Indian firms are IT laggards, don't see IT as a game changer

by CXOtoday Staff    Mar 19, 2013

IT laggards

In spite of India being home some major IT companies, IT spends in India are significantly lower than other peer countries. Currently, Indian companies typically have a lower level of IT adoption than their global competitors. While there has been a lot of hype of how Indian companies view IT as a business enabler, the reality seems to be just the opposite.

According to the CII–BCG IT End User Survey 2013, most Indian companies have traditionally shied away from leveraging IT as a tool to achieve business goals. Several Indian companies still consider IT as a cost center, and not a driver for value addition and business growth. In order to control costs, companies tend to resort to hard negotiations, prefer integrated deals and press for outcome–based pricing models. Due to this mindset, companies could have eventually compromised on some key aspects of the implementation, to be able to accommodate costs within the allocated budget.

Additionally, a significant proportion of them still struggle to identify the potential opportunities offered by IT solutions. This has led to low priority for IT in business planning. This inability to envisage IT as a driver of business change has meant that Indian companies find it difficult to proactively identify IT requirements across various functions. As a result, the implementation and upgrades of IT solutions is delayed further, resulting in potential business losses.

Indian companies, being late adopters of IT, do not have historical investments in building IT capabilities for their businesses. As a result, they have not dedicated sufficient efforts to develop their internal IT capabilities. Many are finding it challenging to hire and retain top IT talent amid tough competition from IT providers who offer recruits foreign postings with attractive remuneration.

IT governance too has taken a back-seat with many Indian companies not having well–defined IT governance models. Decision making tends to be on a case–by–case basis, and companies find it difficult to manage IT with consistency and transparency.

In spite of such a grim scenario, there seems to be a ray of hope. The increasing importance of IT in business will also transform the role of companies’ internal IT teams, who would need to evolve from their current role of “doers” to “orchestrators”.

Companies are increasingly outsourcing traditional IT activities such as development of applications and management of networks and helpdesks. Internal IT teams of companies, therefore, need to focus on more strategic aspects such as understanding business requirements and proposing appropriate IT solutions and developing the target architecture. Supplier selection and negotiations, in a complex landscape of solutions and providers, will demand professional procurement techniques that have historically been used by corporate procurement specialists.

Organizations are increasingly looking at IT to transform their business—automating processes for faster speed and reduced costs, facilitating smooth interactions between parties and helping them manage increasingly large quantities of data to create a competitive advantage in their industries.

Tags: CII, BCG, IT firms