Download pdf - A Study on Problems Faced by It Industry in Madurai

1

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

2

CERTIFICATE

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.

Faculty Guide Director

Department of Management Studies

(Mrs. M. Nagarenitha, MBA, M.Phil, (PhD)) (Dr. Mrs. P. Uma, BE, MBA, PhD)

3

FATIMA COLLEGE (AUTONOMOUS)

DEPARTMENT OF MANAGEMENT STUDIES

MADURAI-625018.

DECLARATION

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.

Place: Madurai Signature of Student

Date: (INFANT MYCHILINE PRIYA.R)

4

ACKNOWLEDGEMENT

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.

5

CONTENTS

Chapter No

Particulars

Page

I

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

II

REVIEW OF LITERATURE

26

III

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

6

IV

ANALYSIS AND INTERPRETATION

35

V

FINDINGS

SUGGESTIONS

CONCLUSION

110

112

113

BIBLIOGRAPHY

114

APPENDIX

115

7

List of tables

S.NO Title of the table PG.NO

1 Gender Wise Classification of the Respondents 36

2 Reason for Choosing IT Field 38

3 Reason for Choosing Madurai for Setting IT Business 40

4 Level of Importance for Innovation 42

5 Proficiency of Project Planning and Fund Requirement Analysis 44

6 Difficulties Faced by the Concerns When Starting the Business 46

7 Type of Finance the Concerns Received from the Initial Stage 48

8 Requirement of Funds in Next 3 to 5 Years 50

9 Accessibility of Funds from External Sources 52

10 Procedure for Accessibility of Funds from External Sources 54

11 Proficiency of the Professional Marketing Concepts and Right Application of

Them to Products and Services

56

12 Positioning of Brand Name of Product or Service 58

13 Reasons for Loyalty of Customers to the Products or Services 60

14 Pre-launching Survey 62

15 Marketing Problem 64

16 Opinion Towards Exposure 66

17 Initiative to Travel 68

8

18 Preferences of Seminars that the Concerns Need to be Availed 70

19 Preference to Travel to Other Cities 72

20 Brand of Computer Systems Used by the Concerns 74

21 Speed of the Broadband Service 76

22 Provision of Same Speed 78

23 Variation of Speed Provided by the Broadband Service 80

24 Frequency of Changes in the Software used 82

25 Level of Open Source Adoption 84

26 Frequency of Servicing the Computer Systems 86

27 Concerns‟ Point of View about the CSR Activities 88

28 Concerns‟ Engaging in the CSR Activities 90

29 Concerns that Face Problems in Engaging CSR Activities 92

30 Chi Square Test- Type of Ownership of the Concern and the Type of Financial

Arrangements Made Availed

95

31 Chi Square Test- Current Phase of Marketing and Mode of Marketing

99

32 Percentage Analysis- Preference of Broadband Service Provider for its Features 102

33 Two Way ANOVA- Preference and Level of Satisfaction of Services on

Broadband Service

103

34 Weighted Average Level - Importance Towards the CSR Activities 106

35 Weighted Average Level - Proficiency Towards the Management Strategies 107

36 Weighted Average Level - Satisfaction Towards the Management Skills 108

9

List of charts

S.NO Title of the chart PG.NO

1 Gender Wise Classification of the Respondents 37

2 Reason for Choosing IT Field 39

3 Reason for Choosing Madurai for Setting IT Business 41

4 Level of Importance for Innovation 43

5 Proficiency of Project Planning and Fund Requirement Analysis 45

6 Difficulties Faced by the Concerns When Starting the Business 47

7 Type of Finance the Concerns Received from the Initial Stage 49

8 Requirement of Funds in Next 3 to 5 Years 51

9 Accessibility of Funds from External Sources 53

10 Procedure for Accessibility of Funds from External Sources 55

11 Proficiency of the Professional Marketing Concepts and Right

Application of Them to Products and Services 57

12 Positioning of Brand Name of Product or Service 59

13 Reasons for Loyalty of Customers to the Products or Services 61

14 Pre-launching Survey 63

15 Marketing Problem 65

10

16 Opinion Towards Exposure 67

17 Initiative to Travel 69

18 Preferences of Seminars that the Concerns Need to be Availed 71

19 Preference to Travel to Other Cities 73

20 Brand of Computer Systems Used by the Concerns 75

21 Speed of the Broadband Service 77

22 Provision of Same Speed 79

23 Variation of Speed Provided by the Broadband Service 81

24 Frequency of Changes in the Software used 83

25 Level of Open Source Adoption 85

26 Frequency of Servicing the Computer Systems 87

27 Concerns‟ Point of View about the CSR Activities 89

28 Concerns‟ Engaging in the CSR Activities 91

29 Concerns that Face Problems in Engaging CSR Activities 93

11

ABSTRACT

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.

