Gujarat SMEs increase IT spending by 20%

While their larger counterparts may be going slow on information technology (IT) spending, small and medium enterprises (SMEs) in Gujarat are raising their IT spend. According to IT hardware and software component providers, there has been a 15-20 per cent increase in IT spending among SMEs in the state in the past six months.

"These days, large industries are pretty cautious as far as increasing their IT spending is concerned. However, SMEs are not so prone to global economic upheavals and are growing domestically. Hence, they have increased their expenditure on IT infrastructure in a bid to become more competitive," says K J Thakker, committee member and immediate past president of the Ahmedabad Computer Manufacturers' Association.

Having increased their IT infrastructure budgets, in both hardware and software, a typical SME with sales revenues of Rs 50-100 lakh now spends around Rs 100,000 a year on IT. Further, an SME with a turnover of Rs 5-10 crore spends around Rs 10-12 lakh per year on IT expansion.

According to Rushabh Mehta of Ahmedabad-based Techniks Infotech, the rise in IT spending is also explained by clients' demands for advanced automation and operational efficiency through the use of industry-specific software.

Among SMEs, auto-ancillaries and engineering industries, followed by BFSI (banking, financial services and insurance), pharmaceuticals, telecom and textiles have seen some of the highest increases in IT spending.

"Both overseas and domestic clients have been demanding use of advanced ERP systems and other software. Plus, SMEs in Gujarat have become more aware of international standards in software upgradation, and are leaving no stone unturned to match those standards. Moreover, SMEs are more flexible than large enterprises as far as hiking the IT budget is concerned," Thakker added.

Investing in IT infrastructure has become an integral part of doing business today, said Himanshu Nandasana, managing director of Rajkot-based Bhavani Industries, which makes transmission components. "We are continuously investing in IT infrastructure. It improves our operational efficiency, and we keep ourselves abreast of new software available in the market, especially in the engineering and designing space."

He added that apart from the bigger companies, even smaller and medium-sized component manufacturers and engineering firms in Rajkot are changing with the times and investing in IT.