Digital transformation technology strategy, digitization and digitalization of business processes and data, optimize and automate operations, customer service management, internet and cloud computing
According to a report by the credit rating agency of CareEdge IT spending can be expected to be resilient in the near to medium term. In addition, broad trends in demand outlook in the Indian IT industry along with technology-driven spending will continue during FY23, says in the report.
The digital transformation initiatives grew manifold during the pandemic, with a much greater resilient of the need for digitization and data-driven solutions, and this trend is expected to continue going forward. This augurs well for the IT services industry.
According to CareEdge, cloud computing, artificial intelligence, cybersecurity, data analytics, and IoT among others are expected to be the key focus areas going forward.
However, a slowdown in the key markets of the US and EU, uncertainties arising from the global macro-economic slowdown and currency volatility can potentially play spoilsport with respect to corporations spending on technology, and may lead to postponing some of these spends.
With significantly increased employee attrition levels across most players, there has been a surge in employee costs. This is the single largest expense item for the sector, and will potentially impact the operating margins of the players, the report said.
Client Additions
Overall, the Indian IT industry witnessed a strong client addition during FY22 supported by vendor consolidation, and various initiatives like cloud adoption and digital transformation agendas by clientele across various verticals. The industry has been re-aligning its offerings to cater to the evolving requirements of its clients with respect to the emerging technologies in order to become more effective in the dynamic business environment.
The IT companies expanded their products and service offerings to cater to the new demands of an expanding set of clients with a focus on delivering customer-centric solutions. During FY22, IT majors have seen a strong progression of client addition in existing as well as new geographies and verticals. The client wins in the higher deal-size buckets have significantly increased, the report said.
IT is a strategic differentiator: In the face of restrictive lockdowns and stay-at-home orders, IT budgets have held up remarkably well as technology becomes a critical ingredient in launching new products and services.
· In the second and third quarters of 2020, 60% of IT leaders significantly or moderately increased their annual technology budgets while only 22% significantly or moderately reduced their IT spending in the last two quarters.
Business priorities dictate IT investments: The leading technology investments in the April 2020 survey were information security and compliance, big data and analytics, and public and multicloud infrastructure. These priorities have broadly remained the same in the October survey, but remote work and collaboration have grown in importance.
● What is front and center for IT budgets?
The critical priorities for IT leaders include information security and compliance (59%), remote work and collaboration (55%), public and multicloud infrastructure (50%), and monitoring and management (42%). The pandemic has made digital touchpoints a critical differentiator for customer interactions while resilient technology infrastructure remains a priority for employees working remotely.
● What performance monitoring tools did IT teams buy in 2020? In 2020, technology leaders focused on the following tools to ensure compelling customer and employee experiences.
○ Artificial intelligence for IT operations (57%) solutions help technology practitioners maintain the uptime, reliability, and performance of technology services with contextual, actionable, and predictive insights.
○ Digital experience monitoring (50%) tools put a clear spotlight on business transactions and customer journeys by surfacing end-user interaction insights for complex enterprise services.
○ Network performance monitoring and diagnostics (50%) tools ensure responsive network infrastructure with instrumentation analytics and visualizations for device, flow, and packet-level data.
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