Gartner Inc. has announced that India's ICT market is estimated to grow at a five-year compound annual growth rate (CAGR) of 20.3% to reach $24.3 billion, or nearly 2% of the country's gross domestic product (GDP), by 2011. This growth will be driven by Indian chief information officers (CIOs), who are continuing to build and consolidate the basic IT infrastructure, in addition to small and midsize businesses, which are (SMBs) increasingly leveraging technology to drive business growth and efficiency.

Based on the findings of the Gartner EXP Worldwide Survey of CIOs, Indian firms report stronger than average IT budget increases of around 13% versus the world average of 3.3% for 2008. This increased spending by Indian CIOs is directed primarily towards building new business capabilities, with 30% of IT spend allocated for business growth and 19% towards business transformation.

As Indian companies continue to increasingly take on global competition overseas as well as at home, Indian CIOs will need to re-examine their business models and processes to transform their IT organisations.

According to Peter Sondergaard, global head of research, Gartner, "Enterprise expectations of IT have been building over the past three years. The increase in IT spending is driven by business priorities that need CIOs to drive distinctive, customer-focused solutions. CIOs need to become more tolerant of risk and innovation, and flexible to meet changing market and customer demands."

According to Gartner, Indian firms are spending their budgets more on hardware and software than people. The Gartner EXP CIO Survey shows that CIOs in India share similar priorities to CIOs worldwide.

Partha Iyengar, head of research - India, Gartner explains, "As the Indian economy continues to experience steady growth, most sectors have to deal with rising consumer expectations and competition - both at domestic and global levels. Furthermore, India’s structural cost advantage is eroding, given the upward pressure on local wages and the weakening of the US dollar. Hence it is a business imperative for Indian companies to meet the demands of domestic competition and to offer value propositions that are attractive to offshore customers. In this context, Indian companies have to create distinctive solutions using IT to transform their business and garner a competitive edge."

"To create distinctive solutions, Indian CIOs need to extend their strategies, metrics, personnel and leadership approaches," said Iyengar. "They must recognise how the enterprise needs to change to serve customers in unique ways, generate operational returns and develop new products and services. These are the areas in which IT can make the difference. Making the difference will require new skills, roles and relationships within the enterprise, and new approaches to delivering business- relevant solutions."