T G DHANDAPANI, CIO, TVS Motor
Falling value of rupee is a major concern for every Indian organization especially whose business is “net import”, i.e., where the import is more than exports in terms of value. This fall affects significantly the input cost negatively and propels the inflation. In terms of IT cost, most of the IT devices are imported be it servers or networking equipment. But the impact of this increase in total IT cost will not be that significant as content of import and dependent IT cost is in general around 10-15 percent. Significant portion of IT cost namely IT staff cost, operating cost, etc., are paid in rupee terms.
The severe problem is slowing down of economy. Local demand has come down due to severe inflationary pressure, which is not directly connected to fall in rupee value. Higher spending on basic necessities leave very little amount for the average Indian to spend on comforts and luxuries leave alone savings. With current good monsoon and election spending next year, Indian economy will revive and put the growth back to 7 percent plus.
In my opinion, the fall in rupee is a temporary phenomenon and will get corrected soon.
In these uncertain times, I would advise fellow CIOs the following: Plan for IT spending very cautiously. Do not initiate the project for sake of technology but based on business importance and ROI. Focus on optimizing implemented projects and running and ensure all intended benefits are obtained. This is a good opportunity to go closer to users and work closely with CxOs. They will be keen to share their pain points.