12

INTRODUCTION

13

CHAPTER-1

INTRODUCTION ABOUT THE TOPIC

The 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 company‟s 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

company‟s market share through competition.

So to identify problems and other challenges in the IT industry the study has to be conducted.

14

INDUSTRY PROFILE

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 India‟s emergence as key global IT player are:

15

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.

Infrastructure Scenario

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.

16

COMPANY PROFILE

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.

17

Mission Statement

Offering solutions by converging the thoughtfully derived Intellectual Resources with the

available technological resources in order to produce synergic results for the clients, at ethically

justified investments and working with them continuously as intellectual partners, in progress.

Explanation for the Mission Statement

Converging represents the right blend of ideas and technology.

Synergic Results represents, producing outputs that are excellent in nature with high

productivity orientation.

Ethically Justified represents, maintaining ethical standards in pricing, quality, support

any other relationship terms.

Continuously in progress represents, l continuously working with clients to make sure

that the investment made by them is justified and ensuring productivity.

Their Commitment

Every member of Winways will constantly work for emotional and rational satisfaction of their

clients, team members, share holders, business associates, facilitators and any other form of

relationship with the true thought of sincerity.

Management Philosophy

The greatest asset for the organization is people. Empathy is the key thought process in personal

relationships. Enrichment of human relations with positive attitudes would take care of all other

aspects of the organization.

18

Quality Policy

They are committed to deliver quality products and services, on time and within

justified investments of the clients.

They shall always give topmost priority to the expectations and rights of the client in

every business transaction.

They shall put committed efforts to offer not just service but overwhelming service in

terms of quality, performance, delivery schedule and value for money.

Their satisfaction is to make the client feel proud in ownership of Winways products and

services and Winways becomes their undisputed Choice for repeat business.

They shall continuously concentrate on improving their quality standards and

productivity.

They shall achieve the reputation for quality by means of integrity, honesty, self-respect,

courtesy, transparency and empathy towards customers, suppliers, employees, investors

competitors and any others concerned.

Message of Logo

The name Winways suggests that the entire organizational system is thinking, acting and

living with Positive Attitude in all aspects. Positive Attitude is nothing but Winning

Ways.

The Sun Flower represents the Flexibility Nature of the management system to adopt to

the changing trends and conditions.

The Blossoming Position of the Sun Flower represents the Ever fresh Visionary

Thoughts for an upwards growth.

The two Upper Petals represent the Quality and Innovation, the core ingredients in all

their solutions.

The two Lower Petals represent Customer Confidence and Investor confidence, which

are the lifelines of the organization.

19

The Red Head on the alphabet “I” represents the Positively Synergic and Ethically

Principled mindset of every individual who builds the organization.

Software Industries Development Association [SIDA] Profile

It is obvious that in the IT success story of Tamilnadu, Madurai and the southern districts have

missed the opportunities in the past while other cities like Chennai and Coimbatore enjoyed the

maximum benefits. Now, the current trend indicates a slow recovery from a global recession,

which is a natural phenomenon as far as any economy, is concerned. But, IT still remains a

highly potential industry, which can fuel the economy and we feel that Madurai should have its

share of benefits at least now. SIDA with a vision of making this a reality would strive to create

an appropriate ecosystem and convivial climate to enhance the growth of the IT sector in

Madurai and the southern parts of Tamil Nadu.

Vital information and growth oriented support is required for the development of IT companies

in this part. A paradigm shift in the overall thought process is a must for the overall development

of the industries operating in this part. SIDA would function as the resource center for the benefit

of IT companies and other businesses interested to venture in IT.

Presence of mega corporate establishments and major government projects are very vital for the

overall development in this region. SIDA will also strive to attract big investments and also rope

in IT related government initiatives to this region.

As far as the student outputs are concerned, it is well known that a majority of the outstanding

employees in leading IT firms in Chennai and Bangalore are products of higher educational

institutions in southern Tamil Nadu. The so called, `creamy layer‟ of students aim at finding jobs

in bigger cities, where the opportunities are more. Another category of students have sound

technical knowledge but lacking in their attitudinal skills to fit into a dynamic environment.

