolidating operations equipment, rationalizing/consolidating telecom/communications service providers, and moving communications applications to the cloud.
While enterprises will invest in a range of mobility products and services, there are five key areas in particular which will attract the most investment in 2013. Vendors need to focus on the solutions and engagement models that meet customers’ needs in these five areas and target the industries and countries where the demand will be greatest:
Business consulting services. Specifically for defining a formal enterprise mobility and/or BYOD program strategy, including devices, applications, data access, and provisioning. Moreover, AP organizations will likely need help in drafting compliance and legal policies related to enterprise mobility.
Telecom expense management solutions. This is one of the most critical telecom requirements for AP CIOs in 2013. Across the region, 50% to 60% of organizations pay the entire cost of voice and data services for company-supported Android and iOS phones and tablets. For BlackBerry phones, this proportion is nearly 70%.
Data from Forrester’s Forrsights Budgets and Priorities Tracker Survey, Q4 2012 highlights that a total of 53% of IT organizations interviewed in India plan to increase their software spending on mobile applications in 2013. Among all the countries, India ranks second only after Australia/New Zealand and considerably higher than the regional average:
It’s encouraging to see Indian CIOs start to give a high priority to mobility software spending, but our research shows that the majority of mobile application initiatives are skewed toward employees and BYOT (and, to some extent, partners) with little focus on mobile customer engagement. Forrester research findings indicate that mobile applications will be a more critical channel to reach consumer markets in Asia Pacific in the future compared to more developed western markets. This is especially true in India, where the population is younger (according to the UN, 27% of the population is between the ages of 15 and 29), the mobile Internet user base is growing at the rate of more than 30% annually, and sub-$100 smartphones are further fueling mobile Internet growth.
What It Means For CIOs:
Put customers at the center of your mobile strategy. If you’re not establishing the architectures and capabilities to reach these mobile customers now, you won’t be positioned for success three years from now. CIOs have an opportunity to lead their organizations by leveraging technology in strengthening customer relationships.
Data from the Forrsights Budgets and Priorities Tracker Survey, Q4 2012 highlights the increasing gap between CIOs and business decision-makers (BDMs) in India — a gap that originates in misaligned perspectives. The rapid rise of social media, cloud computing, and mobility in India has started to significantly affect how organizations do business in the country. Business leaders’ use of consumer technology has changed their expectations of how enterprise IT should be harnessed. They increasingly seek to use technology in innovative ways in order to gain a competitive edge and drive business growth. However, most CIOs are still caught in the old world of focusing exclusively on IT budgets and project delivery performance issues:
I recently spoke with a few CIOs in India to explore their views on the reasons behind this misalignment. When I shared data from the chart above and asked their opinions on the insights, some interesting findings that came out:
There are many “heads of IT” and few “business technology (BT) CIOs” in India. One CIO from a large auto manufacturing firm mentioned that a majority of CIOs in India are actually “IT heads” who think and act mainly from an IT perspective. Even worse, their thinking is generally very hardware-centric. This CIO’s opinion is in sync with my recent report highlighting the fact that Indian CIOs are at risk of losing business credibility (and eventually their jobs) if they do not improve their understanding of BT.
Thirty software product members of NASSCOM, the industry association for the IT BPO sector in India, announced that they would form a group to expand the software ecosystem in India: the Indian Software Product Industry Round Table, or iSPIRT. The key driver behind this development appears to be NASSCOM’s limited focus on software product companies in India. iSPIRT plans to:
Convert ideas into policy proposals to take to government stakeholders
Enable product startups to discuss issues through a dedicated platform (productnation.in)
Create awareness for the adoption of software products within the Indian SMB sector
Work with NASSCOM and other industry associations to provide a platform for product start-ups
The Asia Pacific (AP) growth engine did not fire on all cylinders in 2012, leading Forrester to revise its IT purchases growth forecasts for the year. While Australia, South Korea, and several ASEAN tech markets are showing continued solid growth, in other markets like China, India, Japan, Malaysia, and Vietnam, political leaders are struggling in the face of growing economic problems. My colleague Andy Bartels and I, with the help of Forrester’s AP analyst team, have recently published our revised IT purchase growth forecasts for 2013. Here are our key expectations by country:
2012’s slowdown in China will be short-lived. Despite a slowdown in 2012, China continues to attract intense vendor interest because of its size and potential for further growth. The expected government stimulus efforts in the country will offset factors such as weak demand from businesses and governments. The slowdown in 2012 (+9%) is therefore likely to be short-lived, with stronger growth resuming in 2013 (+10%).
India’s IT growth will remain slower than expected through 2014. 2012 (+7%) was a relatively lackluster year for the tech market in India. Worse than expected economic growth, combined with political gridlock on economic reforms, kept the tech market from reaching its full potential in 2012. While we expect the public sector to drive India’s IT spending growth, the impact will be limited through 2014 due to the parliamentary elections scheduled for that year.
