IT Implementation Trends in Indian Companies

This time, we received project nominations from more than 150 unique

companies. Apart from asking for the project details, we also asked them their

annual IT spends. The figures, as expected, were mind boggling. Around 40% of

the companies told us their annual IT spending, and it accumulated to a whopping

sum of Rs. 3,800 Crores. Out of this, BFSI was the heaviest spender, taking up

61% of this figure. This was followed by manufacturing at 19%, govt. at 11%, and

IT/ITES at 6%.

If we were to extrapolate the above data, then the total IT spending for all

the IT companies that nominated their projects would go well beyond Rs. 10,000

Crores per year! The next most obvious quest for us was to determine where this

whopping amount was being spent, so we decided to go about analyzing IT project

deployments across different industries.

The manufacturing, BFSI, Govt, and IT/ITES industries remain the leading

users of IT. Out of these four, we received the maximum projects from

manufacturing companies, followed by banking and financial services sector. If

we combine insurance projects with banking, then it overtakes the manufacturing

segment and becomes the number one adopter of IT. Next in line were IT/ITES

organizations and the government, followed by education, power and retail

segments.

Action in the Banking segment



IT has created a tremendous impact on the banking segment. The biggest

evidence of this is the fact that most of us living in urban India have

forgotten all the pains we used to go through while banking in the olden days.

No more standing in long queues thanks to 24-hour cash availability from ATMs,

no more keeping track of so many bills and their deadlines thanks to immediate

balance transfers and bill payments over the Internet, no more worrying about

opening new accounts when shifting to a new location thanks to any-branch

banking, etc. These are all facilities that banks have made available, and

moreover, most of us have started taking them for granted. These have all been

possible thanks to the heavy usage of IT that the banks are doing. So the

obvious question is-what next? Where do banks go from here?

If the IT implementations we saw among banks this time are anything to go by,

then you can be rest assured that there will be a lot more action coming from

this segment in the near future. For instance, over the past two years alone,

we've seen more than 60 different IT projects deployed across 21 leading Indian

banking and financial services institutes. That's a ratio of 1:3, which is the

highest across any industry. The trend is to use technology to enhance reach.

Using Tech to enhance reach



Core banking deployments are now an old story, because most leading banks

have already 'been there, and done that'. The new mantra or trend is to enhance

reach. This is being done in two ways with the help of technology. One is to

reach out to new customers in new markets more effectively, and the other is to

reach out to existing customers in existing markets.

Tapping New Customers in New Markets



Currently, the three hot markets for banks are rural India, SMBs, and

overseas customers. Larger banks that already have presence in rural India and

smaller cities are at an advantage here, because for them, it's just a matter of

extending their core banking solutions to those branches, and start promoting

their products and services. That's exactly what some of them are already doing.

The others have to first establish their presence in these new markets and then

go to the next step. There are many challenges associated with this, like

obtaining licenses to open new branches, establishing secure connectivity,

setting up an IT infrastructure and integrating the new branches with the

central core banking application, etc. Most banks are in the process of doing

all this.

Tapping the overseas customer has its own set of challenges, because you

don't know whether your product or service will sell in the new market. Even if

it does, you have to ensure that it complies with the country's norms.

Tapping Existing Customers in Existing markets



The other part of enhancing reach is to tap existing customers in existing

markets. This is easier said than done, because existing customers are far more

demanding. They require better customer service, newer and more appealing

products and services, and what's more, they have many banks to choose from.

This becomes a challenge for most banks, and the solution is innovative use of

technology. We're seeing banks go that extra mile and offer newer, better, and

more customized services. For this, banks are offering mobile based banking

facilities, better integration between different services, and newer services in

general. So today, you can perform many banking operations with your mobile

phone. You can see your bank, credit card, demat, and even insurance accounts,

all from the same interface. We're seeing new initiatives like wealth management

services, which allow you to see all your investments in a single place. We're

also seeing newer applications that allow faster processing of loans for speedy

disbursal.

It's not possible to offer new services without putting your own house in

order first. So banks have to ensure that their IT infrastructures don't get

stretched and data centers overflow with too much equipment due to so many new

services. At the same time, they have to ensure that they comply with new govt.

policies. That's why banks need to constantly keep upgrading and optimizing

their base IT infrastructure, to save space, improve utilization, become more

compliant, and reduce costs. In fact, this time, 60% of the banking projects we

received were for IT infrastructure, which included things like Green IT,

information systems, messaging and collaboration, migration to better

technology, storage and data management, security, networking, virtualization

and consolidation, project management, compliance frameworks, etc.