SIDA will aim at bridging the gap between these categories of students. Efforts will be taken for

creating suitable career opportunities for the brilliant students and at the same time we also work

towards creating career development opportunities for the other category.

20

In recent times, the concepts of information Technology are often misused by criminals.

Criminals are cheating entrepreneurs through many schemes and plans mainly in the small BPO

segment. Investors are losing their hard earned money and also peace of mind. SIDA will

provide right kind of expert advice on the technological ventures, investment opportunities and

legal aspects to safeguard the interest of entrepreneurs and general public.

SIDA will build bridge between Industry, Academy and Users to enhance the utility of IT and

develop new opportunities for the benefit of all concerned. SIDA will organize conferences and

exhibitions for upgrading the IT resource base of this region.

SIDA will coordinate with government departments to promote the e-governance practices,

which would help the general public to enable speedy and corruption free transparent

transactions with government organizations.

21

NEED

SCOPE

OBJECTIVES

&

LIMITATIONS

22

NEED FOR THE STUDY

The IT sector has become one of the most significant growth catalysts for the Indian economy.

But as compared to Chennai, Bangalore the growth of IT industry in Madurai is relatively low.

So the study has to be conducted to identify the problems that hinder the growth of IT industry in

Madurai and suggest solution to the problems.

23

SCOPE OF THE STUDY

This study helps to identify the problems in the Finance, marketing, infrastructure &

connectivity, exposure, corporate social activities and management strategies faced by IT

industry in Madurai

This study helps in enhancing the growth of IT industry in Madurai by giving suitable

suggestions to solve the existing problems in IT Industry of Madurai.

24

OBJECTIVES OF THE STUDY

1. To study the problems that hinders the growth of the IT industry in Madurai.

2. To analyze the reasons behind the problems

3. To offer suggestions to the policy makers

25

LIMITATIONS OF THE STUDY

1. The study has not considered all the functional areas

2. The study is limited to Madurai city.

3. Getting response from the respondents was time consuming.

26

REVIEW OF

LITERATURE

27

CHAPTER-2

REVIEW OF LITERATURE

1Prof. A.K. Sengupta, Director, Institute of development studies university of Lucknow

has stated that Small and Medium Enterprises face problems relating to project

implementation, production, marketing, finance, administration etc.

2Ashish Arora opines that obtaining finance is, however, a major concern for firms

developing software products. In contrast to services, a substantial investment is required

to develop the product, and even more to market the product. Firms that are trying to

develop software products have faced problems in getting finance, in part because the

inexperience and conservatism of Indian venture capital funds. And good communication

infrastructure is considered vital for the continued growth of the industry. This is most

obviously the case in software service exports, and especially for offshore software

development. Overall, the data communication infrastructure in India is expensive and in

limited supply.

3Jon Birger Skjærseth states that large revenues from extractive industries may

undermine economic, political and social development in developing countries; a

problem coined as the `paradox of plenty‟. The problem calls for innovative rather than

proactive corporate responses.

4Awino Zachary Bolo states that differentiation is a business strategy where firms attempt

to gain competitive advantage by increasing the perceived value of their products or

services relative to the perceived value of other firm‟s products or services (Genessa M.

Fratto et al, 2006).

28

REFERENCES:

1. Prof. A.K. Sengupta, Director, Institute of development studies university of Lucknow on

June 2009, the study of the problems of sick small scale industries in Uttar Pradesh and

suggested strategies for their revival, institute of development studies university of

Lucknow.

Website: http://planningcommission.nic.in/reports/sereport/ser/ser_ssi.pdf

2. Ashish Arora, V.S.Arunachalam, Jai Asundi, Ronald Fernandes on Feb 2000, the

Indian Software Industry, Carnegie Mellon University.

Website: http://www.heinz.cmu.edu/project/india/pubs/rndmgmt.pdf

3. Jon Birger Skjærseth, Kristian Tangen, Philip Swanson, Atle Christer Christiansen, Arild

Moe, and Leiv Lunde on July 2004, Limits to Corporate Social Responsibility, Fridtjof

Nansen Institute, Lysaker Norway.

Website: http://www.fni.no/doc&pdf/FNI-R0704.pdf

4. Awino Zachary Bolo, PhD., on August 2010, Challenges facing the implementation of

differentiation strategy at the mumias sugar company Limited, University of Nairobi,

Kenya.

