Business

Monday August 10, 2009

SMEs cutting ICT spending

By LEE KIAN SEONG


Group: But it will grow from next year

PETALING JAYA: The information communication technology (ICT) spending among small- and medium-sized enterprises (SMEs) is expected to drop this year but it will grow from next year onwards, says SMI Association of Malaysia’s ICT bureau chairman Lee Hwee Hsiung.

He said ICT spending was expected to fall this year due to the current economic crisis; SMEs might choose to cut down their ICT spending as a way to reduce their operating cost.

“However, SMEs will continue to spend on ICT as they need it to enhance their business operation. They will do so in a more cautious way,” he told StarBiz.

He said the ICT spending was expected to grow gradually from next year onwards when the market started to pick up.

“ICT is important in enhancing companies’ operations but a lot of companies do not emphasise this area due to the capital problem as the prices of some ICT products are really high,” he said.

He said lack of information regarding ICT adoption was also one of the problems hindering companies from adopting ICT.

“SMEs have to get the right ICT solution by knowing the trend in the market and the features of the products that can improve their business operations,” he said.

Lee also pointed out that manufacturing and chemicals-related companies were more aggressive in ICT spending as they needed intensive ICT to enhance their processing segment.

South Johor SME Association president Teh Kee Sin said the usage of ICT among SMEs was still low in south Johor but it was increasing.

“There is a need for SMEs to adopt ICT in enhancing their operation as the trend for digitalise in operation is moving; thus there is room for ICT spending to grow locally,” he said.

He said ICT could help in optimising the processing segment by saving a lot of money and reducing wastage.

“Generally, manufacturing companies are more aggressive in ICT spending, such as electrical and electronics and food companies.”

He said about 20% to 30% of the SMEs in south Johor were fully adopting ICT and he urged SMEs to allocate about 10% of their revenue for ICT spending annually to upgrade their operation.

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