Last but not the least, both Sanjay Singh, head IT, Timex
Watches and Tuteja argue the fact that since the DQ-IDC Megaspenders 2007 survey
includes most of the organizations in the ET500 list (implying mostly listed
companies), they are mostly mature on the IT adoption curve. This too can
explain, to a certain extent, why expenditure on IT can dwindle next year.
| Average
IT expenditure across the "megaspenders" grew 27% to Rs 34 crore
per organization, in 2006-07 |
Tracking the Spend
Once you dissect the IT spending pattern, hardware continues to top the
charts at 42%, though, as discernible from last year, a paradigm shift towards
packaged software and services seem to have started. The combined spend on
packaged software and services easily exceeds that of hardware, and quite
obviously this investment translates into the fact that Indian enterprises are
maturing and looking at IT beyond its traditional role of automation.
However, Kapoor is not so optimistic as he feels that majority
of the spending under services category still comes from AMC contracts. Indian
enterprises are still looking at IT investments more from the IT consultancy
perspective than business consultancy preview (read, business changes). Some
big-ticket deals in recent times have signified that India Inc is slowly
starting to move towards a model of asset stripping, where device-based
resources are outsourced from the traditional model of facilities management.
But at the same time, the fact that 42% of services spend is still constituted
of support and maintenance is a major dampener.
Some interesting facets emerge even within the hardware and
software spending areas, especially for global MNCs that have significant
presence in India. In case of global companies, either they do not pay the
software license fees in India (parents have global contracts with software
vendors) or they obtain major discounts on license prices as per global
negotiations. Hardware costs also often involve bundled cost of both the boxes
as well as operating systems.
 |
|
 |
|
"The IT spending for
most organizations is moving from capital expenditure towards operating
expenditure, and this could account for the slight tapering off in
spending growth" |
|
"Since the DQ-IDC
Megaspenders 2007 survey includes most of the organizations in the ET500
list (mostly listed companies), they are mostly mature on the IT
adoption curve. This could explain why IT expenditure growth might
marginally decline next year" |
| -Sunil
Kapoor, director, Central Buying, Fortis Healthcare |
|
-Sanjay
Singh, head, IT, Timex Watches |
Presently, mail messaging solutions, security and WAN are the
most commonly used technologies by organizations, and in future most of them
would continue to expand on the deployment of the above-mentioned technologies
across organizations (breadth and depth). Line of business specific application
like core banking in BFSI, engineering applications in automobile and
implementations of ERM and CRM across verticals are some of few technologies
that would be the drivers of IT spend next year.
| Methodology |
|
The "Dataquest-IDC Mega
Spenders 2007"- A Study among large enterprises in India" is
compiled on the basis of a methodology jointly decided by IDC India and
Dataquest. The IDC team was led by Shailendra Gupta who was assisted by
Satya Sundar Mohanty and Shakyadev Mitra.
The objective of this year's
DQ-IDC Mega Spenders Survey 2007, like the last four years, was to find
the top IT spenders in FY 2006-07, both in terms of individual
organization as well as across various sectors. In addition, the survey
also intended to assess the IT investment pattern during the year; and
plans for future investment during FY 2007-08. On the basis of the set
objectives of the research, Dataquest commissioned IDC India to
undertake a large-scale quantitative survey across various cities in the
country. The survey involved face-to-face interviews with CIOs or IT
heads of organizations across different sectors. Following the survey, Dataquest
organized a close-door meeting of a few leading CIOs and analysts to
discuss the survey findings. A preliminary list was prepared on the
assumption that companies with higher revenues would probably spend more
on their IT infrastructure. The sample list included more than 200 large
enterprises from ET500 & BW500 lists, and the key players from
banking, technology, and related verticals-with traditionally high IT
spend. IDC administered the questionnaire to 222 companies who
participated in the survey, while a few questionnaires were rejected
either while validating the data or due to logical errors in the data.
One obvious problem faced by the survey was that while the final
analysis was based on a sample size of 211, at least 15 large
traditionally heavy IT users refused to participate. However, for
authenticity of the survey, the IT spends by these companies have been
estimated by IDC from secondary sources and projections from previous
surveys to determine the overall spending graphs and tables. For
individual trends, the survey has stuck with the 211 participating
respondents. Those missing from the survey include the likes of TCS,
HDFC Bank, Reliance Communications, BSNL, Bharti, Tata Steel, Maruti
Udyog, and Dr Reddy among others. |
| Note:
Unfortunately, this year we had to drop the Telecom vertical
analysis due to very low base or unavailability of key contact persons
in Telecom hence all IT spend analysis based on Telecom is based on
previous data/Internet/IDC respiratory knowledge base. In all other
analysis (Except IT Spend) is done without Telecom Company or only for
surveyed organizations. |
Utility: At 45%, this sector recorded the highest growth
among all verticals in terms of IT spend. Most of the companies involved in this
sector were implementing SAP during the year. And since ERP deployment is
normally a long drawn process, implementation cycle would likely to continue
this year too for many of the companies. Therefore, though next year it might
not match the high growth percentage of this year, even at 35% it is projected
to be a hi-flier amongst verticals on IT spendings.
Rajneesh De
rajneeshd@cybermedia.co.in
Graphix: Paras Jain Page(s) 1 2
|
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