Published on the 04/05/2011 | Written by iStart

iStart’s annual investment survey shows BI has jumped into the limelight among the ‘must-have’ applications in 2011 as business shines the crystal ball to track market changes in volatile times…

Capital investment in ICT in A/NZ is forecast to remain largely flat (+2.3%) in 2011, continuing a fairly resilient trend in recessionary times, albeit still recovering from a 23% drop in investment in 2009. The result equates to an estimated $12 million increase in revenue for the region’s ICT providers.

45% of organisations are looking to invest in business intelligence, reporting or performance management solutions – up from 32% expecting to invest in 2010. BI was seen as the second most pressing investment after infrastructure hardware (servers, network equipment etc).

Next on the list was mobile devices for management and staff above ERP & financial systems.

The 322 organisations responding to the survey represent a NZ$467 million share of Australasia’s estimated NZ$7 billion ICT investment market.

Uptake of cloud or “on demand” applications is expected to flatten in 2011 – which was a surprise (damn statistics) – probably reflecting an overall shift toward infrastructure investment which is still catching up on lower levels seen over 2009. The cloud is firmly in the mainstream however with 60 % of businesses running some form of cloud application. Perhaps, as IDC indicates also – see their article on 2011 predictions – spending on the cloud has been devolved to different departmental budgets.

The survey also indicates that the painful run for small business (<20 employees) may be reaching an end. After three years of declining investment in IT, an almost 20% increase is expected. The sentiment among respondents (large and small) is a strategy to focus only on necessary maintenance expenditure, and nil or minimal new investment. While there are several large projects being carried out, on the whole, most organisations remain in a holding pattern. Vendors will be looking forward to servicing pent-up demand when conditions improve and businesses are forced to upgrade.

It should also be noted that the Christchurch earthquake occurred only at the-tail end of the survey period, so the results do not significantly reflect its impact, which could be expected to provide a lift for the surviving IT support services in Christchurch, that is, if their services were invoiced.

Server and network infrastructure retains the top spot among technology investment options with 60% of companies planning some investment in 2011, while at the other end of the spectrum investment in specialist applications such as mapping/GIS, scanning/RFID and supply chain/demand management solutions remain low at 12-14%.

Mid-large business stumbles
The mid-large sector (200-500 employees) are signalling they are under some pressure with a 23% decline in investment forecast, dropping average spend to $806,000.

This followed an increase in 2010 when they were perhaps slightly more bullish about an upturn that did not eventuate.

General Manager of iStart, Hayden McCall, commented that the results would be heartening for BI vendors, but less encouraging for the rest of the sector. “BI has been on the up for some time but the jump in popularity was surprising.

We’ve been seeing case studies that indicate a strong return on quite small investments in BI, so it seems that business has recognised they can now get the right information at their fingertips.”

The results for cloud uptake defied some of the vendor hype. “It was surprising to see a flat result come through, however watching Christchurch (and other recent natural disasters) unfold has been a huge tick in the box for storing data and running applications in the cloud. We’re calling it the ‘cloud factor’ and it will be in behind most if not all investment decisions moving forward.

It’s becoming almost like a health check – ‘is yours a resilient cloud-based solution?’ – it’s a fundamental question.”

For those readers who are making investment decisions, The iStart research portals are the place to go with hundreds of case studies across A/NZ and buyers guides for the leading solution providers.

A big thanks to all those who responded to the survey. We have included a representative selection of your comments below…

Investment sentiments from the coal face…
‘$s are very tight and intent on keeping cost down’
(Aus CFO with 6-20 staff.)

‘Ageing hardware and shortage of storage’
(Aus IT Manager with 50-200 staff.)

‘Focus on costs, improved internal reporting capability’
(NZ CEO with 50-200 staff.)

‘Business needs is sometimes key factor in investment intentions’
(Aus Finance Manager with 200-500 staff.)

‘Business priorities and availability of limited resources affecting the current decisions’
(NZ IT Manager with 500+ staff.)

‘Capital budget is zero for this year so no major investments being contemplated’
(NZ IT Manager with 500+ staff.)

‘Influencers are: Cash flow!, security of cloud computing, speed of cloud’
(A/NZ Director with 1-5 staff.)

‘Cautious about capital outlays in 2011’
(Aus CEO with 6-20 staff.)

‘Pending HQ’s decision on centralising the software & hardware’
(Aus Finance Manager with 50-200 staff.)

‘Enabling a mobile workforce is a strategic agenda’
(Aus CIO with 200-500 staff.)

‘In process of converting large decentralised group to more standardised and centralised systems’
(NZ CFO with 200-500 staff.)

‘It is more about the technology meeting the needs now, whereas in the past the focus was sometimes on the technology’
(Aus IT Manager with 50-200 staff.)

‘Deferred investment impacting revenue as well as net margin’
(A/NZ CEO with 200-500 staff.)

‘Mostly replace IT as older units become redundant. Mobile sales force also dictate hardware to make job more efficient (ipads etc)’
(Aus Business Manager with 6-20 staff.)

‘Not interested in bleeding edge. Only looking at functionality that will make our team more efficient’
(NZ CEO with 1-5 staff.)

‘Key needs are: simplicity of use, user customisable and one-off price (no support requirement)’
(NZ Director with 6-20 staff.)

‘Times are tough! Have just upgraded core servers and upgraded ERP/Supply chain, now planning to upgrade financials’
(NZ IT Manager with 500+ staff.)

‘Use current platforms and continue business process improvements’
(NZ COO with 500+ staff.)

‘Investment choices based on true value not desirability’
(Aus IT Manager with 50-200 staff.)

‘We are currently looking at upgrading our network/systems infrastructure and implementing a robust DR solution’
(NZ IT Manager with 21-50 staff.)

And the winner is…

Congratulations to Eoin Keith – MD of EBS Business Solutions in Christchurch. Eoin provides advice to a range of businesses on ERP & HR solutions. Eoin is the new owner of a shiny new Blackberry Bold from RIM.

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