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Is investing in IT really worth it?

Nurdianah Md Nur | Oct. 4, 2013
Global head of innovation at Xchanging advises organisations to invest in IT according to their needs and capacity in order to reap the benefits.

Mani Gopalaratnam, the global head of innovation at Xchanging
Mani Gopalaratnam, the global head of innovation at Xchanging

It might be tempting to implement every new relevant technology available in the market to gain a competitive edge. However, organisations should understand that investment in IT does not provide instant results in terms of cost savings or a better bottom line. It is thus vital to have a long-term plan for IT implementation. Mani Gopalaratnam, the global head of innovation at Xchanging, shares his views on how enterprises in Asia should leverage technology to benefit their businesses. Xchanging provides business processing, technology and procurement services internationally for customers across multiple industries.

In what way can businesses in Asia invest in IT for a competitive difference, given that IT spending is set to rise?
IT investment is often perceived as an expensive and time consuming process that only mature businesses can afford, but that is not necessarily true.

There are many options on cost-effective solutions for business IT needs such as Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS). According to a recent study by Gartner, IT investment is set to grow in 2014 with new software sales, with SaaS and virtualisation infrastructure software driving this growth. Traditionally, software and platforms were included in a full suite of services that may not be relevant for the organisation. Investing in SaaS or PaaS gives organisations the flexibility to choose only services they require and optimise IT spending.

For example, data analytics have been praised for boosting innovation by bringing collective wisdom to propagate and generate ideas. Specifically, big data has driven up cloud computing adoption. How much do you agree in investing in IT for it? How important is it for companies to leverage big data analysis for insights beneficial for their businesses?
Cloud computing is a good investment for organisations with limited resources and skill shortages, such as small to medium-sized businesses (SMBs). Cloud adoption allows SMBs to consume services as necessary without having to pay for maintaining an on-site IT infrastructure. 

Established organisations are able to use big data analytics effectively because they have the necessary resources to make sense of the data and extract relevant information for valuable insights. This enables decision makers to review their strategy and analyse their existing data sets for relevant information to make real time decisions. Small to medium businesses that do not have the capacity for big data analytics should consider SaaS as an inexpensive alternative to extract useful information.

How should companies judge return-on-investment when investing in IT?
Senior IT executives and managers in organisations should first look at IT as an enabler in business processes, and not a separate function. It is crucial for the organisation's leaders to have an integrated perspective when it comes to IT spending and implementation. They need to base return on investment on efficiency of business processes as a result of the IT implementation and not on the cost alone.


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