The growth in infrastructure projects is one of the leading drivers in the construction industry, providing necessary spurt to the IT adoption curve in the vertical. According to Satish Pendse, CIO, Hindustan Construction, traditionally till about six to eight years back, the government spending on infrastructure was around 2% of the GDP, which has now grown up to 4% of the GDP. While the GDP spend on infrastructure is growing, the GDP size itself has grown over the years, thereby meaning an exponential increase in investments going into the infrastructure construction. Going forward, the investments are likely to grow rapidly as India harbors the dream of catching up with China, which spends around 9% of its GDP on infrastructure. Thereby, driving rapid growth in the construction vertical.

The last few years has also seen a dramatic change in construction trends in the country with the private sector increasingly carrying out projects on a much larger scale, ranging from residential complexes and new townships to malls and big retail outlets. "The sector has become hot, as the business value of this sector has increased manifold and companies in this segment have become large enterprises," says Vinod Subramanian, regional manager, Application Sales, OracleDirect.

As the sector is growing rapidly, the competition has become far more aggressive with older companies expanding and becoming bigger and newer as well as foreign companies entering the fray. This, in turn, is putting the pressure on the companies to improve operational efficiencies. With the growth, companies today are handling as much as around sixty to seventy projects simultaneously as compared to around ten to twelve simultaneous projects till about a few years back. This apart, as Pendse says, the value of the projects has also increased substantially with the ever-increasing pressure to reduce the cycle time and the projects' costs as well as greater strictness to deliver the projects on time.

The only way to work efficiently at such a large scale is to have strong operational systems in place that take care of everything from procurement to financials to timely project execution. According to Subramanian, although most companies were using basic IT to create such an environment, the last few years have witnessed an increase in the uptake of world class IT solutions by this segment. They increasingly begin to realize the benefits of computing, project management, and collaboration technologies. "This trend will only continue to gain momentum in the coming years as construction companies continue on their phenomenal growth path," he adds.

IT Adoption Trends
Global majors like Jacobs, Skanska, Bechtel, Parsons, Black & Veatch, CDM, etc have been using various IT solutions for improving operational efficiencies for a while. Compared to their global counterparts, IT adoption in this vertical in India is still in its nascent stages although some companies have taken up these as a growth enabler. The newer companies and foreign multinationals joining the fray by entering the market with their own set of advanced technologies already in place, while the older set are now looking at IT with a renewed interest. According to Sanjay Agarwala, director, ESS, among the most visible growth at the builders (residential, commercial, etc) end, the erstwhile small time contractors have become 'corporatized' and now run formally managed companies with defined management practices. With growth, they have had to adopt technology in their various areas of business.

Traditionally, from home-grown solutions to islands of computerization, IT in the fast moving construction industry is now transitioning to standard ERP systems. Pendse says that the movement towards integrated standard ERP systems has started in the last three years and is still in the early stages though gaining momentum. According to Kumar R, the factors driving the trend towards standard integrated offerings include the need for tighter control over operations, quality compliance in execution, global business practices due to global expansions, MNCs entering in joint ventures with Indian corporate, and streamlining operations as prerequisite norm before going for public funding like IPOs.

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