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Winning a coveted crown for the first time is a notable feat, but as most winners would vouch, retaining the crown the following year, is doubly difficult and highly commendable. However, very few get to savor the pleasure of a hat-trick, an achievement that can be dubbed as stupendous.

In terms of IT adoption and usage, India, Inc has just achieved this stupendous feat; after two years of fantastic growth in 2003-04 and 2004-05, the DQ-IDC Megaspenders Survey 2006 reveals that in 2005-06, Indian enterprises witnessed a giant leap forward, for the third time in a row. In fact, after three years of unwavering growth, the success of IT usage by Indian enterprises has started emanating a sense of déjà vu.

Base: 196 large enterprises DQ-IDC Megaspenders Survey 2006

India, Inc records third successive year of growth in IT usage, exceeds last year's prediction, and the momentum shows no signs of slowing down next year. The combined spend on packaged software and services exceeds spending on hardware, signifying a major paradigm shift in the top spenders' usage pattern. Outsourcing, particularly of non-core operational activities and accounts and finance, is becoming common across all enterprises. In 2006-07, most enterprises in some form or the other would also outsource HR & marketing activities. More than half of the Top 50 spenders on IT during 2005-06 were PSUs. The myth that automation can only take place after these companies are privatized is busted.

Who Were the Big Users?
The feeling of déjà vu intensifies further when the survey reveals that once more, telecom, BFSI and IT/BPO led the rest in IT spending during 2005-06. Sectors such as oil and petrochemicals have emerged as key spenders, this time, thanks to the mega investments made on automation by organizations of the likes of ONGC and BPCL. Most notably, India Inc has topped the 17% growth predicted in the Megaspenders survey last year. The next year is going to be even better than the year gone by. At Rs 6,611 crore, 2005-06 witnessed a healthy growth of 18% on IT spending by India Inc, while the survey predicts a 29% growth next year, when total spend on IT could touch Rs 8,544 crore.

No surprises that according to the DQ-IDC Megaspenders Survey 2006, BFSI at Rs 2,634 crore was at the forefront of IT spending, with other verticals such as telecom (Rs 1,288 crore) IT/BPO (Rs 878 crore), oil and petrochemicals (Rs 750 crore) and discrete manufacturing (Rs 416 crore) following suit. However, at 42%, pharma and biotech recorded the maximum growth this year.

These are also the verticals that are planning to spend the highest in the next financial year. However, BSNL from the telecom sector emerged as the biggest spender amongst Indian enterprises during 2005-06. Obviously, 2005-06 witnessed large scale IT adoption by BSNL across all its circles, thanks to a host of new initiatives it undertook.

One clarification regarding the DQ-IDC Megaspenders Survey 2006 is probably necessary here. While 196 large enterprises participated in the survey, there were at least 15 large traditionally heavy IT users who refused to take part. However, for authenticity of the survey, IT spendings by these companies have been estimated to determine the overall tables. For individual trends, the survey has stuck with the participating respondents. Those missing from the survey include the likes of SBI, ICICI Bank, Reliance Industries and TCS, among others.

As mentioned earlier, the highest growth in IT spend during 2005-06 was recorded in pharma and biotech (42%) and IT/BPO (31%) verticals. This was probably due to the growing market for bioinformatics and the need for compliance with global regulations by IT services and BPO companies. However, the growth in IT spends over the next year would be maximum in telecom (47%) and BFSI (35%). The Top 50 IT spenders, not surprisingly, included 16 banks (including 13 PSUs) and five insurance companies, as well as seven telecom service providers.

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