A STUDY ON PROBLEMS FACED BY IT INDUSTRY IN MADURAI.
Submitted in partial fulfillment of requirement for the award of the degree of Master of the Business Administration of Madurai Kamaraj University
By R.INFANT MYCHILINE PRIYA (Reg No.: 2K10MBA14)
Under the guidance of Mrs. M. Nagarenitha, MBA, M.Phil, (PhD)
DEPARTMENT OF MANAGEMENT STUDIES FATIMA COLLEGE (AUTONOMOUS) (WITH POTENTIAL FOR EXCELLENCE) RE-CREDITTED WITH A GRADE BY NAAC MARY LAND MADURAI-625018 JAN- 2012
This is to certify that the work entitled A STUDY ON PROBLEMS FACED BY IT
INDUSTRY IN MADURAI. is a bonafide record of work done by R.Infant Mychiline Priya(2K10MBA14)
Submitted in partial fulfillment of the requirement for the degree of Master of Business Administration of Madurai Kamaraj University.
Director Department of Management Studies
(Mrs. M. Nagarenitha, MBA, M.Phil, (PhD))
(Dr. Mrs. P. Uma, BE, MBA, PhD)
FATIMA COLLEGE (AUTONOMOUS) DEPARTMENT OF MANAGEMENT STUDIES MADURAI-625018.
I hereby declare that the work done under the title A STUDY ON PROBLEMS FACED BY IT INDUSTRY IN MADURAI submitted for the award of the Degree of Master of Business Administration is my original work and that no part of this project has been submitted fully or partly for any other recognition earlier.
Signature of Student
(INFANT MYCHILINE PRIYA.R)
First and foremost I would like to thank God almighty whose blessings made me to complete the project successfully. It is a great pleasure to acknowledge my sincere thanks to DR.REV. Sr. Josphine Nirmala Mary, Principal, Fatima College, Madurai for giving this great opportunity. It is a great pleasure to acknowledge my sincere thanks to Sr. Celine Sahaya Mary, Dean, Professional Courses, Fatima College, Madurai for giving the opportunity to get practical knowledge about our theoretical studies. I also thank Mrs.P.Uma, Director, Department of Management Studies for the successful completion of this project work. I indeed greatly thankful to my faculty guide Mrs. M. Nagarenitha I thank her for guiding me to successfully complete my project work. I express my sincere gratitude towards Mr. Sivarajah Ramanathan for giving me permission and also I extend my thanks to guide me to do this project in Winways Systems Pvt Ltd, Madurai.
I wish to express my gratitude to all the staff members in the Department of Management Studies for their encouragement for completing this project. Finally I thank my teachers, owner-managers, friends and parents who helped me in completing my project successfully.
INTRODUCTION 1.1 Introduction About the Topic 1.2 Industry Profile 1.3 Company Profile 1.4 Need of the Study 1.5 Scope of the Study 1.6 Objectives 1.7 Limitations of the Study 13 14 16 22 23 24 25
REVIEW OF LITERATURE
RESEARCH METHODOLOGY 3.1 Research Meaning 3.2 Research Design 3.3 Method of data collection 3.4 Research Instrument or Tools 30 30 31 32
ANALYSIS AND INTERPRETATION
FINDINGS SUGGESTIONS CONCLUSION
110 112 113
List of tables S.NO Title of the table PG.NO
1 2 3 4 5 6 7 8 9 10 11
Gender Wise Classification of the Respondents Reason for Choosing IT Field Reason for Choosing Madurai for Setting IT Business Level of Importance for Innovation Proficiency of Project Planning and Fund Requirement Analysis Difficulties Faced by the Concerns When Starting the Business Type of Finance the Concerns Received from the Initial Stage Requirement of Funds in Next 3 to 5 Years Accessibility of Funds from External Sources Procedure for Accessibility of Funds from External Sources Proficiency of the Professional Marketing Concepts and Right Application of Them to Products and Services
36 38 40 42 44 46 48 50 52 54 56
12 13 14 15 16 17
Positioning of Brand Name of Product or Service Reasons for Loyalty of Customers to the Products or Services Pre-launching Survey Marketing Problem Opinion Towards Exposure Initiative to Travel7
58 60 62 64 66 68
18 19 20 21 22 23 24 25 26 27 28 29 30 31 3233
Preferences of Seminars that the Concerns Need to be Availed Preference to Travel to Other Cities Brand of Computer Systems Used by the Concerns Speed of the Broadband Service Provision of Same Speed Variation of Speed Provided by the Broadband Service Frequency of Changes in the Software used Level of Open Source Adoption Frequency of Servicing the Computer Systems Concerns Point of View about the CSR Activities Concerns Engaging in the CSR Activities Concerns that Face Problems in Engaging CSR Activities Chi Square Test- Type of Ownership of the Concern and the Type of Financial Arrangements Made Availed Chi Square Test- Current Phase of Marketing and Mode of Marketing Percentage Analysis- Preference of Broadband Service Provider for its Features Two Way ANOVA- Preference and Level of Satisfaction of Services on Broadband Service Weighted Average Level - Importance Towards the CSR Activities