Website: http://www.aibuma.org/proceedings/downloads/Awino1,%20Kenya.pdf

http://planningcommission.nic.in/reports/sereport/ser/ser_ssi.pdf

http://www.heinz.cmu.edu/project/india/pubs/rndmgmt.pdf

http://www.fni.no/doc&pdf/FNI-R0704.pdf

29

RESEARCH

METHODOLOGY

30

CHAPTER-3

RESEARCH METHODOLOGY

Introduction

Research refers to the search for knowledge. It can also be defined according to Clifford woody

research companies of defining and redefining problems formulating hypothesis or suggesting

data making deduction and reaching conclusions and at last carefully testing the conclusions to

determine whether they fit the formulating hypothesis.

Research methodology is a way to systematically solve the research problem. It may too

systematically as a science of studying how a research is done scientifically. In it we study the

various steps that are generally adopted by researcher in studying his research problem along

with the logic behind them

Research Design

The formidable problem that follows the task of defining the research problem is the preparation

of design of the research project, popularly known as “Research Design”.

Decisions regarding what, where, how much, by what means concerning an inquiry or a research

study constitute a research design.

“A research design is the arrangement of conditions for collection and analysis of data in a

manner that aims to combine relevance to the research purpose with economy in procedure”.

Type of Research

Type of research used in the study is Descriptive research.

All items in any field of inquiry constitute a „universe‟ or „population‟. A complete enumeration

of all items in the „population‟ is known as census inquiry. It can be presumed that in such an

31

inquiry, when all items are covered, no element of chance is left and highest accuracy is

obtained.

The Universe

From a statistical point of view, the term “Universe” refers to the total of the items or units in

any field of inquiry. The Universe can be finite or infinite.

This study covers the finite Universe of IT Companies in Madurai as 42 in number.

Sampling design

A sample design is a definite plan for obtaining a sample from a sampling frame. It refers to the

technique or the procedure the researcher would adopt in selecting some sampling units from

which inferences about the population is drawn.

Type of sampling technique used

Sampling technique used here is census survey.

Data collection

Sources of Data

Primary Data

Secondary Data

Primary Data

The Data observed or collected directly from first-hand experience. The primary data was

collected by interviewing a cross section of 42 IT companies in Madurai with the help of

standard and detailed questionnaire.

32

Secondary Data

Data for the study was collected through Company websites, previous projects and other

websites.

STATISTICAL TOOLS

Statistics is the science of the collection, organization, and interpretation of data. It deals with all

aspects of this, including the planning of data collection in terms of the design of surveys and

experiments.

The study involves the following statistical tools for analyzing the research data:

PERCENTAGE ANALYSIS

It is the method to representative raw streams of data as a % for better understanding of collected

data.

Percentage of respondents = No of respondents × 100

Total no of respondent‟s

WEIGHTED AVERAGE

The term weight stands for relative importance of different items. Weights have been assigned to

various ranks.

Formula

X̄= ∑XW/ ∑W

Where X is weighted arithmetic mean X and W is weight attached to the variable value.

33

CHI-SQUARE

It is a quantitative measure used to determine whether a relationship exists between two

categorical variables.

Formula

χ2

=∑ (O-E) 2

/ ∑ E

Where χ2 is

the Chi-square statistics, O is the observed frequency and E is the expected

frequency. Where E = Row total * Column total / No of observations

TWO WAY ANOVA

This technique is used when the data are classified on the basis ofwo factors.

Formula

Correction Factor = (T) 2

n

Total SS= ∑Xij2 - (T)

2

n

SS Between Columns treatment = (Square of total of each column/ no. of items in that column)-

(T) 2

n

SS Between Rows treatment = (Square of total of each row/ no. of items in that row)- (T) 2

n

34

SS residual (or) error = Total SS – (SS between columns + SS between rows)

Degrees of freedom for total variance = (c.r-1)

Degrees of freedom for variance between columns = (c-1)

Degrees of freedom for variance between rows = (r-1)

Degrees of freedom for residual variance = (c-1) (r-1)

Where c = no. of columns

r = no. of rows

35

ANALYSIS

AND

INTERPRETATION

36

CHAPTER-4

DATA ANALYSIS AND INTERPRETATION

INTRODUCTION:

A study on problems faced by IT Industry in Madurai. The main focus of the study is to identify

problems prevailing in IT industry that hinders its growth and solve them by using relevant tools.

