I’m currently in the process of wrapping up a report on midmarket IT budgets and spending trends in India for the 2013-2014 fiscal year (April 1, 2013 to March 31, 2014). For this report, we collected extensive data from 430 midmarket businesses (those with 400 to 2,500 employees) in the country to examine IT and business priorities among IT decision-makers. In addition to analyzing spending plans across standard IT categories (software, hardware, and services), we also analyze the likely impact on IT spending of key initiatives, including computing, mobility, and big data.

Despite increasing economic and political uncertainties in India, our survey found that midmarket companies are continuing to invest in IT to drive competitive differentiation. Our survey also signaled a changing attitude among Indian midmarket companies who are increasingly viewing IT as a means to better engage digitally enabled constituents. This is fueling a fundamental shift in the way Indian midmarket firms interact with customers. Here are some key highlights from the report:

  • The majority of Indian midmarket firms will increase IT spending in 2013-2014. Among all the companies surveyed, 61% of firms surveyed expect to increase their spending on IT by 5% to 10% in the current fiscal year. New IT initiatives and expansion of capacity will contribute to an increase in IT capital budgets as the current fiscal year’s budget is evenly split between new IT initiatives and expansion of existing capacity to better support growth initiatives. The need to modernize infrastructure and improve business applications to grow business will drive hardware and software spending from Indian midmarket firms.
  • The key business driver behind technology investments is to meet increasing customer expectations. More than three-quarters of surveyed firms identified meeting the rising expectations of customers to grow company revenue as a critical or high business priority. Lowering overall operating costs is further down the list of priorities for the 2013-2014 fiscal year, considered a critical priority by only 13% of midmarket firms. This highlights the shift in spending patterns in India as customer centricity overrides lowering operating costs as a priority for firms:

  • As consumerization pushes IT assets outside of enterprise firewalls, firms are challenged with security threats to customer information. They are equally challenged to extract the greatest possible business value from customer data. These fundamental shifts will drive investments in security and analytics.
  • Disruptive technologies are finding a foothold. Our survey found mobility, big data, and as-a-service gaining momentum in India’s midmarket. Mobile applications are becoming a critical channel for customer engagement in India, where the population is younger and the mobile Internet user base is growing by more than 30% annually. While big data investments will rise in the current fiscal year, the main focus will be on reducing costs and improving asset utilization with limited focus on customers.

The current economic trends in India coupled with the increasing demands and expectations of digital customers are redefining the way business is done. The success of Indian midmarket firms increasingly depends on leveraging business technology to connect with customers and generate growth. Firms must clearly define business outcomes (focused on increases in sales, revenue, customer acquisition, customer satisfaction to name a few) of their IT investments to win in the age of the customer.  

I will be publishing series of blog posts in the coming weeks sharing more data and analysis from the survey. Stay tuned!