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"The future’s so bright I gotta wear shades…"—Timbuk3
This line from a popular number of yore might just be the IT industry’s
mantra for the year ahead.
The big enterprises intend to hike their IT budgets by over 26% in 2004-05.
This comes as a light at the end of the tunnel for an industry that saw a
decline in the last couple of years. And the year 2003-04 ended on a positive
note with the industry growing at 5.5% (For a detailed report see Megaspenders
2004 in the April 31, 2004 issue of Dataquest)
Hardware Will Continue to Rule
Nearly half of the average IT budget of a large enterprise will go into the
purchase of hardware to further bulwark the existing IT infrastructure,
something that the Indian enterprise has been doing for the past few years. The
major reason for the same is the fact that automation and connectivity to remote
locations are still not complete for the Indian enterprise. Be in a bank or a
private enterprise, remote branches are either operating on stand-alone PCs or
don’t have access to one. For instance, a very few banks today can boast of a
network of branches where each one of them is computerized. And in all the
verticals studied, no major departure from this trend of spending nearly half on
hardware was observed.
And it is this exact factor that spells advantage for the suppliers of
hardware. Hardware suppliers can create customized bundles that can be very
attractive for enterprises. The service deals of Bharti and Bank of India that
went to IBM and HP respectively are examples of the case in point. It is no
coincidence that the respective companies already had strong relationships with
the clients through the supply of hardware. And it is a no brainer to add
services to that, an opportunity that most hardware vendors are not missing out
on. And the year ahead will therefore see an amplification of this trend.
Applications Catching Up
The lion’s share will continue to go to hardware but applications like ERP,
SCM, CRM and others are occupying a position of greater importance for the CIO.
The CIOs, in certain verticals not only plan to spend more on the area but are
also prioritizing the same over some other pieces of hardware (See: Which area
would the CIO spend the most on?). It may be too premature to say so for the
Indian enterprises as a whole but in certain verticals, solutions (the right mix
and match of hardware and applications) are being innovatively used to create a
competitive advantage.
For instance, a leading Delhi-based real estate and construction company has
recently implemented a solution where its sales force can send an SMS to
determine the status of a particular apartment or property. And the application
allows something even more. It allows the sales staff to then book the
apartment, again by sending a simple SMS. While in the real sense the tying up
of the cell phone with the database at the back is not something very
innovative. But it delivers a sense of relevance and context to the information
available to the sales staff. Information bestowed with relevance and context is
what will drive real benefits out of IT.
Mohit Chhabra in New Delhi
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