Malaysian CIOs Starting to Shift Focus from IT Efficiency to IT Effectiveness: MDeC & IDC Study

KUALA LUMPUR, 23 May 2014 – In a recent International Data Corporation (IDC) study commissioned by Multimedia Development Corporation (MDeC), results conveyed that the Malaysian CIOs are about to make the important step of shifting their focus from IT efficiency to IT effectiveness. In 2014 and beyond, enterprise IT function will be judged on the success in meeting the demands of business users rather than the reduction in cost of technology operations in a business. These results were presented to the Malaysians CIOs in the second workshop of the CIO Survival Guide Series, themed Survival of the Cloud Fittest yesterday.

The study showed that most Malaysian organizations are still at an early stage of cloud service adoption, with mostly ad hoc and opportunistic use of commodity and non-critical cloud services. This is typical of the first stages of clod adoption and an emerging understanding of cloud services use. It shows a continuing focus on cost control of IT functions rather than an awareness of how cloud services have evolved to provide business as well as technology services.

Chris Morris, Associate Vice President, Services Asia Pacific, Lead Analysts of Cloud Services & Technologies, IDC Asia/Pacific said, “A better understanding of cloud usage patterns in other markets will provide excellent insight but the art and science of managing IT in Malaysia will need to continue its current evolution. Cloud services must be managed and optimized for the target business environment to deliver full value.”

Morris added, “The transformation of a CIO into a manager of services rather than a manager of technology will significantly alter the management of a traditional IT department. A CIO could become a broker of services for business, sourcing the best solution to the line-of-business (LOB) demands, however, this solution will create many challenges in the service delivery management.”

Ng Wan Peng, Chief Operating Officer of MDeC said “MDeC realises the value and potential of cloud computing and is continuously working with ICT industry players, stakeholders and other government agencies in driving the cloud computing revolution in Malaysia. Our efforts through the Cloud Computing Enablement Initiative under MSC Malaysia and incorporating cloud computing as one of Digital Malaysia’s eight projects have helped to spur the development of cloud computing in this country further. By getting more Malaysian businesses to turn to the cloud for their needs, we will become one step closer to becoming a developed digital economy to be reckoned with.”

Current state of cloud development in among Malaysian IT enterprises:

• Shift of IT investment focus from cost minimization to IT departments
Malaysian enterprises are shifting focus from cost minimization to actively driving IT departments to innovate more quickly as a way of boosting revenue and profit. This will be an additional pressure for any CIOs from new directions. In 2014, it is believed that CIOs must externally source more of the required IT services which will often be delivered from the cloud.

• IT departments react slowly when moving from a tactical focus on efficiency
Malaysian enterprises must move from delivering cost-effective services to a more challenging goal of being more strategic and effective. This is a vital transition for any businesses because the best solution is not the cheapest when assessed against the business goals.

• The awareness level of cloud benefits in medium-sized organizations is higher compared to larger organizations
LOB managers are more interested in high-value business services delivered by IT to meet business goals. CIOs will start looking at service delivery in a different way when assessing IT on this basis. This heightened awareness means LOB managers are less burdened by legacy systems, allowing medium-sized organizations to be able to position themselves advantageously for future growth and competitiveness.

• Not ready to use cloud services for business-critical functions
There is a lingering focus on tactical goals for cloud deployment but slowly growing understanding on the importance of the strategic value of cloud services in Malaysia; however, large enterprises are still not well advanced about how cloud services can best be used. These could be caused by a number of factors:
o Immaturity of services available
o Opaque legislation
o Lack of cloud skills
o Low understanding of building a business case based on business value instead of cost saving

IDC predicts by 2017, most Malaysian organizations will be using cloud services from different suppliers to meet different business needs, dramatically changing the way in which business goals can be achieved and the role of the Malaysian CIO.

This second workshop of CIO Survival Guide Series examines different stages of cloud development among Malaysian IT organizations and provides solutions to improving the assimilation rate of new services into leading companies. Please visit the web portal (http://www.ciosurvivalguide.com/) for more information about the joint educational workshop.