Indian mid-market continues to be lucrative for IT services firms

Despite trying economic conditions, most midsized companies in India increased their IT budget in 2009 over the previous years. According to the latest study by IBM, over 50 per cent of Indian mid-market business decision makers expect their IT budget to increase this year over last year.

The study is based on a survey of 1,879 businesses and IT executives with companies that have between 100 and 1,000 employees across 17 countries including India.

A majority of Indian companies who participated in the survey cited that supply chain management (SCM), information management and security management as critical business priorities for improving their business performance and efficiency. It also said most mid-sized companies knew the importance of finding strategic IT partners who can collaborate with them to realise their vision, as “a go-it-alone strategy may hinder their chances for success”.

“Midsized companies in India are constantly innovating while deploying resources to create sustainable business value. They are investing in the future - making changes and taking risks to survive, compete - and thrive,” said Ramesh Narasimhan, director, General Business, IBM India/South Asia. India has over 35 million small and medium businesses, and many of the businesses are trying to expand their business beyond India.

Some of the common barriers to successful IT implementation at growing organisations are inability to implement and lack of required in-house skills in-house. Many such mid-sized firms work with IT providers and consultants to overcome these barriers.

About 70 per cent of such companies who participated in the survey have indicated that they prefer to partner an IT company with expertise in their business to help them work smarter, while 67 per cent look for partners that can provide the highest quality IT infrastructure solutions. Most companies said that even in today’s unsettled global economy, they would continue to innovate and grow through technology investments in India.

“In today’s globally-integrated economy, it is necessary to enhance customer relationships and collaboration, and to create efficiencies across

supply chains and core business operations,” added Narasimhan.

However, globally, the study shows that a large percentage of organisations are rethinking their IT budget, though they are not reducing it. About 64 per cent of the global firms surveyed said their IT budgets might remain the same or even might increase for the coming fiscal year.