The Hindu Business Line : Tech spend growing at 15%: Gartner

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Pune Feb. 11 At a curtain raiser to the Gartner CIO India Summit 2007, Gartner Inc has stated that Indian ICT spending is growing at a five-year compound annual growth rate (CAGR) of 14.8 per cent, the highest in APAC, to exceed $36 billion by 2009.

According to Mr Terry Waters, Global Head of Gartner Executive Programmes, a community of Chief Information Officers (CIOs), business leaders expect IT to support and drive enterprise growth plans. "The increase in IT spending is driven by business priorities such as supporting competitive advantage, attracting and growing customer relationships and improving business processes," he points out.

Delivering Growth

Gartner's India CIO Summit, which will be held in Mumbai on February 20 and 21 will focus on the strategies and tactics that successful businesses leverage to maximise the effectiveness of their IT organisation. Indian companies fuelled by global aspirations are entering new markets through organic and inorganic growth. But they are competing with global companies that have been leveraging IT to support their business needs for a good many years. "This leads to challenges for the CIO in areas such as customer support, capacity planning and integration. Indian companies are relatively new adopters of IT, and therefore Indian CIOs have years of IT backbone to catch up on. This is further adding pressure on the CIOs to meet the IT requirements of Indian companies going global," he points out.

resource gap

Mr Terry pointed out that another challenge faced by the Indian CIOs today is bridging the resource gap to meet the rapid growth in the ICT market to support their business growth.

The resource gap is at two levels, which included human resources and vendor relations. He noted that being lower down in the value chain for IT resources, local Indian enterprises are faced with internal labour shortages particularly in programme and project management, enterprise resource planning projects and IT operations.

Looking at the vendor relations, he is of the view that most Indian IT services companies are primarily focused on outsourcing deals from foreign markets while global IT services companies operating in India focus on large deals from Indian companies.

The small and medium businesses (SMBs) in India growing to meet the burgeoning domestic market requirement are therefore finding it tough to get the right IT vendor as they are not lucrative to Indian or global IT services players.

Finding the right IT vendor to partner with is posing a major challenge for Indian SMBs, with most IT players ignoring the local market opportunity.

Mr Terry noted that the emerging challenge that Gartner perceives in the next six to eight months is the retention of the business line managers.

As the industry continues to be more business and domain focused, retaining resources in the business will be a big challenge. Managers from larger banks, manufacturing units, and other vertical industries will constantly move in order to meet the domain needs of large IT services players operating out of India.

Key Technologies

Mr Partha Iyengar, Research Vice-President, Gartner and Chairperson for the Gartner CIO summit, said Indian CIOs need to create results by working `in' the business to improve current capabilities and build for the future by working `on' the business to drive new capabilities, innovations, projects and services. Asked what the key technologies would be which the Indian CIOs would have to look, he noted that infrastructure which included servers, desktops, storage, consolidation and how to leverage the capability and skills of outsourcing.

Vertical industries such as communications, financial services and services industries are driving the India market, especially with their need for telecommunication equipment and services followed by hardware, he noted. With competition and Indian companies going global, the Indian CIO's role has evolved and their priorities, according to a recent Gartner survey, are similar to those of global CIOs.

Improving Business

According to Mr Terry and Mr Partha, the top three priorities for the India CIO was supporting competitive advantage, attracting, retaining and growing customer relationships and improving business processes.

But these priorities at the global CIO level stood at four, three and one.

For the global CIO, the priority was improving business processes, linking business with IT and strategic plans and demonstrating the business value of IT. For the Indian CIOs security and data protection was of utmost importance while for the global CIO it ranked 10th in its priority list, he added.

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