Smaller firms to spend more on IT innovation: E&Y Study

Smaller companies, with less than Rs 100 crore revenue, are likely to spend 32% of their IT budget on business opportunity and 25% on innovation in the current fiscal, says an industry study.

As per a survey carried out by by Ernst & Young India for the CIO Klub--an association of chief information officers --larger companies would be spending less on IT his year considering the maturity of their operations.
The third annual study titled, ''The enterprise IT investment trends survey 2011,'' was released here last evening and is based on a survey of over 170 CIOs of companies with annual revenues of Rs 100 crore-over Rs 1,000 crore.

"The survey reflects the confidence in the India growth story and many companies are taking steps to further increase IT spends with a focus on providing business with innovative IT solutions, being more customer-centric and investing in technologies that aid in giving their business a competitive edge," said E&Y partner and IT advisory practices leader Samiron Ghoshal while releasing the report.

This year, firms will spend 35% of their total IT budget for IT system maintenance, 28% on enabling business operations to capitalise on business opportunities; 23% on innovative technologies to compete better; and 14% towards compliance, says the survey.

As per survey, the five top objectives of higher IT spend this fiscal are business alignment, business continuity, information security, customer management and cost reduction.

For over 70% of CIOs from companies with under Rs 500 crore revenues, business alignment is the top priority for FY12, this is only 50% for the CIOs from companies with over Rs 1,000 crore revenues. The second top priority is business continuity with 54% identifying this.

Information security comes third with 47% of confirming this, while 69% of CIOs from companies with revenues over Rs 1,000 crore this is the key priority. This is very low at 26% among smaller firms.