Predictions 2005

What the future holds

The golden quadrilateral and other projects of its ilk are reinvigorating the domestic market. The use of IT for business will be a key differentiator for companies that want to capitalise on this trend. by Shekhar Dasgupta

One word that best sums up the largest IT activity of the year 2004 is consolidation. We saw consolidation in the global software, hardware and the Indian business process outsourcing services (BPO) industries. This consolidation will result in better products, better service and therefore better choices for the customer in the long run— globally as well as in India. Last year, we also saw the launch of Data Hubs. These help organisations consolidate their data and information about customers or citizens and the financial status of a business. Moreover, we saw the emergence of technologies such as Grid Computing that help an organisation consolidate and optimise returns from its IT infrastructure.

2005: Information as the differentiator

In 2005, IT will need to cater to changing needs of customers. A definite reflection of this lies in the new, evolved approach to what has traditionally been known as Supply Chain Management (SCM). Businesses are now realising that they need to be able to assess emerging customer needs long before the procurement of raw material or the production cycle for sets of goods and services. Therefore, they expect more from their IT infrastructure.

The expectation from the IT Infrastructure is to accurately assess demand and adjust the supply chain accordingly. Therefore, traditional SCM has evolved into DDSN or the Demand Driven Supply Network. The biggest factor in a successful DDSN implementation is accurate and high quality information about customers, about the market and the business. In 2005, we will see 'Information' emerging as the differentiator for businesses. The success of a business will be directly proportional to the amount and quality of information that organisation's business managers have and the informed decisions that they take based upon available information.

That is only possible through a consolidation of existing structured and unstructured information within an organisation. Data Hubs and Service Oriented Architectures built with the help of the universally-accepted Business Process Execution Language (BPEL), which essentially helps companies get a consolidated view of information, will become important IT tools for business managers.

In 2005, we will also see IT infrastructure being used to increase business transparency. International norms in corporate governance will be adopted through the better use of IT infrastructure. Here again, accurate and up-to-date information will be key. Businesses will modify and restructure their IT infrastructure to capture and consolidate information across their operations. Furthermore, the demand for real-time information in banking and financial services companies, in government bodies dispensing services to citizen such as income tax and utilities, and the services sector in general, will dictate the use of a consolidated information architecture in a greater number of Indian organisations.

The launch of the industry association—Enterprise Grid Alliance—earlier this year, brought like-minded people in the world of grid computing together. As a technology, grid computing has been proven and should see widespread adoption in 2005. The Oracle Grid Index, a research study conducted by European research agency Quocirca, to measure commitment to grid computing across 609 companies in Europe, showed that thought leaders especially those in retail, financial services and utility companies were committed to using grid computing. We will see this effect trickling into the Asia Pacific region during 2005. Thought leaders in this region, including India, will start to explore the efficiencies and cost effectiveness offered by grid computing.

In India, one IT service that has acquired critical mass is the adoption of hosted infrastructure services by enterprises. We saw some big decisions taken for 'on demand' or 'IT infrastructure outsourcing' services by Bank of India and Bharti Telecom. We will surely see more outsourcing taking place in 2005.

As India integrates further into the WTO regime, there are two emerging opportunities opening up for the IT industry. The first involves the 7,500 small and medium sized companies in India. These companies operate in the automotive or auto ancillary, pharmaceutical, textile and agriculture-based or dairy products vertical segments. Global business options are opening up for these companies. They will be looking at IT to give them a competitive edge in the global market. The second sector that holds a lot of promise, especially with renewed government thrust, is the rural market. The slow and sure opening of rural markets will change the way large companies do business in the domestic market. This reinvigorated market will demand business changes that can be delivered by an efficient, robust and integrated IT infrastructure.

All in all, the phase of consolidation that started in 2004 will continue in 2005. This year will also see a more integrated global marketplace. Whether India betters its position in that market or not will depend on how many Indian companies emerge as thought leaders by adopting cutting edge technology.

Shekhar Dasgupta is the Managing Director of Oracle India.