PIKOM calls for a balance in cost-cutting on ICT

A cautious approach needed to boost economy in the long run

PIKOM, the Association of the Computer and Multimedia Industry of Malaysia, is calling on the Government to take a more cautious approach in curtailing spending in information and communications technologies. This comes in light of the Government’s recent austerity drive announcement which includes freezing computer purchases.

Although agreeing that the Government needs to initiate some measures during these trying times, PIKOM strongly believes that a blanket approach in cost-cutting on ICT is not the right move. Instead, the Government should apply a more conscious approach which involves identifying initiatives that could bolster the economy in the long run.

“With the current economic conditions aggravated by the hike in oil price and the sub prime loan issues in the United States, the Government has no choice but to undertake serious measures to reduce national spending. While it is good to be cautious, we should not encourage a ‘panic’ spending cut especially in areas that can give the economy a boost,” stated PIKOM Chairman David Wong Nan Fay.

Today, ICT has become an integral part of everyone’s life. Almost every sector of society is dependant on ICT for information. As it is the enabling tool for efficiency, productivity and competitiveness, Wong remarked that the move to cut spending on ICT will have a devastating effect not only on the local ICT sector but also trigger off a domino effect affecting the whole economy. It could also dampen the Government’s aspiration to create a knowledge economy.

“There’s a danger of the herd mentality emerging. The Government’s move could encourage others to follow suit and this will impact every aspect of the ICT industry and the economy,” he added.

The Government’s decision, Wong commented, will slowdown the growth of the local ICT sector as Government spending on ICT contributes a major portion of the total industry revenue.

He suggested that the Government focus on getting better return on investments and prolonging the shelf life of systems, applications and technologies via a more preventative maintenance approach that will reduce the need to replace systems.“The Government should concentrate on getting better returns on their current ICT investments and where possible re-use the existing systems and technology.

PIKOM is of the view that there should not be cutting of spending related to improvement of productivity.”

He highlighted that ICT is also essential in facilitating austerity measures as it provides a delivery channel otherwise not possible. For example, Wong stated that the recent decision by the Government to channel fuel rebates to more than 10 million vehicle owners through the 683 post offices nationwide was made possible with the use of ICT tools.

“Initially, the decision was met with skepticism as many questioned POS Malaysia’s preparedness and capability to handle an anticipated high number of transactions. However, Pos Malaysia announced that each cash transactions will take no longer than three minutes. The payment process includes verification of vehicle owner’s details with Road Transport Department and if there are no hitches, payment is made immediately. This has been made possible due to the extensive investments made to enable online connectivity to facilitate inter-agency transactions.”