State SMEs hike IT spending

When the likes of Microsoft, IBM, and DELL launch a slew of products targeting the small and medium enterprises (SMEs) in Gujarat, they have a reason to do so.

From an IT spending of mere 5-10 per cent of their total cost, SMEs in Gujarat have increased their expenditure to over 40 per cent. What's more, according to industry sources, the rise in IT spending is as recent as 3-6 months.

"While everyone was struggling with the downturn in the country, many of the SMEs in Gujarat were looking at opportunities to grow in both domestic as well as global market. It was then that they realised the importance of technological advancement and the need for development in their IT infrastructure and began spending a lot on the same," said Nirav Shah, director of Jayatma Informatics Private Limited and president of Gujarat Electronics and Software Industries Association (GESIA)

Industry sources cite desire to be in global trade as well as increased IT awareness among SMEs as the reason for the rise in their spending on IT.

"Earlier, less creative work used to happen in SMEs in Gujarat. But now, with the awareness increasing among them, more and more SMEs are talking about things like ERP, SAP, software upgradation and international standards. With an increased desire to be in the global trade and match their products with international standards, several of them have increased their spending on IT," said KJ Thakkar, president, Ahmedabad Computer Manufacturers' Association (ACMA).

According to Thakkar, "A few months, SMEs used to spend only 5-10 per cent of their total cost on IT and ITeS. But now, the spending has gone up to as high as 30-40 per cent of their total cost."

For instance, Dishman Pharmaceuticals has increased its budget for IT by 5-6 times. "We are currently implementing SAP and are also negotiating other hardware with HP and IBM. At the same time, as compared to last year, our IT budget has risen by 5-6 times. Most of the SMEs in Gujarat are traditional family businesses, but now increasingly they are finding the need for standardisation which has made them increase their spending on IT," said Ameesh Pareekh, vice president - IT and Communications, Dishman Pharmaceuticals.

Almost 50 per cent of the monthly Rs 100 crore turnover of ACMA comes from SMEs, added Thakkar.