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How next-gen computing changes the way we live and work

Mobile is pervasive and still growing

More people today have access to mobile devices than banking services.1 In fact, the number of mobile devices (7.9 billion) exceeds the world’s population (7.35 billion.) 2 Mobile, for most of the populace, has become essential to everyday life. And it has become indispensable in the way we do business. For example, more than 27 percent of global online transactions are conducted through mobile devices. 3 By 2017, it is estimated that 30 percent of all travel sales in the United States will be generated through mobile devices. 4 By 2021, the compound annual growth rate (CAGR) for total mobile data traffic is expected to increase to 45 percent. 5

In response to this tremendous growth, our study revealed that organizations are planning to triple their mobile investments, going from 13 percent of IT spend to 40 percent over the next three years (see Figure 1).

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Executives surveyed indicated that they currently dedicate at least 13 percent of their total technology spend to mobile initiatives and plan to increase that allocation to 15 percent in 2017. In addition to spend, they also reported they plan to grow the number of initiatives undertaken. The big spenders, which represent one-third of survey respondents, plan to spend at least $15 million USD on mobile initiatives next year. Also, 22 percent of companies plan to undertake ten or more mobile initiatives by 2017, while another half is planning between five and nine projects. Totaled, approximately 72 percent of the executives we interviewed plan a minimum of five initiatives over the next 12 months.

Beyond just planning for a greater number of mobile initiatives and investing more money in them, these executives said they look for payback periods of less than a year. In fact, 62 percent of executives indicated their most successful projects pay for themselves in fewer than 12 months, considerably faster than the two-to-three-year payback for typical technology projects.

As a result of increased investment and taking on more projects, executives expect their revenue to increase by an average of about 7 percent over the 12 months, with more than one-fifth of the group looking for revenue increases of at least 10 percent. In addition to expected revenue gains, executives interviewed anticipate a 6-percent cost reduction over the next year. Further, organizations plan to increase employee effectiveness to allow them to exceed customer expectations. And they plan to grow revenue by identifying new sources and expanding existing ones, as well as create new business opportunities by supporting new business models and expanding into other industries and product/service areas.

With such ambitious plans, investment commitments and ROI expectations, it becomes crucial to understand the encumbrances that might stand in the way of successful implementation. Almost half of the executives we surveyed admitted their companies approach mobile initiatives in an ad-hoc manner. Without strategic alignment with company value propositions and corporate objectives, many of these offerings become hit/miss endeavors and often fail to achieve the desired value. How, then, can organizations begin to explore differing product objectives, more integrated approaches and a focus on external users (instead of internal) to impact the achievement of desired outcomes?

To view the full article, please go to page top to download the PDF version.

Content provided by IBM Institute for Business Value
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