IT HAD been a good year for the IT industry until September, when the collapse of Lehman Brothers caused an economic winter around the world.
Up till that point, Singapore's IT industry had been doing well. Major public sector contracts like the SOE (Standard Operating Environment) were awarded while consumers were snapping up the iPhone 3G, netbooks and other flat panel monitors.
The industry emerged from 2007 registering a double-digit growth of 13.7 per cent and a revenue of $51.68billion.
How well Singapore's IT industry performed this year will only be known by February when the official numbers are released.
Certainly, events in the last four months will dampen the performance of the first half of the year.
So will the pace of growth for 2009. Analysts say recovery can take 18 to 24 months. In reality, few can see when the light at the end of the tunnel will finally shine through.
Businesses are already tightening their belts on IT projects. Technology initiated projects will also take a back seat.
However, it is not all gloom and doom. Opportunities still exist for chief information officers to show IT's effectiveness as well as for IT vendors to generate revenue.
Key to businesses is retaining customer loyalty and getting new customers. Companies should look at what more information they can harvest from their existing applications like customer relationship management (CRM) systems to help in customer retention and acquisition.
Businesses which do not have such applications should look into investing in one.
As businesses try to become more efficient, other technologies that have been on the back burner have become more important (see section below).
The focus this year will turn to technologies like green IT and virtualisation that will cut back on power usage and costs.
There will also be a faster and greater shift to carrying out IT activities on the Web as IT departments face budget cuts. IT managers will have to look for alternatives to provide online staff support and better customer service.
They will have to learn how to buy on-demand software from the Web on a needs basis rather than to pay upfront for an expensive program.
The new year will also see more acquisitions as local cash rich IT giants like ST Electronics hunt for technology-based companies that will add to their product and/or technology portfolio.
During these times, companies for sale will have lower price tags making them more affordable to acquire.
The economic chill will also test smaller IT firms here. The Infocomm Development Authority (IDA) will certainly try to provide financial aid so that they can weather the recession.
For consumers, their wallets will also freeze. Big ticket items like the 60-inch HDTV tagged at $3,000 and above will be harder to rationalise.
Most will postpone such purchases or look for more affordable alternatives.
Expect to see more promotions and bargains in the stores as IT and consumer electronic shops fight for the shrinking consumer dollar.
Meanwhile, Digital Life writers make their predictions for the different IT sectors in the new year over the next few articles.
Saving on IT
FOUR technologies have been identified by IT managers as the key focus for them today: Open source, green IT, virtualisation and new media.
These technologies can reduce costs, increase efficiency and productivity, and help with customer retention and acquisition which are key to business survival today.
Open source software
Licensing, support and maintenance costs are lower. While it has been around for several years, adoption here has been slow.
Part of the reason is affordability. Public sector IT coffers, for example, are deep. While those in charge are prudent with spending, there is really no urgent need to pare costs down to almost zero.
Times have changed and there could be more pressure on the public sector to cut costs.
Businesses which often take the cue from the public sector have also not adopted open source software.
While some issues like licensing and legal liabilities need to be resolved, open source will weigh in heavier with users this time round.
Green IT
Rising oil prices in 2007 led to higher electricity bills and increased concern over global warming. Technologies that will help companies reduce power usage like new cooling systems and hardware that will use less electricity will be in vogue next year.
Virtualisation
This is not a new concept. It is a simulation of hardware or system resources like storage and network systems. As digital data expands exponentially, the pressure to expand IT resources is ongoing.
Its adoption will impact bottom lines.
Cloud computing refers to IT-related capabilities like e-mail and storage that are provided as an online service. Its chief advantage is that cyberspace has infinite space which costs little to buy and maintain.
So businesses can run these capabilities at lower cost.
New media technologies
These include social networks like Facebook and blogs which are popular with consumers. However, businesses have been slow to adopt them because their use is more spontaneous, making it more challenging for IT managers to manage.
These technologies engender community building and collaboration which are useful to reach out to and retain customers.
This story was first published in The Straits Times Digital Life on 31 December 2008.