70 72 74 76 78 80 82 84 86 88 90 92 95 99 102 103 106
Weighted Average Level - Proficiency Towards the Management Strategies Weighted Average Level - Satisfaction Towards the Management Skills
List of charts
Title of the chart
1 2 3 4 5 6 7 8 9 10
Gender Wise Classification of the Respondents Reason for Choosing IT Field Reason for Choosing Madurai for Setting IT Business Level of Importance for Innovation Proficiency of Project Planning and Fund Requirement Analysis Difficulties Faced by the Concerns When Starting the Business Type of Finance the Concerns Received from the Initial Stage Requirement of Funds in Next 3 to 5 Years Accessibility of Funds from External Sources Procedure for Accessibility of Funds from External Sources Proficiency of the Professional Marketing Concepts and Right Application of Them to Products and Services Positioning of Brand Name of Product or Service Reasons for Loyalty of Customers to the Products or Services Pre-launching Survey Marketing Problem
37 39 41 43 45 47 49 51 53 55
12 13 14 15
59 61 63 65
16 17 18 19 20 21 22 23 24 25 26 27 28 29
Opinion Towards Exposure Initiative to Travel Preferences of Seminars that the Concerns Need to be Availed Preference to Travel to Other Cities Brand of Computer Systems Used by the Concerns Speed of the Broadband Service Provision of Same Speed Variation of Speed Provided by the Broadband Service Frequency of Changes in the Software used Level of Open Source Adoption Frequency of Servicing the Computer Systems Concerns Point of View about the CSR Activities Concerns Engaging in the CSR Activities Concerns that Face Problems in Engaging CSR Activities
67 69 71 73 75 77 79 81 83 85 87 89 91 93
Global IT products and services market is at an estimated size of $ 1.5 trillion today. It is estimated that the share of IT in the GDP of nations will exceed that of any other industry in the next ten years. There is a great deal of inter-dependency even as fiercer competition emerges in a rapidly growing market. It is increasingly a border less world, due to the interactivity provided by the Internet and telecom infrastructure.
But there is only limited number of entrepreneurs who start their IT businesses in Madurai due to many problems that hinders their growth in Madurai. So there are less number of IT Companies in Madurai as compared to Chennai and Bangalore.
So to remove the obstacles for the entrepreneurs the root cause of the problem should be identified. Hence this study was conducted which would help entrepreneurs to start more IT businesses in Madurai which will contribute to the economic condition of Madurai.
INTRODUCTION ABOUT THE TOPICThe IT sector has become one of the most significant growth catalysts for the Indian economy. The sector is estimated to have grown by 19 per cent in the FY2011, clocking revenue of almost US$ 76 billion. But as compared to Chennai, Bangalore the growth of IT industry in Madurai is relatively low. This is due to various reasons. One of the reasons is low investment capital. Whether the company is brand new or setting up an additional operation, business owners need to have a sufficient amount of capital on hand. Using business financing, such as debt or equity, may not be possible if the business is overextended on its external financing possibilities. Business financing may also not be possible if the company does not have a strong financial history. The next reason is limited economic resources or business inputs may create a difficult environment when setting up a business or additional operation. Traditional economic resources are land, labor and capital. In economic markets already saturated with software products or services, setting up an additional business may create even scarcer availability of resources. Even if resources are available in large quantities, new businesses may not have access to them depending on the agreements in place for existing companies currently using these resources. Another reason is a business usually requires individuals to conduct significant market analysis to determine the potential demand for the companys software products or services. Attempting to reach a small target market may not allow the company to earn the most profits on the sales of its products. Smaller markets also may subject to substitute or inferior products, decreasing the companys market share through competition. So to identify problems and other challenges in the IT industry the study has to be conducted.
