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Indian firms spend less than 1% on IT
By siliconindia
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Friday, 29 October 2004, 19:30 IST
BANGALORE: Indian companies spend less than 1% of their revenue on information technology (IT) , compared to their counterparts in the developed world, where the average spend on IT is around 8% of revenues.
While the low spend on IT, in the past, was not a serious concern, it is suicidal in the current highly competitive scenario, said Ranganath Salgame, President, Cisco Systems India.
In his keynote address at Ciscos two day Showcase 2004 event being held here, he stressed on the importance of increasing IT spend for corporates.
Using sectors like banking and automotive to drive home his point, he said that some of leading Indian companies in both the auto and banking sectors, are now able to compete effectively with large global majors, due to their effective spend on IT.
For Indian companies looking at markets beyond the countries borders, a planned investment in IT is imperative for success, he said. While a clutch of Indian companies, having realised the critical role that IT plays in enhancing competitiveness, have embraced IT, vast majority are laggards.
Some companies, due to the increased competition are investing in IT in a reactive fashion, while many others are yet to react.