One area where more attention is needed possibly is customer service, and a

CRM package alone won't be sufficient there. We've all heard horror stories of

people committing suicide for being haunted by loan recovery agents, and just

about everyone today gets repeated phone calls from banks for the same issue

over and over again. Technology alone won't answer these concerns, though it

would be a key enabler. Let's see what banks do in the future.

IT in Indian Manufacturing Companies



According to many sources, India's manufacturing base is the fastest growing

in the world, and not without good reason. There's a huge domestic market, which

is booming. Indian consumer spending is on the rise, which is naturally creating

a demand for products. Looking at this, most multi-nationals are eyeing India as

an attractive manufacturing hub, due to availability of both cheap labor and

skilled manpower. All of these are positive signs for Indian manufacturing

companies, and they need to leverage this advantage.

However, it's not as if everything is hunky dory and that there are no issues

to watch out for. If there's so much demand in the market, there's also fierce

competition, both internal as well as from China. The only way to combat this

situation is to become more agile by using better technologies, improving the

infrastructure and automating internal processes. Thankfully, this has started

happening, which is indicated by the kinds of IT deployments being done by

Indian manufacturing companies.

What's being deployed?



While the banking segment has the widest variety of IT projects being

deployed, the Indian manufacturing segment has the widest variety of companies

out there. For instance, this time we received nominations from 18 different

types of manufacturing companies, ranging from automobile manufacturers to oil

and gas, ceramics, textiles, coal, consumer electronics, furniture, paints,

paper, spirits, steel, tyres, and many others.

On the IT deployment front, only one word resounds loudly when it comes to

Indian manufacturing companies-ERP. That's the going trend amongst most Indian

manufacturers. Over the past two years alone, we've received around 80 IT

project nominations from Indian manufacturing companies. Out of these, 45% were

ERP deployments.

This time alone, we received 32 IT projects from 27 different manufacturing

companies. Out of these, 50% were ERP deployments. But then, ERP isn't the only

type of deployment happening in this booming sector. Manufacturing companies are

also using IT for business process management and automation, CRM for customer

management, e-learning solutions for internal manpower training, green IT to

save costs and the environment, and the usual IT infrastructure optimization and

implementations, which includes networking, security, storage and data

management, online portal solutions, etc.

Larger manufacturing setups are of course, going beyond the basics to

implement solutions for projects management, integrating complete supply chains,

logistics and fleet management solutions, and so forth.

IT usage in the IT/ITES segment



Innovation is the word that comes to mind when we think of IT implementation

within the IT/ITES sector itself. This is only natural because these are the

companies that offer IT solutions to the rest of the industries. So they

obviously have to be ahead of the pack when it comes to creativity, innovation,

and better usage of technology. Otherwise, they can't offer innovative solutions

to others.

We received around 24 project nominations in this segment, and many of them

were making heavy usage of technology for IT infrastructure optimization and

management. Technologies being used by this segment need no introduction. Name

the latest technology and you'll have it here-Web 2.0, virtualization and

consolidation, SOA, remote computing and management, green IT, mobility, etc.

IT usage in the Govt.



The Indian govt. remains a big spender on IT as usual, and most of the

investment continues to go in automation projects and information systems.

Interestingly though, the govt. has also started using IT more innovatively.

We've seen several creative applications of the same in some of the projects

this year.

Last year, we saw SMS based solutions being used by utility companies for

remote meter reading. This year, things have gone a step further and utility

companies are doing on the spot meter reading and issuing the bill to the

customer as well. Likewise, GIS and SMS are also being put to some incredible

uses. For instance, some of the water departments in India are using GIS and SMS

based solutions to monitor water reservoir situation in the country, and SMS is

also being used to file and manage citizen grievances.

We've talked about some of these projects in our story, but the bottomline is

that the govt. has started putting IT to some very innovative usage. The only

thing that doesn't seem to be happening is replication of a successful model

across the govt. We still see many govt. departments reinventing the wheel.

Hopefully, things will gradually settle down.

IT usage in other industries



ERP once again seems to be the most popular type of project deployment across
most industries. More than 25% of the projects we received this time for other

industries were ERP implementations. The other two types of projects that other

industries are deploying include business process management and automation, and

online portal solutions.

The industries that are becoming active in embracing IT are fairly

well-known, and therefore come as no surprise. Nevertheless, the ones we found

to be more active than others include education, insurance, media and

entertainment, power and utilities, and retail.