How to Plan Your Next IT Purchase

It's that time of the year, when most companies have closed their books for the last

financial year and have declared their annual results. The planning for the current financial year has been tough for most SMEs. Thanks to the economic slowdown, everyone has faced heavy budget cuts. The mantra for this fiscal therefore is:?How to do more with less??That’s exactly where IT?can help, and in order to help you decide what to deploy in IT, we bring you this cover story.

Our cover story this time is divided into two parts. The first part is on the results of a survey that we conducted of around 260+ Indian SMEs situated across five cities, namely Jaipur, Noida, Gurgaon, Kolkata, and Hyderabad. The survey was done to understand the state of IT deployment they already had, and what did they plan to deploy in IT in the near future. The results are of course very interesting, and would be useful for most Indian SMEs. It would help them understand what kind of IT?purchase are their peers doing, thereby helping them plan their own IT purchase properly.

The second part of our story this time, is a logical follow on to the strategy survey. Just knowing what others are deploying isn’t enough. You also need to understand how to choose the right IT products yourself. That’s why the second part contains buying guides of about 8 different types of IT?products. We’ve talked about what to look out for when purchasing products in those categories, how they will benefit your business, key buying tips, etc. Plus, we also have a special feature on power conditioning equipment, which talks about the need to deploy equipment like UPSes, surge protectors, and so on.

IT?Purchase Strategy Survey

To find out what SMBs plan to buy in the current financial year, we surveyed over 260 companies across Jaipur, Kolkata, Hyderabad, Gurgaon and Noida. The organisations that participated in our survey were a mix of manufacturing, IT/ITeS, export houses, retail, consultants, banking and financial units.

Around 60% of the respondents were key IT decision makers, while the remaining were IT purchase influencers. Most of th em had IT budgets, which varied from 1 to 10L?per year to more than a Crore a year. 50% of them had IT?budgets of upto 25 lakh. Another 25% of so could spend from 25L to more than a Crore. Another quarter of the respondents didn’t wish to disclose their IT?budgets.

Current IT?Usage Trends

We first tried to determine how IT savvy were the respondents to our survey, and found that a majority of the SMEs were still using a basic accounting package. Penetration of other business applications like ERP, CRM, SCM, etc is still fairly low. We were even more surprised to find that only around 60% of them had a dedicated email setup in place, and another 40%?or so had a website. The rest were still relying on free email ids probably. Amongst other business applications, ERP continued to remain at top, with 25% of the respondents already having deployed it. The remaining business app deployments were all below 20%. Here, the highest deployments were for HRM (Human Resources Mgmt), followed by CRM (Customer Relationship Mgmt), and then SCM (Supply Chain Mgmt).

Future IT Purchase Trends

Next we tried to understand what were the SMEs planning to deploy in the near future. Here, our concentration was mostly on the hardware and basic infrastructure side of things. We found that PCs, laptops, and servers topped the IT?uprchase list in that order. This was followed by a broadband connection, and then other hardware was considered.

City-wise findings

Majority of SMBs, except in Jaipur are already running their own mail servers. Most still haven't deployed a CRM solution, and same is the case with HRM solutions throughout these five cities. Overall, ERP deployment is less than 30%, with a handful of respondents from Noida and Hyderbad claiming that they have already deployed the same. SMBs in Gurgaon seem to be more web savvy as majority of them have web presence through their own website and also have mail servers within their premises. Close to half the respondents are already running basic accounting applications in all cities barring Noida, where less than a quarter have deployed them. Possibly they’re using more advanced accounting solutions, because they have easy access to the same, owing to the city’s proximity to Delhi. And even though SMBs are starting to deploy HRM apps, the deployment rate still remains low, at less than 40%.

Other than Gurgaon, all other cities have PCs on top of their buying list, followed by notebooks, whereas in Gurgaon, notebooks come on top, followed by security equipment, which incidently is quite low in demand in the other four, more so in Noida. After Gurgaon, notebooks had high demand in Hyderabad, followed by Kolkata, Noida and Jaipur. Also, while SMBs in Hyderabad, Noida as well as Gurgaon plan to invest more on servers, those in Kolkata plan to invest in PCs, notebooks and broadband, which clearly indicates that SMBs in Kolkata still lack the basic infrastructure. Apart from Noida, not many SMBs plan to invest in server racks. Likewise, demand for network equipment seems high in Gurgaon as compared to other cities with the lowest investments expected in Jaipur and Hyderabad. Server demand pretty much seems uniform across all cities. Similar to investment plans for servers, compaines also plan to spend on broadband. Finally, coming to storage devices, Gurgaon plans to invest heavily in them followed by Noida, Hyderabad and Kolkata, with smaller investments expected from Jaipur.