New Delhi March 18 2013: As the four interconnected technology megatrends—Mobility, Social, Big Data and Cloud, dominate the next decade, the Indian IT industry has a compelling opportunity to bring a paradigm shift in the way technology gets adopted by businesses across verticals at lower costs and at scale, finds a study by the Boston Consulting Group on behalf of the confederation of Indian industry (CII).
The industry is expected to touch $ 100 billion in fiscal year 2013, approximately 7.5 percent of India’s GDP. There is an opportunity for the industry to work closely with the government to kick–start the economy, go back to the higher growth levels and help other industry verticals gain a competitive advantage in global and domestic markets, says the study.
The Indian IT industry is expected to witness about 12 percent growth over the next four years, to reach a market size of about Rs 18 trillion (1.8 lakh crores) by 2016. IT services and software products will lead this growth, due to an increase in IT adoption by companies, shift towards outsourcing and emergence of new technologies.
IT adoption across end user industries is not the same—some sectors like banking, telecom and insurance have leveraged IT across their business functions, including the back–end organizational processes, customer facing activities and revenue generating initiatives, and are at an advanced stage in IT adoption. Sectors like education, healthcare, media and retail are relatively low IT spenders currently, but are expected to significantly increase their expenditure on this front in the future.
The role of IT in organizations is expected to evolve from simply being “order takers” to transformative “business partners”. To effectively leverage the IT, Indian companies need to develop the required IT capabilities—need identification, value assessment, vendor management, governance models, and IT talent management. End user companies in India are unique and have expectations around cost, unique user needs, expect more touch points and high quality delivery.
The Government plays an important role in the IT market, both as a buyer and as a facilitator. In its role as a buyer, the Indian Government needs to catch up with the rest of the world on IT spending—it’s IT spends as a percentage of GDP have been significantly lower than Governments for developed economies. In recent years, Government has taken the right steps in some areas for example, UID, education. Going forward, Government needs to focus on providing more IT–enabled citizen services, improving efficiencies in the public sector, investing in disruptive technologies, standardizing data, and promoting shared services. These initiatives will need to be supported by a strong execution and governance model to effectively leverage IT.
Going forward, all key stakeholders—the end users, IT providers and the Government—need to work in close concert to tap the IT opportunity successfully.
There is opportunity to transform the business landscape with enhanced IT adoption, and in turn create a significant contribution to India’s GDP. End users, IT providers and Government will need to partner with each other to realize this vision.
BCG–CII REPORT ON IT ENABLEMENT OF INDIAN BUSINESS: IT for India — New Horizons, New Opportunities; March 2013: Download PDF