Computer products will still account for bulk of investments by SMEs in 2008-09.
The small and medium enterprises (companies with up to 999 employees) in India are set to spend over $8 billion (Rs 33,600 crore) in 2007-08 to beef up their IT infrastructure, which is 24 per cent higher compared with last year's $6.5 billion, according to a study by Access Markets International Partners.
While the computer products will still account for the bulk of investments, internet spending is fast increasing as these enterprises embrace IP-enabled business process services.
An increasing number of SMEs are planning to recruit more staff, invest in new facilities, push advertising/promotional campaigns and build their IT infrastructure.
The survey reveals that 93 per cent of the small enterprises (1-99 employees) and 86 per cent of medium enterprises (100-999 employees) saw an increase in revenues during the last year, with 15 per cent posting an overall increase of over 20 per cent.
"The growing awareness of computing technology and the benefits of Internet access have resulted in greater IT adoption among India's SMEs," said Neha Jalan, analyst at AMI-Partners.
"Indian SMBs view technology adoption as an effective strategy to overcome competition. While reigning in costs is still their primary focus, the phenomenal growth of the Indian economy has made SMBs optimistic about future business prospects," she added.
The analysts firm also noted that Indian SMEs are eagerly competing with international companies. They are looking at using technology as an enabler.
"About 15 per cent of the businesses said they will respond to increased competition by boosting their capital outlay and investing in new technology. Technology is viewed as a tool for competitive advantage."