PERCENTAGE ANALYSIS

It is the method to representative raw streams of data as a % for better understanding of

collected data.

Percentage of respondents = No of respondents × 100

Total no of respondent‟s

TABLE 1

Gender Wise Classification of the Respondents

GENDER FREQUENCY PERCENTAGE

MALE 41 97.6

FEMALE 1 2.4

Total 42 100

Inference:

From the above table it is inferred that out of 42 respondents, 97.6 % of the respondents are Male

and 2.4% of the respondents are Female.

It indicates that most of the owner-managers of the IT companies in Madurai are Male.

37

CHART 1

Gender Wise Classification of the Respondents

38

TABLE 2

Reason for Choosing IT Field

REASON FOR

CHOOSING IT

FIELD

FREQUENCY PERCENTAGE

CHALLENGING 10 23.8

BASED ON

QUALIFICATION

11 26.2

PASSION 12 28.6

MORE PROSPECTS 6 14.3

OTHERS 3 7.1

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 23.8% of the concerns chose the IT

field due to challenges, 26.2% of the concerns chose the IT field based on qualification, 28.6% of

the concerns chose the IT field based on passion, 14.3% of the concerns chose the IT field based

on more prospects and 7.1% of the concerns chose the IT field based on other reasons.

It shows that most of the owner-managers of the IT companies chose the IT field for passion.

39

CHART 2

Reason for Choosing IT Field

40

TABLE 3

Reason for Choosing Madurai for Setting IT Business

REASON FOR

CHOOSING

Madurai


AVAILABILITY OF

LABOR

6 14.2

GORVERNMENT

ECONOMIC

INCENTIVES

1 2.4

TAXES - -

REGULATIONS 1 2.4

NATIVITY 34 81

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 14.2% of the concerns chose Madurai

city due to availability of labor, 2.4% of the concerns chose Madurai city due to government

economic incentives, 2.4% of the concerns chose Madurai city due to regulations, 81% of the

concerns chose Madurai city due to nativity.

It exhibits that most of the owner-managers chose Madurai for setting their IT business due to

nativity.

41

CHART 3

Reason for Choosing Madurai for Setting IT Business

42

TABLE 4

Level of Importance for Innovation

IMPORTANCE FOR

INNOVATION


NOT AT ALL

IMPORTANT

- -

NOT VERY MUCH

IMPORTANT

3 7.143

NEUTRAL 5 11.905

SOMEWAHAT

IMPORTANT

15 35.714

VERY MUCH

IMPORTANT

19 45.238

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 7.143% of the concerns not at all give

importance for innovation, 11.905% of the concerns neutrally give importance for innovation,

35.714% of the concerns somewhat give importance for innovation, 45.238% of the concerns

very much give importance for innovation.

It specifies that most of the concerns give very much importance for innovation.

43

CHART 4

Level of Importance for Innovation

44

TABLE 5

Proficiency of Project Planning and Fund Requirement Analysis

PROJECT

PLANNING AND

FUND

REQUIREMENT

ANALYSIS


VERY DIFFICULT 3 7.1

DIFFICULT 22 52.4

MODERATE 16 38.1

EASY 1 2.4

VERY EASY - -

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 7.1% of the concerns feel very

difficult for project planning and fund requirement analysis, 52.4% of the concerns feel difficult

for project planning and fund requirement analysis, 38.1% of the concerns feel moderate for

project planning and fund requirement analysis and 2.4% of the concerns feel easy for project

planning and fund requirement analysis.

It renders that most of the concerns feel difficult for project planning and fund requirement

analysis.

45

CHART 5

Proficiency of Project Planning and Fund Requirement Analysis

46

TABLE 6

Difficulties Faced by the Concerns When Starting the Business

DIFFICULTIES

FACED FOR

STARTING

BUSINESS


LACK OF

FINANCING

20 47.62

INEFFECTIVE CASH

MANAGEMENT

3 7.14

INEFFECTIVE

BUDGET

PREPARATION

2 4.76

INEFFECTIVE

STRATEGY

9 21.43

LACK OF

GUIDANCE FOR

FINANCIAL AID

8

19.05

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 47.62% of the concerns Faced

difficulties due to lack of financing while starting the concern, 7.14% of the concerns Faced

difficulties due to ineffective cash management while starting the concern, 4.76% of the

concerns Faced difficulties due to ineffective budget preparation while starting the concern,

21.43% of the concerns Faced difficulties due to ineffective strategy while starting the concern

and 19.05% of the concerns Faced difficulties due to lack of guidance for financial aid while

starting the concern.