The rapid rise of social media, cloud computing, and mobility in India has started to affect how organizations do business in the country. This is driving a fundamental shift in the CIO role as it moves from classic “plan, build, run” cycle management to a business-oriented, leadership-focused position. To gauge systems integrators’ (SIs’) readiness to support the changing CIO role, Forrester interviewed CIOs at 30 Indian companies and has just published a report on the same. For the purposes of this report, “Indian SIs” includes SIs headquartered in India and multinational SIs doing business in the country. We conducted interviews with CIOs in the form of open discussions; our aim was to determine CIOs’ opinions about their SIs, including how effectively those SIs are shifting to a more value-added, business-oriented engagement model. These interviews yielded some grim findings, as CIOs believe that SIs:
Don’t understand the business requirements of the CIO role. Only 28% of CIOs think that SIs understand their changing business requirements, while 70% of CIOs think that SIs focus too much on technology delivery.
Focus too much on upselling or cross-selling their products and solutions. SI teams, including account managers and consultants, usually focus more on promoting products and services; they have very little knowledge of what CIO and client organizations are looking for and don’t care to learn.
Lack the tools and templates to define the business value of emerging technologies. Most of the CIOs indicated that they believe that SIs are not able to define the business value of emerging technologies.
Government reforms will not positively affect IT spending until 2014. Forrester estimates that India’s IT purchases will grow by 9.5% in local currency in 2013. The Indian government is taking steps to reform initiatives and stimulate the economy in the wake of faltering economic growth caused by inflation as well as corruption, political gridlock, and lack of business investment. However, Forrester expects corporate spending to remain cautious ahead of parliamentary elections scheduled for 2014.
Increasing customer expectations will drive software spending. 94% of the Indian organizations surveyed in our Forrsights Budgets and Priorities Survey, Q2 2012 cited the need to improve their product and services capabilities to meet increasing customer expectations as their top business priority. We therefore expect increased investments in CRM, customer communications management (email marketing software, SMS communication software, etc.), and business process management tool solutions.
Forrester held its first CIO Summit in New Delhi, India on September 26, 2012. The theme of the event was “From IT To Business Technology (BT) And Beyond.” There were more than 100 attendees, and it was truly a memorable experience interacting with everyone. By the end of the day, I had received encouraging responses from attendees, as many CIOs expressed their willingness to work with Forrester. They found that no other research firm focuses on understanding how changing customer expectations affect what the business needs from them or helps them make better decisions to become successful and influential leaders. We had a great mix of analyst and CIO presentations, and the panel discussion on “Taking Your First Business Technology Steps” with our guest CIO speakers was complete bliss.
The key takeaways from the summit:
· IT/business alignment doesn’t necessarily equate to success. The consumerization of IT and fast-changing business dynamics make it challenging for CIOs to continue to align their IT organizations with the business. The reality in today’s world is that IT must become an integral part of the business and CIOs need to develop their IT strategy in conjunction with business leaders.
· Disrupt or be ready to get disrupted. According to Forrester’sForrsights Budgets and Priorities Tracker Survey, Q2 2012,customer expectations are the top concern among business decision-makers in Asia Pacific. Today, customers are redefining differentiation for organizations in the age of the customer and are setting the stage for rapid digital disruption.
At last week’s India analyst briefing, IBM outlined urbanization as a key factor driving “Smarter Cities” initiatives in India.
IBM expects India to invest about $1.2 trillion over the next 20 years in areas like transportation, energy, and public security. The second phase of the Jawaharlal Nehru National Urban Renewal Mission (JnNURM), which covers $40 billion in infrastructure-related projects, will play a key role in improving the country’s infrastructure capacity to support urbanization over the next five years. IBM is currently working on approximately 3,000 smart city projects globally; of those, about 30 pilot projects are from India.
About a year ago, I published a report on how cities are undergoing rapid transformation and creating massive opportunities for ICT vendors across Asia Pacific. Although the urbanization rate still stands at about 30% in India, it is growing fast. Also, an increasingly Internet-savvy population is demanding better citizen services. Indian state and city governments will make investments to build infrastructure on a large scale to meet the needs of their surging urban populations, creating opportunities for vendors. —
Despite the promise and opportunities that India provides for Smarter City initiatives, IBM has to deal with key challenges:
Infosys recently won a financial services systems integration deal from the Department of Post in the Ministry of Communications and IT of India worth INR 700 crore (US$126 million). In 2010, India’s Cabinet Committee on Economic Affairs approved India Post’s “IT modernization” project, which was divided into eight separate contracts worth a total of $337 million. With this deal, Infosys has won one of these eight contracts.
According to the terms of the contract, Infosys will commission both hardware and software – Intellectual Property (Finacle Core Banking and McCamish Insurance products) over India Post’s approximately 25,000 departmental offices over a period of 24 months. The contract, which is valid for seven years, includes managed services, application support, and infrastructure operations. More details about the deal can be found here.
Let’s look at what this deal means to Infosys and to India Post: