Analysis : Impact of  IT on Business

 In the last five years the Indian IT Industry has recorded a C.A.G.R (Compounded Annual Growth Rate) of more than 40.5% which is almost double the growth rate of the IT industry in many of the developed countries. Also India's compounded annual growth rate (C.A.G.R) of spending on telecom  was around 19.6%.(6) This is a good indicator of where investments are taking place. For IT to play an even greater role to impact Businesses in India this is a real good start. The business scenario within the country has gradually evolved and the credit goes to the government and the private sector. Business practices, infrastructure, knowledge base have all improved tremendously in the last decade. The Internet has wielded its magic as the great equalizer and in bringing distant  places together, has brought India closer to the rest of the world, thereby boosting its development efforts.

Composition of domestic IT market in India

The overall success of the IT industry in India has to some extent managed to spill over to other industries in the country. The Indian economy has grown at an average  rate of 6.0% a year in the last five years.(7) In India, the success of software industry can be attributed in no small measure to the excellent teamwork between Government and Industry. The Government of India, impressed by the excellent performance of the Indian software industry has provided all support, including fiscal benefits, the availability of high speed data communications and infrastructure, besides ensuring an almost red tape-free system. The government, in fact, has given the red-carpet treatment to this industry. The fiscal benefits include trade free zones, Software Technology Park schemes, zero import duty on software, and 100% exemption on profits from software exports.

Fortunately for India the phenomena of "reverse brain drain" is enriching its workforce with people having diverse international experience, knowledge of latest technology, management skills and much more. This has made it easier for MNC to set up their back offices in India.

The major sectors which are witnessing a special thrust for adoption of IT are Government administrations, Insurance, Banks, Energy, Financial Institutions, Defense, Public Tax System, Ports, Customs, Telecom, Education and Small Office Home Office / Individuals. Large sectors with slow IT penetration rate such as textile industry and healthcare are being encouraged by the government and the private sector to adopt IT. ERP implementations and systems integration continue to be at the forefront of IT growth in India.

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