It expresses that most of the concerns feel difficult due to lack of financing while starting the

concern.

47

CHART 6

Difficulties Faced by the Concerns When Starting the Business

48

TABLE 7

Type of Finance the Concerns Received from the Initial Stage

TYPE OF FINANCE

RECEIVED


PROPRIETORS OWN

FUND

33 78.57

FUNDS FROM

PARTNERS

7 16.67

FUNDS FROM

GOVERNMENT

- -

VENTURE

CAPITALIST

2 4.76

ANGEL INVESTORS - -

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 78.57% of the concerns made avail of

proprietor‟s own fund, 16.67% of the concerns received funds from partners and 4.76% of the

concerns received funds from venture capitalists.

It points that most of the concerns made avail of proprietor‟s own fund.

49

CHART 7

Type of Finance the Concerns Received from the Initial Stage

50

TABLE 8

Requirement of Funds in Next 3 to 5 Years

REQUIREMENT FREQUENCY PERCENTAGE

NOT NEED ANY

FINANCE

2 4.76

NEED FINANCE

FROM BANKS

19 45.24

NEED FINANCE

FROM PRIVATE

INSTITUTIONS

16 38.1

NEED FINANCE

FROM PARTNERS

- -

OTHERS 5 11.9

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 4.76% of the concerns not need any

finance, 45.24% of the concerns need finance from banks, 38.1% of the concerns need finance

from other financial institutions and 11.9% of the concerns need finance from others.

This indicates that most of the concerns need finance from banks.

51

CHART 8

Requirement of Funds in Next 3 to 5 Years

52

TABLE 9

Accessibility of Funds from External Sources

ACCESSIBILITY OF

FUNDS FROM

EXTERNAL

SOURCES



DIFFICULT 21 50

MODERATE 8 19

EASY - -

VERY EASY 1 2.4

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 28.6% of the concerns feel accessing

funds from external sources is very difficult, 50% of the concerns feel accessing funds from

external sources is difficult, 19% of the concerns feel accessing funds from external sources is

moderate and 2.4% of the concerns feel accessing funds from external sources is very easy.

It shows that most of the concerns feel accessing funds from external sources is difficult.

53

CHART 9

Accessibility of Funds from External Sources

54

TABLE 10

Procedure for Accessibility of Funds from External Sources

PROCEDURE

ACCESSIBILITY OF

FUNDS FROM

EXTERNAL

SOURCES



DIFFICULT 26 62

MODERATE 4 9.5

EASY - -

VERY EASY - -

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 28.6% of the concerns feel the

procedure for accessing funds from external sources is very difficult, 62% of the concerns feel

the procedure for accessing funds from external sources is difficult and 9.5% of the concerns feel

the procedure for accessing funds from external sources is moderate.

It exhibits that most of the concerns feel that the procedure for accessing funds from external

sources is difficult.

55

CHART 10

Procedure for Accessibility of Funds from External Sources

56

TABLE 11

Proficiency of the Professional Marketing Concepts and Right Application of


PARTICULARS FREQUENCY PERCENTAGE

VERY DIFFICULT TO

HANDLE

2 4.8

HAVE AN IDEA BUT

OFTEN STRUGGLE

4 9.5

CAN MANAGE BUT

NOT COMFORTABLE

13 31

COMFORTABLE 20 47.6

VERY MUCH

COMFORTABLE

3

7.1

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 4.8% of the concerns feel the

professional marketing concepts and right application of them for the concerns‟ products and

services are very difficult to handle, 9.5% of the concerns feel the professional marketing

concepts and right application of them for the concerns‟ products and services are having an idea

but often struggle, 31% of the concerns feel the professional marketing concepts and right

application of them for the concerns‟ products and services can manage but not comfortable,

47.6% of the concerns feel the professional marketing concepts and right application of them for

the concerns‟ products and services are comfortable and 7.1% of the concerns feel the

professional marketing concepts and right application of them for the concerns‟ products and

services are very much comfortable.

