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IT spending to increase by 12-27 percent: Nasscom

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DQC News Bureau
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Nasscom released the key findings of 'Tracking of the IT adoption study
2006'. Talking about the survey, Kiran Karnik, President, Nasscom said, “The
findings interestingly indicate that the average spending is on the rise and the
sectors leading this are BFSI, energy, utility, tourism and hospitality sector.
What we also see is that from the supply side, more Indian IT companies have now
realized the growth potential in the domestic market and are targeting this
space with customized products and solutions.”

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The Nasscom study made it clear that CIOs would need to ensure that the
business value of IT was proven and delivered. According to the study, the
business benefit would have to be proved up-front and the means of measuring
benefits of IT arrived at by perhaps using an overlay IT-business balanced
scorecard approach or by mapping the benefits perceived and by pre-empting
outcome scenarios.

Kiran Karnik,
President, Nasscom

This in fact, was stated to be a major CIO challenge, which required them to
be more business oriented. The effort of mapping business benefits was immense,
even though some CIOs had already started measuring IT advantages,
juxtapositioning them as trusted business advisors.

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Key Findings
  • The highest average IT spending in 2006:
    BFSI vertical, energy and utility segment
  • The rate of increase in the average
    spending in each of these verticals was expected to be in the range of
    12-27 percent, making them the highest spending sectors in 2007
  • The third sector which was projected to
    witness a considerable hike in its IT spend was the tourism and
    hospitality industry. The sector's Rs 18 crore of IT spend was projected
    to grow by 13 percent, placing it among the highest tech-spenders in India
    in 2007
  • One out of four companies in both large-
    and medium-scale organizations indicated that their IT budgets would
    increase by around 10-19 percent during the current year
  • Business continuity and risk mitigation
    were the key priority areas for CIOs
  • Increasing efficiency and process
    productivity was the business goal achieved through IT adoption in 2006
  • The match between business goals and IT
    spends was not evident
  • The CIO's role as the 'business leader'
    and then as a 'technologist' was not the current prototype
  • IT spends were driven by hardware,
    followed by application and network software

DQC News Bureau




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