Here’s how the Russia-Ukraine conflict will impact Apac organisations

The impact of the current conflict between Russia and Ukraine is expected to impact Asia Pacific in the short and possibly long-term, according to International Data Corporation (IDC).

The market intelligence firm foresees sanctions, commodity shortages, and higher prices for oil, gas and other essential goods to further fuel inflationary pressures. Those factors are also likely to damage information and communications technology (ICT) supply chains that support the regional consumer electronics and semiconductor manufacturing as well as distribution industries.

For instance, an extended Russia-Ukraine war will exacerbate the chip shortage in the Asia Pacific and increase transportation costs that may be passed on to customers. Besides that, cyber warfare may also spill over beyond the conflict combatants and into the region.

While inflation may cause some buyers to delay IT investments, IDC surveys suggest inflation is not likely to reduce investments. This varies by country, with Singapore and Japan more likely to report possible delays compared to China and Indonesia.

Inflationary impacts also vary by technology. Asia Pacific respondents report that investments in telco/networks, software-as-a-service (SaaS), and infrastructure-as-a-service (IaaS) are more likely to have budget increases because of inflationary pressures.

“Given the fluid nature of the war, IDC recommends that companies create action plans that enable them to anticipate and react to potential disruptions resulting from it, such as supply chain disruptions, chip shortages, increased inflation, and cybersecurity threats. The impact of events can change quickly, and so must your plans. Leveraging technology for resiliency should be top of the agenda,” says Sandra Ng, group vice president and general manager at IDC Asia/Pacific.