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Krishna Kurup is a worried man, very worried indeed. As the
CIO of the South Indian Shipping Company in Kochi, he has been pleading with his
top management for months for the purchase of two servers and a NAS box in his
organization. Otherwise, he is certain that there would be a major data crash
leading to serious disruptions in his business. He also feels the need to deploy
an ERP as it is becoming increasingly difficult for him to manage disparate data
in the organization.
However, he is not getting audience with his MD, and,
therefore, is not able to explain to him the gravity of the situation.
Unfortunately, his CFO too is not very interested in acquiescing to his
requests. Kurup is today in a major conundrum-if something happens he would
have to bear the maximum repercussions, but no one is keen to help him in
ensuring that nothing happens.
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Automation
Still a Problem Area
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Over 60% don't
consider IT as strategic
-
Nearly 15% do not
feel the need for an IT department
-
IT procurement
constitutes the biggest pain area, followed by deterrents in IT
adoption and
IT integration
-
Majority says that
most vendors, especially the MNCs, have little understanding of their
technology and business requirements
-
Unlike their larger
counterparts, midsize BFSI enterprises have the second lowest IT
penetration amongst all verticals. Though they have the second highest
total IT spend, their planned expenditure on IT is the second from
bottom amongst all verticals
Some
Light at the End of the Tunnel
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Nearly 80% employ
IT personnel
-
In nearly 70% of
organizations, the MD/CEO/COO takes the decision related to IT
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Nearly 80% say that
having an IT department would ensure smooth functioning of the
business
-
Majority said IT
would improve employee productivity and help serve customers better
As
expected...
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Kurup's dilemma is not an isolated instance. Akash Parikh
of Vadodara Auto Suppliers, Bakul Gala of Gala Brokings & Mutual Fund in
Mumbai, Sachin Ahir of Perfect Courier in Aurangabad, Mohit Srivastava of Shri
Ram Metals in Lucknow, and Pramod Rathi of Triveni Engineering in Kolkata are
all facing the same predica-ment. In fact, whatever the marketing pashas of the
IT vendors might claim, automation has still some way to go amongst the Indian
midsize enterprises, otherwise referred to as SMBs. As the DQ-IDC Survey on
'Midsize Enterprises' shows, while IT penetration level is fairly advanced,
in patches, amongst this sector, there are areas where the automation level is
still well below the critical level.
Is IT Strategic for Indian SMBs?
This is the most crucial question for the Indian growing enterprises, one
that is on the lips of vendors, analysts, researchers et al. And going by the
DQ-IDC Midsize Enterprise Survey, the answer is a resounding 'NO'. Any
organization is considered to have a strategic IT department in case it fulfils
the following four criteria:
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The CIO/CTO should be involved either in decision
making or in influencing during the process of IT purchase.
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CFO/VP-finance should not be involved in the decision
making process in IT purchase.
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The organization should have a separate IT department.
Any organization having more than one personnel involved in IT function is
considered to have a separate IT department.
-
And, last but not the least, the CIO/CTO must report to
the CEO/COO/MD of the organization.
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Source: DQ-IDC Midsize
Enterprise Survey
BFSI shows a surprisingly low IT spend as a percentage of turnover. And,
IT Services/Software leads all the way |
Going with these criteria, only 39% of the total 413
respondent organizations confirmed that IT is indeed strategic for them-on the
other hand, more than half of the organizations across all of manufacturing,
services, education, IT services/software, BPO, and BFSI verticals do not look
at IT as strategic at all. However, there are some silver linings too; nearly
four out of every five enterprises do have a separate IT department, though this
number could have been influenced by the BPO and IT services/software verticals
where the figures are 100% and 91% respectively. Also, in 70% of the
organizations, the MD/CEO/COO takes all decisions related to IT and almost 80%
believe that IT could help in smoother functioning.
Who's Spending What on IT?
The best measure of IT's strategic importance for a Midsize Enterprise
could only be gleaned from the level of IT penetration and the corresponding
spends, and the budget allocated under these heads. The overall IT penetration
was found to be fairly low-though, as expected, BPO and IT services head the
list. IT penetration was measured by how organizations have adopted 56 different
types of technology solutions. These 56 solutions defined by the DQ-IDC Midsize
Enterprise Survey span across technology related to telecom infrastructure,
hardware, software applications and IT services. Software penetration is fairly
low in the services and BFSI sectors, though, hopefully, IT services penetration
seems to be better across all verticals. Storage adoption shows the gulf in IT
penetration between large and growing enterprises-while NAS/SAN are today's
hot technologies in large organizations, network storage has weak to negligible
penetration amongst SMBs. Page(s) 1 2 3 4 5 6 7 8 9
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