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: A turnover of Rs 100-crore plus and yet no fixed budget for IT—that’s the tale at your average Indian medium-sized business. Now, medium-sized businesses (MB) are preparing for the next round of spending on IT in 2008-09—not only with desktops, notebooks and printers, but also connectivity and server deployments. With technology adoption greatly increasing while moving from small to medium-sized businesses, the IT spend in percentage terms of total revenue decreased in the case of the MB segment. While small businesses on an average spend one percent of their earnings on IT, medium-sized businesses are reluctant to shell out anything more than 0.55% with an average of 0.41% across verticals.

Typically, small businesses do not have a proper IT team in place nor an IT budget. In the medium businesses segment, most of them have a well-placed IT team. Let us look at the different sectors and understand how IT savvy they are.

The utilities/transportation/real estate/construction industry vertical turns out to be the least IT-savvy of all. Be it servers, security or software, this sector has been a laggard with regard to most technologies. On an average, companies in this vertical spend Rs 35.8 lakh on IT; this is 0.24% of the turnover.

Looking at server adoption in this sector, Windows servers show a 67% penetration compared to 88% in the wholesale/retail sector and 82% each in both manufacturing and IT/ITeS. The overall server deployment in this sector stood at only 88%, while all the other sectors had more than 94% server deployment.

However, with multiple offices in different locations, the need for connectivity was felt the most by companies in this sector. That’s why this vertical emerges as a leader in the adoption of ISDN, with 48% of the respondents confirming the deployment. The scenario is dominated by the use of leased lines with 61% adoption, and DSL with 41% adoption. The adoption of Wi-Fi is the least among all verticals.

TS Rajagopalan, director, Caliber Construction Co Pvt Ltd, says, “For accounting software, we use only Tally. For networking software, Windows-based software is used and as far as the hosted application is concerned, we run web-based servers.”

Most manufacturing units in India are often quite old and traditional in the way they function. Medium-sized businesses in manufacturing also fall under the same category with less importance given to IT. This sector has one of the lowest spend on IT with an average budget of only about Rs 67.6 lakh.

However, one area in which most manufacturers appear to be investing in is enterprise applications. About 68% of the respondents in the manufacturing sector already have ERP deployments—something that is now considered a de-facto standard in this industry vertical to ensure better operational efficiency. It also has

the highest rate of adoption of ERP across verticals; only BFSI comes close with 64%.

Bihar Sponge Iron Ltd has over 200 employees yet there are only 15 desktops in the organisation. The company spent about Rs 10 lakh on its IT infrastructure in 2007, and there are no plans for any big deployment this year. Susheel Kumar Bachheti, assistant manager, EDP, Bihar Sponge says, “Our work does not require much of IT and therefore, we have only 15 workstations. As regards connectivity, we have in place a gigabit Ethernet LAN. We are also using a DSL connection, offering a speed of 512 Kbps. Our basic requirement from the internet is communication through email with our branches.”

Apart from the basic infrastructure like desktops, notebooks and printers, the major technology areas upon which manufacturers spent most of the money were servers, connectivity, software and internet applications. For 2008-09, the top priorities listed by the respondents in manufacturing sector are laptops, notebooks, laser printers, accounting software and LAN.

The scenario is not very different in a medium-sized wholesale/retail organisation from its smaller counterpart. Technology is not yet a priority in this much-hyped industry vertical, which is the second lowest in terms of IT spend with companies in this vertical spending an average of Rs 56.4 lakh or 0.32% of their turnover on IT.

The survey respondents in this sector had an average of nine offices in different locations. While this sector scores lowest on leased line adoption (58%), it scores the second highest in terms of DSL deployment (71%), behind IT/ITeS (74%).

Jaipur Rugs is a 250-strong company that sells carpets and rugs globally. According to Yogesh Chaudhry, director Jaipur Rugs, “We spent over Rs 2 crore in 2007 on our IT infrastructure. We try to ensure that we use the best of technology and leverage it as far as possible. We already have basic IT infrastructure in place—with multiple servers running Windows and Linux, Wi-Fi connectivity and a Gigabit LAN. Now we are planning to invest in bar-coding and a virtual private network from Reliance to connect all of our branch offices.”

MK Retail is another company that vows by technology for its operational efficiency. Imtiaz, manager-IT, MK Retail says, “We have already implemented ERP software. 80% of the deployment has been completed, and only the financial module is pending. We are now in the process of upgrading the inventory control software. There is no hosted application as such that we use at present.” Some of the areas that most of the wholesale/retail companies are focusing on are desktops, notebooks, network software and Windows servers.

The BFSI sector has been very keen on the adoption of IT—with high investments going into building a robust IT infrastructure and ensuring its safeguard. The survey respondents in this sector spent on an average Rs 83.7 lakh on IT in 2007-08.

Kotak Wealth Management comes across as a good example of a well integrated IT infrastructure. The company has around 400 employees with an IT team of about 10 people. The company has deployed about 15 servers that run on different platforms depending on the applications running on them.

In terms of security, the company has in place almost all the security solutions from Trend Micro. “We rank security very high on our IT priority list,” says Nagraj Poojari, manager-IT, Kotak Wealth Management. The company follows a strict security policy. According to its terms and conditions, employees cannot access personal email accounts, certain websites are also blocked, and there is limited access to USB drives.

Poojari reveals, “We are now planning to invest about Rs 25 lakh on a NAS server for our growing database and about Rs 1 crore to switch from a large number of desktops to notebooks for marketing people who are constantly on the move.