NATIONAL: Top Indian Firms SpendRs 7,123 Crore On IT

Top Indian companies spent Rs 7,123 crore on deploying information technology systems
in 2006-07, a growth of 27 percent over the previous year. This was revealed in the fifth
Dataquest-IDC MegaSpenders 2007 survey carried out by CyberMedia publication Dataquest and
IT intelligence firm IDC India. The survey involved 226 organizations across 11 verticals.

Each year, this survey studies the IT spend from 200-plus top-spending enterprises in
India. Commenting on the findings of the survey, Prasanto K Roy, Chief
Editor—Dataquest said, "The survey points to a healthy growth in IT investments
beyond the banking, financial services and telecom sectors. Sectors like utilities,
automobiles, and discrete manufacturing were equally aggressive in investing in IT."

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PRASANTO K ROY:
"Sectors like utilities, automobiles, and discrete manufacturing were equally
aggressive in investing in IT"

Average spend up by 0.7%

The survey revealed that the marginal decline in IT spends projected in 2007-08 is due to
reduction in costs of IT inputs. "IT MegaSpenders of India Inc set the tone for the
domestic market, which had annual growth of 27 percent for the previous three years,"
Roy added.

The average IT spend in proportion of a company’s turnover went up to 0.7 percent
in 2006-07 from 0.6 percent the previous year since adoption of IT increased and spread
across all hierarchies within the organization. BFSI, IT/ITeS sector are projected to
invest 1.19 percent and 1.58 percent of their revenues on IT in 2007-08. The surveyed
organizations had an IT spend per employee of Rs 34,000.

The average IT investment by an ‘IT megaspender’ Indian company was Rs 34
crore in 2006-07, and is expected to grow by 26 percent to Rs 43 crore this financial
year. Interestingly, more than half the top 50 spenders on IT during 2006-07 were PSUs.

BFSI and telecom, biggest spenders

The IT investment of Rs 2,646 crore by 35 banks, financial institutions and insurance
companies was the highest among the mega spenders. Top 15 mega spenders from the BFSI
sector also made it to the Top 50 IT spenders of the survey.

These included Bank of Baroda, Bank of India, Canara Bank, Centurian Bank, HDFC Bank,
ICICI Bank, IDBI Bank, Indian Overseas Bank, ING Vysya Bank, Karnataka Bank, Punjab
National Bank, State Bank of India and Syndicate Bank. The four insurance firms, LIC, New
India, Oriental and United India also made to the Top 50 IT spenders.

The telecom sector comprising eight firms pumped in Rs 2,314 crore on IT during
2006-07, making the highest average IT investment of Rs 289 crore for each company. These
included Aircel, Bharti, BSNL, Hutch, MTNL, Reliance Communications and VSNL. IT
investments by the telecom sector are projected to increase to Rs 3,031 crore this year.

The sunrise IT and ITeS sector invested Rs 652 crore during the last financial year.
This resulted in 23 mega spenders, including MphasiS, NIIT, TCS, Wipro from the IT and
ITeS sector investing an average of Rs 34.32 crore. Overall, about 42 percent of the total
spend on IT was on hardware while expenditure on packaged software and services software
stood at 26 percent each.

In 2006-07, the top five specific technologies inducted by companies included
mail-messaging solutions, security solutions, wide area networks (WAN), enterprise
resource management (ERM) and virtual private networks (VPN). Next year, business specific
application like core banking in BFSI, engineering applications in automobile and
implementation of ERM and CRM across verticals would be the drivers of IT spend, according
to the survey. The slowest growth in terms of expenditure on IT is expected from the oil
and petrochemicals sector.

DQC NEWS BUREAU