The Hindu Business Line : IT spending by corporates low: Nasscom

Nasscom said that 30 per cent of companies surveyed had well-defined and documented proof on return on investment for implementing IT in processes. Security continued to be the prime concern among the user organisations.

New Delhi , Aug. 31

EVEN as the domestic software market has touched an estimated $3.4 billion during 2003-04, the IT spending still accounts for less than one per cent of the annual turnover of companies, according to the software association, Nasscom.

"IT spending as a percentage of annual turnover of user organisations is still low in the country... About 16 per cent of user organisations are spending more than 1 per cent of the annual turnover on IT while approximately 50 per cent still spend less than one per cent of their annual turnover on IT," Nasscom said releasing the findings of its IT user survey.

The domestic software market is estimated to reach $4.2 billion by 2004-05.

Banking, financial services and insurance segment, with a share of 24 per cent, was the single largest contributor to the overall IT spending in India followed by telecom (17 per cent), and Government (13 per cent) respectively.

The survey, which has been conducted in association with IMRB, covered verticals such as BFSI, healthcare, NGO, manufacturing, energy & utilities, automotive, consumer goods, ICT and education and assessed IT usage among key business verticals in India.

The parameters on which the businesses were assessed include IT preparedness, policy, IT infrastructure, people, processes and IT implementation benefits.

Commenting on the IT User survey, Mr Kiran Karnik, President, Nasscom, said, ``the domestic IT spending in India is at an inflexion point and there are numerous opportunities in the domestic sector, which can help accelerate growth in the next 2-3 years. Deregulation and increased competition in user industries is driving the race for higher productivity-and thus higher IT spending.''

Indian IT vendors are increasingly turning their attention to the domestic market, Nasscom said adding that Indian user industries are outsourcing parts or entire IT infrastructure to specialised vendors.

The survey revealed that user organisations in the country employed around 2,80,000 IT professionals in 2003-04 as against 2,60,000 in the previous year, reflecting a growth of seven per cent.

"Over 60 per cent of the user organisations have between 1 and 2 per cent of their employees in IT department. Of this, 32 per cent of the organisations have more than 2 per cent of their employees in the IT department," Nasscom said.

About 20 per cent of the user organisations have more than 40 per cent of their IT employees having specialised training, it added.

On the benefits of IT implementation, it found that 30 per cent of companies surveyed had well-defined and documented proof on return on investment (RoI) for implementing IT in processes. About 54 per cent stated while that they did not have documentation, ROI for implementing IT was apparent.

"Around 30 per cent of the user organisations have clearly defined and documented proof on productivity for implementing IT in processes while 56 per cent stated that they did not have documentation but increase in productivity on implementing IT is apparent," Nasscom pointed out.

The survey also revealed that security continued to be the prime concern among the user organisations in the country.

"User organisations are still spending largely on ant-ivirus software and firewalls and need to be more proactive and consider adopting advanced security policies such as disaster recovery management and business continuity planning," the association added.

More Stories on : Trends | Information Technology | Software

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Airtel post-paid tariffs reduced

Aztec Software jumps on earnings potential

Tax reliefs for EoU/EHTP units — Boost to domestic manufacturing: MAIT

Patni to set up Chennai centre

i-flex board meeting today

Helios & Matheson buys 2 firms

New Sify service for corporates

IT spending by corporates low: Nasscom

Kalzoom kit for academic bodies