SINGAPOREAN companies tend to explore emerging technologies faster than their peers in the region, according to a new study on IT adoption trends in South-east Asia by consulting firm Accenture.

However, a senior Accenture executive noted that many Singaporean companies do not realise that competition may come, not from neighbouring countries, but from regional giants like China.

Speaking to BizIT, Accenture's technology consulting head for South-east Asia, Andrew Weekes, pointed out: 'China can extract business value early from emerging technologies to shorten business cycle times by getting new products and services to market more quickly.'

The study by Accenture looked into how organisations in the South-east Asian countries of Singapore, Malaysia, Indonesia and Thailand are prioritising IT investment for innovation and growth.

Mr Weekes noted that increased information and communications technology (ICT) spending around the world is fuelling the forces of globalisation and innovation. 'Estimates put this spend at over US$3.1 trillion in 2006 and growing.'

In the Asia-Pacific region, IT spending growth continues to outpace the rest of the world with an annual compound growth rate of approximately 11 per cent. 'India and China are at the forefront in this spend with growth above 40 and 20 per cent annually. The South-east Asian market is also showing a healthy double digit growth,' he said. Mr Weekes, however, noted that total ICT spend is not the only indicator of growth. 'Many studies measure and report on information technology investment trends without examining the quality of the spend.'

The research report IT Investment: Performance and Priorities in South-east Asia's Major Economies, was compiled following in-depth interviews with 46 CIOs (chief information officers) and CTOs (chief technology officers) from South-east Asia's largest public and private sector organisations in Singapore, Malaysia, Indonesia and Thailand.

Mr Weekes said the report shows that Singaporean companies are 'middle of the road' today with regards to the percentage of effort they devote in running and fixing IT systems.

'The positive aspect is that Singapore CIOs have an extreme desire to move to more strategic initiatives in building new IT-enabled business capability . . . The challenge will be how to do this within constraints on IT budgets unless they (the CIOs) can reduce the cost 'of keeping the lights on' and freeing up IT dollars for more strategic IT spend.'

The Accenture official noted that Singapore is unique among the four nations surveyed in the region. 'Its small size gives it an advantage in pushing forward an aggressive IT agenda. The country has turned IT into a national competitive advantage, leading the way in South-east Asia with a highly advanced infrastructure, IT literate population and high penetration of wireless computing devices.'

However, the Singaporean CIOs face several key challenges. One of them is resource limitations. Despite a mature IT sector and emphasis on IT education, companies are competing for scarce IT skills, Mr Weekes noted.

CIOs in Singapore are also grappling with how to define enterprise IT architecture. Compared to other South-east Asian nations, (IT) architectures in Singapore are more complex and so, integrating processes and systems is an ongoing challenge, he said. 'CIOs must ensure businesses fully understand what IT can deliver.'

Mr Weekes noted that while the CIO mandate is to deliver productivity and efficiency, deriving cost efficiency is paramount. CIOs must bring more value to the business and maintain their place as C-level executives, he noted.

Singaporean companies also see IT integration as a key area to tackle, and view SOA (service oriented architecture) as a potential enabler for this. SOA refers to an approach to IT where business software is organised in a modular fashion so that common functions can be used interchangeably by different departments internally and by external business partners as well.

'The challenge will come in realising that the SOA vision is much bigger then doing technical services that we see today, and has a much broader impact to the entire IT organisation,' Mr Weekes said.

Overall, the survey notes that the Asean region, along with the countries like China, are well positioned not to use only labour cost arbitrage as a way to compete on the global scene. 'They don't have the legacy of the West, and hence can innovate to leapfrog the competition during this globalisation period,' Mr Weekes said.

Another point noted by the report is that operational IT function delivery is still lacking in general throughout the Asean region. 'In some countries, like Indonesia, old governance models are still in place with IT being seen and operated as a cost centre and not a strategic weapon.'

This article first appeared in BT on June 11, 2007