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Smaller firms to spend more on IT: E&Y Study

Press Trust Of India/Mumbai 01 May 11 | 12:55 AM

Small companies, or companies with less than Rs 100-crore revenue, are likely to spend 32 per cent of their IT budget on business opportunity and 25 per cent on innovation in the current financial year, says an industry study.

According to a survey carried out by by Ernst & Young India for the CIO Klub, an association of chief information officers, larger companies would be spending less on IT his year considering the maturity of their operations. The third annual study titled, ‘The enterprise IT investment trends survey 2011,’ was released here last evening and is based on a survey of over 170 CIOs of companies with annual revenues of Rs 100 crore-over Rs 1,000 crore.

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"The survey reflects the confidence in the India growth story and many companies are taking steps to further increase IT spends with a focus on providing business with innovative IT solutions, being more customer-centric and investing in technologies that aid in giving their business a competitive edge," said E&Y partner and IT advisory practices leader, Samiron Ghoshal, while releasing the report.

This year, firms would spend 35 per cent of their total IT budget for IT system maintenance, 28 percent on enabling business operations to capitalise on business opportunities, 23 percent on innovative technologies to compete better and 14 percent towards compliance, says the survey.

According to the survey, the five top objectives of higher IT spend this financial year business alignment, business continuity, information security, customer management and cost reduction.

For over 70 per cent of CIOs from companies with under Rs 500-crore revenues, business alignment is the top priority for the current financial year, this is only 50 percent for the CIOs from companies with over Rs 1,000-crore revenues. The second top priority is business continuity with 54 per cent identifying this. Information security comes third, with 47 per cent of confirming this, while 69 per cent of CIOs from companies with revenues over Rs 1,000 crore this is the key priority. This is very low at 26 percent among smaller firms.

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