India is undergoing massive economic growth. The country’s GDP grew 9.2% in fiscal 2006, second only to China among the major world economies. A recent Gartner survey held among more than 1,400 CIOs worldwide showed that IT budgets in India registered the highest growth of 16.19%, compared to a global average of 3.16%.

In the attempt to go global and expand business in the rupee appreciation phase, enterprises in India are looking at transforming their IT infrastructure. However, with rapidly emerging technologies, it has become difficult for organisations to choose an IT infrastructure that best suits their business needs.

IT investment has become a business imperative today. While CIOs of SMEs still face the heat in getting investments sanctioned, large enterprise CIOs are facing challenges in terms of utilising investments appropriately.

SMEs worried about ROI

Business needs drive IT investment for SMEs. However, getting IT budgets approved is not easy for IT heads of such organisations. Says Prakash Pradhan, Head IT, Jagsonpal Pharmaceuticals: “It is very difficult to sanction money for IT infrastructure. As we are into pharmaceuticals, our management teams are from a pharma background, with limited knowledge about IT. Unless and until there is a compelling need for an IT infrastructure, we don't go for it.”

While India SMEs today are showing keen interest in emerging technologies, most of them still don’t treat IT investment as part of their business investment. When deciding to invest in IT, these organisations consider various aspects such as ROI, training costs, after sales and service from the vendor, and manage and maintain the infrastructure costs.

Elaborates Arup Choudhury, senior general manger, Eveready Industries: “Enterprises would certainly show interest if companies can come out with a cost-benefit analysis that shows to what extent recurring expenses would come down on adopting these solutions.”

Managing cultural transformation

Large enterprises no longer have to struggle to get budgets sanctioned, but the real challenge begins after the budget is sanctioned. Managing the expectations and cultural transformation is what concerns CIOs of large organisations.

Says Satish Pendse, CIO, Hindustan Construction Company Limited: “The pressure is to manage expectations. We need to educate the organisation that investing in IT is just the first step towards leveraging its potential. Cultural transformation to leverage the potential of IT is a much bigger challenge and the CIO can't be the only person handling the same. It's a broader agenda that needs to be tackled through higher involvement by senior and top level management.”

While investing in a new technology, Gartner suggests that CIOs follow a business-focused model. By using a business justification model, balanced with seeking opportunities for innovation, IT leaders can more effectively communicate the business value from investments and, even more importantly, understand what emerging technologies should be used to support the business.

“IT decisions should flow out of an IT strategy that is aligned with the business strategy. They should ensure that the decisions are not led by a fancy for new technology or application,” concludes Radhakrishnan Menon, group head IT, Biocon Limited.