CIOIN

IT Spending in India will grow by 10.3 percent to surpass USD 39 billion ( INR 195,000 crore) in 2012, a 10.3 percent increase from 2011 spending of USD 36 billion ( INR 180,000 crore), according to Gartner. The growth of IT in India is expected to continue, with an annual increase to exceed this level through to 2015.

The financial instability across the world has fueled anxiety among businesses in India and they are taking a cautious approach. “Despite this overall sense of caution due to uncertainty in the US and European markets, we are still essentially seeing economic growth in India overall; our economic forecast source, IHS Global Insight, was forecasting overall 15 percent sales growth across all sectors in total in 2012,” says Derry Finkeldey, principal research analyst at Gartner .

The pace of economic growth in India, with a mild dip by global standards during the worldwide recession in late 2008 and 2009 — has brought the role of IT into sharp focus within many enterprises. “Business is increasingly looking to IT to help support the challenges of rapid growth for customer support, supply chain management, optimizing business processes or helping to drive innovation in the business,” Finkeldey believes.

Sunil Mehta, Sr. VP and Area Systems Director, JWT believes that the slowdown is the apt time to focus on extracting better opportunities and improve the organizations efficiencies. “From trapping into new business markets to innovative resource planning, IT can help businesses think out of the box in times when businesses are sensing a crisis,” he says. (Read Mehta’s Column)

This increase in IT spending is being fueled by technologies like BI and infrastructure, in almost all sectors of the economy. “Our analysts in India are seeing our enterprise clients investing in data center, storage, and also security. There is also investment occurring in BI in sectors such as telecom, financial services and retail” Finkeldey says.

According to Finkeldey, recent Government decisions to allow 100 percent foreign direct investment (FDI) in single brand retail, and up to 51percent in multi brand retail, are expected to provide retail the sector with a significant boost in terms of IT usage and adoption. The retail industry is expected to achieve the strongest growth in percentage terms in 2012, where IT spending is forecast to grow 11.8 percent. Selection of partners with deep vertical expertise will be crucial to success.

Gartner’s IT spend survey found that Indian organizations expected a net mean IT budget increase in 2012 over 2011 of more than 9 percent. In this environment, many companies are still investing to grow, and this includes their IT systems.

"The Indian enterprise market is quite distinct from other markets in Asia/Pacific. IT is now fundamental for business in so many industries – particularly at the large Enterprise level – and companies simply cannot compete if they don’t invest, More so if they want to keep the business afloat in these testing times," said Ms. Finkeldey.