Both the public and private sectors in New Zealand are expected to continue to spend significantly on external IT Services, according to a report from market research firm IDC.
The firm expects that the ov
erall market for IT services spend is forecast to reach NZD3.3bn in 2014, representing a CAGR of 3.8% over the coming five years. Outsourcing alone, represents 47% of the IT services spend in 2010.
According to the report ‘New Zealand IT Services 2010 – 2014 Forecast & Analysis’, transformation and upgrade projects remain on the cards, as many organisations aim to achieve higher levels of productivity and decrease operational spending.
Rasika Versleijen-Pradhan, senior services analyst for New Zealand business enablement: IT services at IDC, said: It won’t be an easy ride, while the New Zealand economy has certainly showed signs of improvement through increased consumer and business confidence, any certainty of a full market rebound in the short-term looks optimistic.
“Many organisations are still short on capital and struggling with cash-flow issues, growth needs to be financed and with depleted resources it remains a challenge for these organisations to obtain finance.”
The research firm advises that those organisations seeking to embark on projects that encompass new technologies and thinking around innovative approaches to business models, such as the integration of cloud computing, and convergence of wireless data and telephony will continue to engage with external IT service providers, as their own internal resources will limit the scope.
IDC expects external advice in the key early project stages of cloud strategy development, and transitioning of legacy systems to cloud environments will drive growth of IT consulting services.
Versleijen-Pradhan added: “Organisations need to make decisions in terms of where to invest in IT, and if the business case doesn’t yield an immediate ROI, it is hard to sell to the Board, it’s about linking IT contracts to bottom-line performance.
