The Confederation of Indian Industry and the Boston Consulting Group (BCG) have published a report titled, ?IT for India ? new horizons, new opportunities.?
According to the report the domestic IT industry is expected to grow at 12 per cent over the next four years. The industry is expected to reach Rs 1,754 billion by 2016. The key growth drivers for the domestic IT segment will be services and software segments.
As per the report, the role of the IT functions within end user industries will evolve from ?order takers? to transformative ?business partners? as IT adoption picks up.
The report highlights the unique requirements of the Indian companies which makes it imperative for the IT providers to make their global products portfolio and delivery models suitable to the Indian companies? needs. Further, the report outlines an eight point action plan paving way for the active collaboration of key stakeholders ? end user industries, IT providers and the governmentt for greater IT adoption in India.
Neeraj Aggarwal, partner and managing director, BCG, says, ?The Indian industry is at an inflection point and one of determinants of the future trajectory will be the speed with which IT gets adopted. The IT spending in India is expected to grow at 12 per cent per annum, and the industry is expected to grow from Rs 997 billion in 2011 to Rs 1,754 billion in 2016.?
He adds, ?Businesses in India are not only looking at the traditional IT usage in their organisations, but are also showing keen interest in the next wave of technology ? cloud, big data and mobility ? which will help them leapfrog the technology adoption cycle.?
The key highlights of the report are:
User industries need to create a clear vision for the role of IT in their organisations with well defined roadmaps.
User industries need to strengthen their capabilities to manage IT effectively by enhancing the required IT related systems and processes.
IT providers and user industries need to work collaboratively to identify business needs and opportunities and work together to realise them.
To be successful in India, IT providers need to optimise their delivery model to lower costs.
The government has to step in to facilitate IT adoption through policies, programs and incentives.
The government should also facilitate development of quality IT workforce.
The government should partner with the private sector to leverage cutting edge IT and foster innovation along with building the required IT capabilities to plan its IT projects.
IT adoption across end user industries is not the same. Some sectors like banking, telecom and insurance have leveraged IT across their business functions. These sectors have undertaken functions like the back?end organisational processes, customer facing activities and revenue generating initiatives, and are at an advanced stage of IT adoption. Currently, sectors like education, healthcare, media and retail are relatively low IT spenders, but are expected to significantly increase their expenditure on IT in the future.
Several domestic IT companies have built strong IT capabilities in the last decade and currently boast of a global client base. While IT providers have the traditional pricing advantage in the global markets, the same may not be relevant for the domestic market. However, IT providers have the opportunity to play in value-added areas by serving as optimisation agents and transformation partners. They have the potential to deliver value to businesses through process improvements and technology?led transformations.
With an aim to employ India?specific strategies for the domestic market – IT providers are making efforts to understand the unique and evolving needs of the Indian end user industries. The IT providers are developing the required partner network, applying multiple cost levers and adapting innovative commercial models to tap business opportunities offered by the Indian companies.
Over the last few years, the government has taken encouraging steps to promote the use of IT in areas like education and projects like Unique Identification Number. Going forward, the government needs to focus on providing IT and IT?enabled citizen services, improving efficiencies in the public sector, investing in disruptive technologies, standardising data, and promoting shared services. These initiatives will need to be supported by a strong execution and governance model to effectively leverage IT.
Effective IT adoption by the Indian companies will be the key to realising the country?s potential growth in the gross domestic product. The use of IT is expected to improve labour productivity and help create employment opportunities.
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