It specifies that most of the concerns feel the professional marketing concepts and right

application of them for the concerns‟ products and services are comfortable

57

CHART 11

Proficiency of the Professional Marketing Concepts and Right Application of


58

TABLE 12

Positioning of Brand Name of Product or Service


VALUE FOR MONEY 11 26

SUPERIOR QUALITY 20 47.6

CONSISTENCY 5 12

TIMELINESS 5 12

OTHERS 1 2.4

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 26% of the concerns position their

brand name of the product or service by value of money, 47.6% of the concerns position their

brand name of the product or service by superior quality, 12% of the concerns position their

brand name of the product or service by consistency, 12% of the concerns position their brand

name of the product or service by timeliness and 2.4% of the concerns position their brand name

of the product or service by other reasons.

It renders that most of the concerns position their brand name of the product or service by

superior quality.

59

CHART 12

Positioning of Brand Name of Product or Service

60

TABLE 13

Reasons for Loyalty of Customers to the Products or Services


QUALITY 25 59.5

TIMELINESS - -

SUPPORT & SERVICE 13 31

PRICE 4 9.5

OTHERS - -

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 59.5% of the concerns have loyal

customers because of quality, 31% of the concerns have loyal customers because of support and

service and 9.5% of the concerns have loyal customers because of price.

It expresses that most of the concerns have loyal customers due to quality in their products or

services.

61

CHART 13

Reasons for Loyalty of Customers to the Products or Services

62

TABLE 14

Pre-launching Survey


YES 11 26.19

NO 31 73.81

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 26.19 % of the concerns have

conducted pre-launching surveys and 73.81% of the concerns haven‟t conducted pre-launching

surveys.

It points out that most of the concerns haven‟t conducted pre-launching surveys for their

products.

63

CHART 14

Pre-launching Survey

64

TABLE 15

Marketing Problem


YES 7 16.67

NO 35 83.33

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 16.67 % of the concerns have

marketing problems and 83.33% of the concerns doesn‟t have marketing problems.

It indicates that most of the concerns have marketing problems.

65

CHART 15

Marketing Problem

66

TABLE 16

Opinion towards Exposure


YES 39 92.9

NO 3 7.1

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 92.9 % of the concerns that feel being in

Madurai is less exposure and 7.1% of the concerns that doesn‟t feel being in Madurai is less

exposure.

It shows that most of the concerns feel that being in Madurai is less exposure.

67

CHART 16

Opinion towards Exposure

68

TABLE 17

Initiative to Travel


YES 42 100

NO - -

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 100 % of the concerns that take initiative

to travel for updating their knowledge.

It exhibits that almost all of the concerns‟ owner-managers take initiative to update their knowledge.

69

CHART 17

Initiative to Travel

70

TABLE 18

Preferences of Seminars that the Concerns Need to be Availed


TECHNOLOGIACAL

SEMINARS

17 40.4

FINANCE &

OPERATIONS

SEMINAR

9 21.4

BUSINESS

DEVELOPMENT

SEMINARS

5 12

MARKETING

RELATED SEMINARS

11 26.2

OTHERS - -

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 40.4% of the concerns prefer to attend

technological seminars, 21.4% of the concerns prefer to attend finance and operations seminars,

12% of the concerns prefer to attend business development related seminars and 26.2% of the

concerns prefer to attend marketing related seminars.

It specifies that most of the concerns prefer to attend technological seminars.

71

CHART 18

Preferences of Seminars that the Concerns Need to be Availed

72

TABLE 19

Frequency of Travel to Other Cities


ONCE IN A YEAR 9 21.4

TWICE IN A YEAR 13 31

ONCE IN SIX

MONTHS

7 16.7

ONCE IN A MONTH 10 23.8

WHENEVER NEEDED 3 7.1

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 21.4% of the owner-managers travel

once in a year for updating their knowledge, 31% of the owner-managers travel twice in a year

for updating their knowledge, 16.7% of the owner-managers travel once in a month for updating

their knowledge, 23.8% of the owner-managers travel twice in 6 months for updating their

knowledge and 7.1% of the owner-managers travel whenever needed for updating their

knowledge.

It renders that most of the owner-managers travel twice in 6 months for updating their

knowledge.

73

CHART 19

Frequency of Travel to Other Cities

74

TABLE 20

Brand of Computer Systems Used by the Concerns


HCL 9 21.43

LENOVO 3 7.14

HP 9 21.43

DELL 6 14.3

OTHERS 15 35.7

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 21.43% of the concerns use HCL

brand of computer systems, 7.14% of the concerns use Lenovo brand of computer systems,

21.43% of the concerns use HP brand of computer systems, 14.3% of the concerns use Dell

brand of computer systems and35.7% of the concerns use other brand of computer systems.

