Industry analyst XMG Global recently released their 2010 predictions for the Asia Pacific region. XMG analysts resolutely believe that the uncertainty of 2009 has intensified the pressure for demonstrative value of all corporate assets and partnerships. With a back-to-basics focus, priorities for the top decision makers of ICT in Asia Pacific are concentrating on the value and efficacy of ICT.

1. Top Concerns of Asia Pacific CIOs Heading into 2010 indicate predispositions toward maximizing value on previously purchased applications, systems and infrastructure. In the order of priority, the top concerns of ICT executives heading into the new year are:

• Demonstrating value of ICT investments.
• Delivering process management and operations excellence programs.
• Measuring efficiency and effectiveness of ICT.
• Defending core and non-discretionary costs.
• Improving management decision making.

2. Skills shortages will return by 2nd Quarter 2010

Recent market downturn, announced layoffs, and unemployment filings have lulled many organizations into falsely believing the workforce shortage no longer continue to be a problem. XMG forecasts the job market to keep getting better as some major markets such as the financial, banking, utilities and service providers are seeing increased business activity. XMG is confident others will follow shortly since it is not a uniform recovery. Intelligent insights, unique recruitment and retention strategies will be required to address the skills shortage imperative in the face of rapidly changing labor market conditions starting 1st quarter 2010.

3. Pointing a Finger at a Phantom: Social Networking Sites’ Interference with Productivity

XMG studies have shown the number of hours expended per employee on social networking sites, namely Facebook and Twitter, in the workplace is increasing significantly. Many organizations are underestimating the impact of these sites to total productivity. Behavioral indicators in the study points clearly that social networking will become a primary means of personal and business communication thru various channels namely, the office workstations, laptops or mobile phones. Therefore, social networking will not go away nor could it be barred without affecting corporate morale. In response, forward looking organizations will introduce new policies that are mindful of different cultural expectations to help curtail workforce productivity drop.

4. ICT for Economic Development

The inclusion of ICT in multilateral projects is a response to international development organizations’ strategy towards improving livelihoods and greater cooperation among regions and countries. Like roads, ICT is undeniably mainstream essential infrastructure. Sharing of information and best practices in development projects contribute to improve capacity building programs and increase sustainability. Developing countries will earnestly participate in this collaboration to enhance social and economic viability. Cross-government collaboration will be mandatory for economic development. Efforts in bridging digital divide between rural and urban areas will continue to transpire – bringing in more opportunities to the local economy and workforce.

5. SI Firms will Struggle; Fade into Obscurity

As a decade comes to close, system integration firms still focusing on ‘integration’ and ‘implementation’, instead of ‘operations excellence’ and ‘transformation’, will find themselves extinct. The global economic crisis has caused a significant decline in overall ICT revenue, but XMG market indicators show growth in user preference for process outsourcing to fix problems. This trend will continue well beyond 2010 as organizational objectives look beyond cost savings to include continuous improvements and transformations.

6. Outsourcing Industry Fully Charged After the Storm

Outsourcing will present its full potential once more in 2010 - however this time being more than a cost saving measure, but a genuine business model to increase efficiency and improve profitability. In the face of global competition, governments of major outsourcing destinations will formulate new rounds of resolutions to improve business environments and promote new investment locations. XMG also considers significant increase in nearshore outsourcing as some companies exercise more vigilance on their investments. XMG forecasts the global outsourcing industry to corner US$412 billion in 2010 with India and China still leading the offshoring segment.

7. Offshore Captive Centers: a Waning Option

There has been a continuous decline of startups and stagnation among existing ones in the captive sphere for the past couple of years due mainly to high operating costs. The need for management focus and involvement for enhanced business integration also adds up to the pressure of sustaining quality services in captive operations. XMG expects a lot of transformation among captive players this year. With the scaling up of BPOs in the midst of economic downturn, more captives will venture on divestitures to recover losses and deficits. Their initial move in transitioning from pure into hybrid or shared captives with the aim of optimizing utilization and reducing cost is a significant indicator of this waning option of building up offshore captive centers.

8. Security Processes will take a much more Strategic Meaning

Demand for threat and vulnerability solutions stole the lime light in 2009 as criminals working the underground economy continue to find new and more vulnerabilities to exploit, despite heavy spending and safeguards. Unfortunately, XMG believes it is going to get worse in 2010 and more technology is not going to resolve it. Unlike as a few years back, enterprises and consumers now are much more aware on the whys and hows to protect themselves. Enterprises that can independently assess a higher level of maturity and understanding of security in their organizations will invest in strategic security processes focusing on formalizing risk and trust, with increasing attention to awareness, communication and policy.

9. Intensive Competition Awaits Telecom Giants

Whether or not there is tangible recovery of the global economy in 2010, XMG is confident that telecommunication industry globally will remain healthy and vibrant. Investment aggressiveness as well as management reorganization of telecommunication equipment vendors would display renewed competition this year and beyond. Industry players are expected to beeline in their usual frontline markets (North America and Asia) offering newly developed technologies (LTE, WiMAX) in their portfolio. XMG also anticipates various application innovations, operability arguments, and pricing strategies on smartphones as European handset makers prepare for head-to-head battle against their American counterparts.

10. More Telcos and Vendors to Loom in the Clouds

Telcos will continue to dominate cloud computing service – becoming its major driving force in the coming year. The recent launching of Orange’s cloud computing services, which was preceded, by AT&T’s Synaptic and Verizon’s CaaS early last year attests to this standing. As demand for managed services continue to soar, XMG anticipates an accelerating growth in independent vendors testing the waters on cloud computing. Emphasis on improving security features will be a top-of-mind among these players.

About XMG

Headquartered in Victoria, Canada, XMG provides unbiased and highly actionable IT research and advisory services to help companies become agile, adaptive and efficient in the use or marketing of information technology. XMG has established an extensive list of blue chip clients – a genuine testament of our Customer's faith in our capabilities and satisfaction with our people.

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