Lack Of Vision And Planning Prevent Organizations In Emerging Markets From Technology Leapfrogging

When I moved to India about two years ago, I arrived with my own expectations regarding emerging markets. One of them was that the lack of legacy IT applications and infrastructure would make these markets an ideal place for new technologies and delivery models like as-a-service to thrive. In other words, organizations in emerging markets would “leapfrog” to new technologies without going through some of the prior technology investments witnessed in developed markets. Unfortunately, the reality is not that simple.

One of the key takeaways of my recent reports (Australia, China, India Set The Pace For Asian IT Services and The Changing Face Of ASEAN IT Services — to be published in January 2012) is that most of the growth in emerging countries will come from traditional IT services such as ERP implementation, infrastructure deployment, and system integration. Against common belief, emerging services — including cloud and mobility — will represent less than 20% the total annual growth in emerging markets in 2015.

I see several reasons for this:

  • Lack of governance and planning. An IT department’s role is merely one of provider of applications and infrastructure, whose main objective is to react to business needs.
  • Lack of internal skills. Client organizations do not have the adequate skills internally to take on complex transformational projects involving new technologies such as virtualization, business analytics, and mobile enterprise application integration platforms.
  • Lack of IT services culture. Most client organizations in emerging markets leverage external skills to help them with basic tasks such as hardware maintenance and software deployment.
  • Weak technology ecosystem. The lack of a strong local technology ecosystem hinders the development and adoption of emerging offerings. India is — to some extent — an exception here.

This is rapidly changing as public and private organizations are pressured to transform. Globalization leading to intensifying competition, changing demographics, and omnipresence of new communication channels all compel companies to change the way they leverage business technologies. Recent surveys in these markets also show that business decision-makers will increasingly take a lead and push IT to be more aligned with their visions. And they will need strong IT services vendors to share the risk of such transformational projects.

Comments

as-a-service

Fred,

The issues you raise as to why emerging markets won't leapfrog are valid and probably apply to companies in the US as well. There is also a lack of knowledge on the part of non IT professionals and the lack of reliable internet services. Cloud companies that started in teh late 1990's in teh US ran into problems as the US infrastructure was not well developed. Cloud computing or -as-a-service computing will eventually overtake all other forms of IT service delivery due to the caost savings and improved reliability of the offering.

Rick Fallahee, CEO
www.novelaspect.com