The FINANCIAL — TOKYO, October 10, 2011 — A new CIO survey from International Data Corporation (IDC) Japan examines IT investment trends at 1,943 companies and organizations in the country.
The survey, conducted in April–May 2011, finds that corporate IT spending will, as a result of the earthquake, continue to contract in 2011. However, it also suggests that attitudes toward IT spending are bottoming out, a finding that is consistent with previous years' surveys.
When companies were asked whether they intended to increase or decrease FY2011 IT spending compared with the previous year, 23.8% responded "decrease," which was higher than the 12.7% that responded "increase." This result suggests continued caution toward IT spending and is clear evidence of the impact from the Great Eastern Japan Earthquake of March 2011. From previous CIO surveys, however, IDC Japan also finds that corporate attitudes toward IT spending are in the process of bottoming out over the medium term. The lowest point in recent surveys for decreased corporate IT spending plans came in 2009, after the global financial crisis. By contrast, ratios of increase and decrease this year are virtually unchanged from last year in spite of the earthquake.
Meanwhile, the earthquake has particularly raised corporate awareness in three areas: strengthening risk management, increasing backup centers, and reinforcing energy-efficient IT systems. Among large corporations, strengthening business continuity (BCP)/disaster recovery (DR) plans ranked second. The earthquake had a significant impact on corporate IT spending priorities. In previous years, challenging business environments produced other concerns, but a growing number of enterprises' BCP/DR-related spending has emerged as the single most important IT investment item. Indeed, this is already seen in IT spending plans. In the survey, 7.8% of CIOs listed "business continuity/disaster recovery" among the results achieved in IT spending in FY10, but that number increased to 12.4% in the FY11 plan.
The survey finds clear changes in corporate awareness on points such as business challenges and investment domains that are not attributable to the impact of the earthquake. These changes are likely to have significant influence on IT spending going forward. Takuya Uemura, research analyst, IT Services, IDC Japan states, "IT service vendors need to rethink how they provide services in light of the changes in corporate awareness since the earthquake and also the changes in business challenges that confront their customers. At the same time, they will also need to prepare for the coming recovery in IT spending and it will be important that they are positioned to attract investment in IT to leverage corporate growth, not just IT spending for cost-cutting purposes, which has been the trend for the past several years."
The IDC study, Japan CIO Survey 2011: Spending Trend of IT Services and Outsourcing, uses survey findings on corporate business/IT challenges, IT investment trends and IT sourcing initiatives, adaptation to globalization, and the influence of the Great Eastern Japan Earthquake to identify the challenges for CIOs and the use of IT services and outsourcing. It also analyzes the responses to be taken by IT service vendors.
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