NEWS: Selective ICT Spending Ahead

ENTERPRISES this year are expected to take a cautious approach towards spending on ICT applications which have unclear or intangible return on investment (ROI).

Shukla expects hosted UC, hosted contact centres, managed UC services and managed security services to be in demand this year.

Frost & Sullivan’s industry manager Shivanu Shukla said enterprises will be looking at spend-to-save and focus on how technology can reduce costs and optimise resources.

According to him, among key technologies for enterprises this year are conferencing and collaboration applications, self-service applications, hosted/managed services and software-

as-a-service.

“The current economic crisis is shifting CIO (chief information officer) priorities to ROI. Preserving cash within the business is a

priority for most enterprises. Many will take a cautious approach towards spending and need to justify the investment in quantifiable measures.

“Video conferencing, Web conferencing and Web collaboration have a tangible ROI that can be measured in terms of savings on travel costs with the use of these applications. A solid business case can be made to justify investments in such technologies,” he said.

Many enterprises that have already imposed a ban on overseas travel unless it is customer-facing or critically important to the business, are expected to look at video-conferencing solutions on the back of such changing policies.

Meanwhile, self-service applications such as voice portals with speech applications are set to improve customer experience and reduce costs.

“Current times call for greater emphasis on the customer. During times like this, certain companies will succeed while others will find it hard to survive. The ability of enterprises to be close to their customers and provide a good experience will ensure that the business will grow and be sustained. With today’s improving technology, self-service applications can offer personalised customer experience and better customer retention,” Shukla said.

He noted that the contact centre will also face challenges in reducing costs this year.

“Many businesses in the growth markets of the Asia-Pacific such as India, China and Malaysia have been enjoying strong growth in customer base, leading to an increase in call volumes, which calls for more agents and increased costs. Self-service applications such as interactive voice responses and voice portals will be considered to manage this growth and reduce operational costs and transfer call volumes from live agents to self-service,” he said.

Hosted unified communications, hosted contact centres, managed UC services and managed security services are expected to be in demand as enterprises are under pressure to preserve cash.

“The current credit crisis is putting more pressure on businesses to keep cash reserves rather than heavy capital expenditure on IT. So, while CIOs understand the potential benefits of emerging technologies, the high upfront cost is a big deterrent to adoption. This is driving demand for hosted and managed services, which have an operating expenditure model with utility-based pricing or a fixed rate per month,” Shukla said.

He pointed out that the hosted model gives customers a chance to try out new technologies and see the benefits to their business without making a significant capital investment. Once the customer is convinced that the technology is of value to the business, they can take a decision on whether to continue on a hosted model or invest in an on-premise solution.

“A big deterrent to adoption of hosted offerings has been limited bandwidth and high bandwidth costs. On both fronts, improvements are expected, which, in turn, will drive the adoption of hosted services,” Shukla said.