IT investment in Indian retail firms & banks - part.1 and IT expenditure in Indian industries - part.2

Abstract

As Indian markets are getting inundated with more and more firms, companies have to go the extra mile to differentiate themselves from their competitors. Information Technology has become a very important tool by which companies differentiate themselves and gain a competitive edge over their competitors at the same time helping new comers a potent platform of equal footing with the established players. In this study, we have focused on the Indian banking and the retail sectors to understand the broad trends and challenges that firms face in the technology driven era in terms of choosing, using and gaining from investments in IT. Using a combination of secondary and primary research involving interviews with select firms, we have made certain inferences and conclusions. The Banking sector still remains the sector receiving the maximum IT investment. This trend, reflected world wide, started in India post Liberalization wherein the Multinational companies and the new private sector banks shook the public sector out of its inertia. While banking sector in India has attained sufficient maturity in terms of their technology adoption, the Retail sector is in a nascent stage and will be one of the fastest growing sectors in the coming years. This is mainly because more and more organized retailers are starting shop in the country. Organized retailers have grown by 135% in terms of revenue between 2002 and 2005. With this kind of growth happening, IT investments are becoming more of a strategic decision, a thought shared by Mr. Sudhakar, CEO, Fabmall. Given this context we believe that looking at IT investments in these two industries will provide a fairly diverse set of views and some interesting observations.