CIO Survey Reveals Booming IT Budgets in India but Highlights Skills Shortage

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CIOs in India are prioritizing digitalization and rivaling global top performers when it comes to their commitment to digital business, according to Gartner, Inc. Gartner’s annual global survey of CIOs found that average IT budgets in India are expected to grow 10.7% in 2017, nearly five times faster than the overall global average of a 2.2% increase. However, India is struggling with significant IT talent gaps. 

The 2017, Gartner CIO Survey gathered data from 2,598 CIO respondents in 93 countries and all major industries, representing approximately $9.4 trillion in revenue and public-sector budgets, and $292 billion in IT spending. Sixty five Indian CIOs responded to the 2017 Gartner CIO Survey. 

“India is one of the fastest-growing economies in the world, and Indian CEOs are looking to their CIOs to deliver on the promise of digitalization,” said Partha Iyengar, vice president and Gartner Fellow. “Indian CIOs are being given the budgets to invest in digitalization and the game-changing technologies that support it, but IT organizations remain immature in some respects and lack key resources. How Indian CIOs deal with the challenges caused by rapid business change and opportunities will help determine the future success of their enterprises.” 

When asked how much their company's revenue will grow in 2017, the Indian CIOs surveyed reported that they expected average revenue growth of 12.6%. This is much higher than the global average of a 4% rise in company revenue among respondents. 

The rapid growth in the IT budget poses an extra challenge for Indian CIOs, who will have to be even more creative than their peers elsewhere in finding the skills they need to pursue digital transformation. On the one hand, leaders have committed to using digital technology for business advantage, but skills and resources topped the list of worries at 21 percent. 

“Indian CIOs have the money to spend, but the availability of talent and skills necessary to implement key projects remains a significant challenge,” said Mr. Iyengar. “The lack of business analytics skills is a global concern, and one that Indian CIOs feel keenly with 35% of respondents listing it as a top talent concern. Twenty-five percent of Indian respondents list overall lack of skills as a top-three talent gap, compared with 12% of overall respondents. A quarter of Indian CIOs also reported a talent gap in digital business and marketing while 19% cited lack of specific technical skills.” 

“Indian companies have committed to digital business as resolutely as the world's top-performing enterprises,” said Mr. Iyengar. “Like their top-performing counterparts, Indian CIOs list digital business and growth or market share as their enterprises' top strategic business priorities through 2017. In fact, Indian CIOs say it even more emphatically with 37 percent listing digital business as a top priority compared to 28% of global top performers and 21% of all respondents.” 

These business priorities have altered the focus of Indian IT organizations. Indian CIOs mirror global top performers when asked what their IT organizations emphasize. For example, almost 9 out of 10 Indian CIOs stress support for digital business over optimizing IT costs, and almost 80% say they emphasize innovation over daily operations. 

The commitment Indian CIOs have made to digitalization, involves trade-offs and risks. Today, digitalization accounts for 23% of the total IT budget in Indian IT organizations which is more than typical performers (18%) but still significantly below top performers (33%). Indian CIOs plan to accelerate their funding of digitalization by 2018 to 35% of total IT budget compared to a predicted 43% among top performers. 

“The strong emphasis on digitalization by Indian CIOs comes at the expense of more conventional technologies. Infrastructure, data centers, information security and networking rank much lower among Indian CIOs than even the top performers,” said Mr. Iyengar. “This is likely an indication of the fact that Indian CIOs have focused on establishing the foundational capabilities over the past decade or so, and they are now concentrating on addressing the competitive challenges by aggressively investing in digital business.”

About Gartner 

Gartner, Inc. is the world's leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior information technology (IT) leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to supply chain professionals, digital marketing professionals and technology investors, Gartner is the valuable partner to clients in more than 10,000 distinct enterprises. Gartner works with clients to research, analyze and interpret the business of IT within the context of their individual roles. Gartner is headquartered in Stamford, Connecticut, U.S.A., and has almost 9,000 associates, including 1,900 research analysts and consultants, operating in more than 90 countries.