Spend management is slowly gaining momentum for major IT and financial firms, following the appreciation of the rupee. Javier Urioste, international business advisory, Urioste, Mercy & Company, says “India is booming at this stage and it’s very important for the growing sectors like retail and banking to take cost management seriously because the tables can turn anytime.”
According to Ravi Kumaraswami, vice president and managing director, Asia Pacific, Ariba International, IT firms in India could have avoided losses had they hedged themselves. Hedging a currency costs around 1% of the entire transaction, which enables a firm to get a fixed value for dollar for the entire contract period with a customer, no matter what is the value of dollar. He further adds, “But IT firms in India never wanted to spend that amount and now they have seen a dip in their revenues by 10%.”
But slowly and gradually, the Indian banking and financial institutions (BFSI) segment is looking at it seriously. Arvind Kathpalia, group head-operations-technology & finance, Kotak Mahindra Bank, says, “Banks are growing at the rate of 30-40% and we are taking it very seriously with our strategic cost management by taking the advantage of technology and bulk buying.”
Aviva India, who has recently tied up with the Ariba for its spend management, says it was quite obvious for them to consider this, due to the rapid expansions happening in the BFSI segment. Abhay Johorey, director, Transformation & Services, Aviva India says, “We have implemented this recently and we have already seen a significant change in our ROI, identifying savings in the range of 8%-32% across key categories such as IT, printing, travel, training, infrastructure and transportation.”