Middle East Executives Say: Confidence in IT Spending On The Rise

sap_sug_mena_logoMiddle East business leaders have unanimously agreed that they expect IT budgets to return to pre-downturn levels in the foreseeable future. This compares to only 53 percent of executives questioned in March, indicating the importance major companies in the region are placing on IT assets as a means of thriving in the current economy.

In a survey conducted at the SAP User Group Middle East and North Africa (SUG-MENA) Executive Exchange meeting hosted at the SAP Forum in Dubai this month, all executives questioned also stated that the role of the CIO has become more strategically important to businesses in 2009. The survey, which was first conducted in March during the SUG-MENA meeting in Bahrain, sheds valuable insight into the shifting perceptions of the importance of IT investment.

“A large number of SAP customers in the region are members of SUG-MENA, and the Forum provided an ideal platform for us to engage with senior SAP executives and receive insights into SAP’s future product strategy and overall direction. We were also given the opportunity to share our own ideas on how SAP can further support the development of its customers and the region as a whole,” commented Salem Al Angari, President of SAP User Group SUG-MENA.

Of those executives polled, 92 percent believe that strategic IT investments can help companies survive and prosper during the economic downturn. In addition, 75 percent had also witnessed an increase in internal competition for IT budgets throughout the year (more than a 10 percent increase compared to March results). This strongly suggests that many companies are shifting from a cost focus to a value perspective, and are becoming increasingly aware of IT’s role in creating a sustainable business model, minimizing exposure to risk and displacing the competition.

83 percent of those questioned confirmed that their company would not be using IT assets as a means of generating cash in 2009 (compared to 58 percent in March) through actions such as the sale and leasing back of hard assets and outsourcing agreements.

“The region’s leading businesses have recognized that strategic IT investments which deliver tangible value to the business are essential in order to excel in today’s business environment. Organizations are also using IT to gain the clarity and transparency necessary to anticipate and respond to customer needs,” said Sergio Maccotta, Managing Director, SAP Middle East and North Africa.

In the survey, executives also voiced their thoughts in regard to their primary concerns, which included a lack of understanding about the value of IT from some areas of the business, and insufficient resources to support essential projects. However, the consensus regarding the rise of IT budgets illustrates that the latter issue may be alleviated in the foreseeable future.

When questioned, all executives felt that IT vendors could help by becoming more proactive in helping to justify IT investments. Key areas identified were demonstrating return on investment and preparing Board-ready business cases.

The SAP User Group – Middle East & North Africa (SUG-MENA) Executive Exchange provided a common ground for senior IT executives from across the Middle East to discuss the challenges of managing the changing role of IT and interact with other SAP users. SUG-MENA conferences strive to provide rich and diverse content, with the aim of capturing the interests of SAP users, and incorporating suggestions and recommendations from attending members.

The 2009 event theme for the SAP Forum was “See Your Way Clear: Strategies for Success in the New Reality”, and witnessed more than 1,700 registered attendees, and 1,400 customers, prospects, and partners convene in Dubai for the three day event sessions. In addition, there was a strong presence from the SAP ecosystem with 27 SAP partners sponsoring the event, and more than 100 attendees at the Partners Education day.

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Tarek is the founder and chief researcher at Youngberry, a youth research and marketing firm dedicated to the region. Tarek founded interactiveME.com and previously worked as Manager at Flip Media (Interactive Agency), Bayt.com (Job Site) and Consulting House Qatar (Consulting firm). He is researcher and writer on internet & disruptive innovation, entrepreneurship, and youth culture.