Information Technology (IT) industry in India is one of the fastest growing industries. Indian IT industry has built up valuable brand equity for itself in the global markets. IT industry in India comprises of software industry and information technology enabled services (ITES), which also includes business process outsourcing (BPO) industry. India is considered as a pioneer in software development and a favorite destination for IT-enabled services. The origin of IT industry in India can be traced to 1974, when the mainframe manufacturer, Burroughs, asked its India sales agent, Tata Consultancy Services (TCS), to export programmers for installing system software for a U.S. client. The IT industry is originated under unfavorable conditions. Local markets were absent and government policy toward private enterprise was hostile. The industry was begun by Bombay-based conglomerates which entered the business by supplying programmers to global IT firms located overseas. During that time Indian economy was state-controlled and the state remained hostile to the software industry through the 1970s. Import tariffs were high (135% on hardware and 100% on software) and software was not considered an "industry", so that exporters were ineligible for bank finance. Government policy towards IT sector changed when Rajiv Gandhi became Prime Minister in 1984. His New Computer Policy (NCP-1984) consisted of a package of reduced import tariffs on hardware and software (reduced to 60%), recognition of software exports as a "delicensed industry", i.e., henceforth eligible for bank finance and freed from license-permit raj, permission for foreign firms to set up wholly-owned, export-dedicated units and a project to set up a chain of software parks that would offer infrastructure at below-market costs. These policies laid the foundation for the development of the world-class IT industry in India. Today, Indian IT companies such as Tata Consultancy Services (TCS), Wipro, Infosys, and HCL et al are renowned in the global market for their IT prowess. Some of the major factors which played a key role in Indias emergence as key global IT player are:
Indian Education System The Indian education system places strong emphasis on mathematics and science, resulting in a large number of science and engineering graduates. Mastery over quantitative concepts coupled with English proficiency has resulted in a skill set that has enabled India to reap the benefits of the current international demand for IT. High Quality Human Resource Indian programmers are known for their strong technical and analytical skills and their willingness to accommodate clients. India also has one of the largest pools of English-speaking professionals.
Competitive Costs The cost of software development and other services in India is very competitive as compared to the West.
Indian IT industry has also gained immensely from the availability of a robust infrastructure (telecom, power and roads) in the country. In the last few years Indian IT industry has seen tremendous growth. Destinations such as Bangalore, Hyderabad and Gurgaon have evolved into global IT hubs. Several IT parks have come up at Bangalore, Hyderabad, Chennai, Pune, Gurgaon etc. These parks offer Silicon Valley type infrastructure. In the light of all the factors that have added to the strength of Indian IT industry, it seems that Indian success story is all set to continue.
Winways Systems Pvt Ltd is a socio-commercial organization, working based on the ideology of knowledge freedom. Winways Group is engaged in well-defined knowledge based business concepts having adherence to open knowledge principles. They strongly believe in freedom of knowledge. They support sharing of intellectual resources. They are actively involved in research, execution, sharing and collective enhancement of knowledge systems such as software development, education, publishing and other knowledge based services. They work for justified commercial opportunities. Like any world-class service organization, they do have all systems and structures to extend dependable solutions and services to their clients. Winways is operating in the areas of Open Source/Linux Solutions, Web Solutions, Training, Human Resource and Publishing. Their divisions are strategically positioned as independent, domain focused business units with clearly defined brand identity.
Vision Statement To become a highly valued and ethically dependable, Intellectual Resources Management company, recognizable by the highly placed global organizations. Explanation for the Vision Statement Highly valued represents higher brand reputation. Ethically dependable represents quality, integrity, honesty and customer centric. Recognizable represents penetration through marketing excellence. Highly placed represents top ranking. IT enabled Intellectual Resources Management represents Winways will always focus on business concepts based on the brainpower enriched by Information Technology.