Asia Pacific Manufacturing SMBs To Increase IT Spending In 2006

NEW YORK—(BUSINESS WIRE)—May 15, 2006— China to Drive Nearly Half of All Manufacturing SMB IT Investment Dollars in Asia Pacific

IT-related spending by manufacturing SMBs will reach $23.5 billion this year across the Asia-Pacific (APEJ) region outside Japan. This is an increase of 16% from 2005, with small businesses (1-99 employees) showing even faster growth. Manufacturing SMBs in the region's key emerging markets, including India, China, Thailand and Indonesia, are expected to increase their IT spending by 16% to 25% from 2005. Many manufacturers in the region will continue to invest in IT vigorously, which will allow them more operational efficiencies to contain rising business costs from stiffer competition and the complexities introduced by globalization and liberalization of markets.

These findings emerge from recent surveys by New York-based Access Markets International (AMI) Partners, Inc. "The manufacturing industry today faces a wide variety of challenges," says Jackie Chan, Senior Analyst at AMI-Partners. "These companies are attempting to improve their profitability, reduce business and manufacturing process complexity, and gain better business insight in order to stay on top of their industry."

Meeting Today's Challenges With Enterprise Software

Manufacturers today must respond to business events in real-time, make products in response to customer demand and outsource a wide variety of functions, which force businesses to create and pursue a real-time, value chain vision. As such, over 11,000 additional APEJ SMBs in the manufacturing sector are expected to be new adopters of ERP/SCM solutions this year. "Many systems are currently not integrated, resulting in low visibility into the status of supply-chain deliveries, inventory and resource levels," commented Chan. With increasing availability and decreasing cost of broadband access in many of these geographies, ERP/SCM delivered as a hosted service (SaS) is also becoming an increasingly popular option. Total ERP/SCM-related investment in this group is expected to increase 13% from 2005. But ERP/ SCM as an SaS is projected to increase 20%.

Similarly, CRM as an SaS investment is expected to grow 30%, which is more than 2x faster than growth of traditional CRM spending this year. "Many of these manufacturing SMBs find that it is hard to manage, analyze or view key business trends and insights without CRM systems," says Chan. "Sales and marketing campaigns are often ineffective due to inability to map demographic data against key customer attributes." CRM deployment is expected to grow at 19% this year resulting in new adopters; but many manufacturing SMBs are also looking to adopt additional CRM modules as their needs expand.

Geographic Perspective

China has emerged as a powerful manufacturing center. AMI's findings confirm that manufacturing SMBs in China drove 41% of total manufacturing SMB spending on IT in APEJ, and this percentage is likely to increase to 48% by this year. Other countries of significant impact are India and Korea, each of which will drive over a tenth of all manufacturing SMB IT spending in the region. When it comes to spending growth from last year, however, Korea is overshadowed by the escalation in Indonesia and Thailand, each of which is expected to grow 16% from last year. "These are the tiger economies in Southeast Asia, characterized by the growing importance of their manufacturing industry, producing labor intensive to medium skill products, the decline in importance of agriculture and a growing service sector," says Chan. As these economies progress in their stage of maturity, these manufacturing SMBs will also be forced to be more reliant on IT to enable their business processes. While Discrete Manufacturing sectors drive the bulk (94%) of IT investment in Indonesia, Process Manufacturers are expected to contribute over 65% of total manufacturing SMB IT spend.

About AMI-Partners

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- focusing on global small and medium business (SMB) enterprises. The AMI-Partners mission is to empower clients for success with the highest quality data, business planning and "go-to-market" solutions. AMI was founded in 1996 under the name of Access Media International (USA), Inc. by Andy Bose, formerly group vice president at IDC. Since its inception, the firm has built a world-class management team, each with ten to fifteen years' experience in IT, telecom, online communications or multimedia.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 20 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. Each year AMI invests in IT industry's most comprehensive primary research based surveys across Asia-Pacific to update its proprietary knowledge base and models. Specific countries covered include: Australia, Japan, China, India, Indonesia, S. Korea, Malaysia, Singapore, Taiwan, Hong Kong, Thailand and New Zealand. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.

For more information about this study, AMI-Partners, or our global SMB research, please call AMI-Partners at 212-944-5100, e-mail, or visit the AMI Web site at

Quoted Anaylyst:
Jackie Chan, 212-944-5100 ext 527

Email Contact
Media Relations:
In US (New York):
Nancy Carty, 212-944-5100 ext 581

Email Contact
In EU (London): 
Claudia Jachtmann, 44-208-987-2756

Email Contact
In Asia Pacific (Singapore):
Diana Ng, 65-6238-1101

Email Contact
In India (Kolkata): 
Neha Jalan, 91-33-4003-3093 ext 279

Email Contact


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