It expresses that most of the concerns use other brand of computer systems.

75

CHART 20

Brand of Computer Systems Used by the Concerns

76

TABLE 21

Speed of the Broadband Service


1 Mbps 4 9.5

2 Mbps 35 83.3

3 Mbps 1 2.4

4 Mbps 1 2.4

OTHERS 1 2.4

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 9.5% of the concerns use 1 Mbps

speed of broadband service, 83.3% of the concerns use 2 Mbps speed of broadband service, 2.4%

of the concerns use 3 Mbps speed of broadband service, 2.4% of the concerns use 4 Mbps speed

of broadband service and 2.4% of the concerns use other frequency of the speeds of broadband

service.

It points that most of the concerns use 2 Mbps speed of broadband service.

77

CHART 21

Speed of the Broadband Service

78

TABLE 22

Provision of Same Speed


YES 4 9.5

NO 38 90.5

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 9.5 % of the concerns that feel broadband

service providers provide same speed all the time and 90.5% of the concerns that feel broadband

service providers doesn‟t provide same speed all the time.

It indicates that most of the concerns broadband service providers don‟t provide same speed all the

time.

79

CHART 22

Provision of Same Speed

80

TABLE 23

Variation of Speed Provided by the Broadband Service


ALWAYS 1 2.6

FREQUENTLY 18 46.1

SOMETIMES 16 41

MODERATE 3 7.7

NEVER 1 2.6

Total 39 100

Inference:

From the above table it is inferred that out of 42 concerns, 2.6% of the concerns feel that always

the speed of the broadband service varies, 46.1% of the concerns feel that frequently the speed of

the broadband service varies, 41% of the concerns feel that sometimes the speed of the

broadband service varies, 7.7% of the concerns feel that moderately the speed of the broadband

service varies and 2.6% of the concerns feel that the speed of the broadband service never varies.

It shows that most of the concerns feel that frequently the speed of the broadband service varies.

81

CHART 23

Variation of Speed Provided by the Broadband Service

82

TABLE 24

Frequency of Changes in the Software used


EVERY MONTH 1 2.4

ONCE IN 6 MONTHS 1 2.4

ONCE IN AYEAR 2 4.8

AFTER 5 YEARS 2 4.7

ACCORDING TO THE

TYPE OF

REQUIREMENT

36

85.7

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 2.4% of the concerns change their

software every month, 2.4% of the concerns change their software once in 6 months, 4.8% of the

concerns change their software once in a year, 4.7% of the concerns change their software after 5

years and 85.7% of the concerns change their software according to the type of requirement.

It exhibits that most of the concerns change their software according to the type of requirement.

83

CHART 24

Frequency of Changes in the Software used

84

TABLE 25

Level of Open Source Adoption


VERY HIGH 7 16.7

HIGH 8 19

MODERATE 9 21.4

LOW 11 26.2

VERY LOW 7 16.7

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 16.7% of the concerns‟ level of open

source adoption is very high, 19% of the concerns‟ level of open source adoption is high, 21.4%

of the concerns‟ level of open source adoption is moderate, 26.7% of the concerns‟ level of open

source adoption is low and 16.7% of the concerns‟ level of open source adoption is very low.

It specifies that most of the concerns‟ level of open source adoption is low.

85

CHART 25

Level of Open Source Adoption

86

TABLE 26

Frequency of Servicing the Computer Systems


EVERY MONTH 7 16.7

ONCE IN 6 MONTHS 25 59.5

ONCE IN A YEAR 9 21.4

EVRY 5 YEARS ONCE - -

NEVER 1 2.4

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 16.7% of the concerns service their

systems every month, 59.5% of the concerns service their systems once in 6 months, 21.4% of

the concerns service their systems once in a year and 2.4% of the concerns never service their

systems.

It renders that most of the concerns service their systems once in 6 months.

87

CHART 26

Frequency of Servicing the Computer Systems

88

TABLE 27

Concerns’ Point of View about the CSR Activities


SOLIDARITY 25 59.52

MARKETING

STRATEGY

7 16.7

HIRING AND

RETAINING

EMPLOYEES

3 7.14

CREATING BRAND

IMAGE

4 9.5

OTHERS 3 7.14

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 59.52% of the concerns‟ point of view

about CSR activity is solidarity, 16.7% of the concerns‟ point of view about CSR activity is

marketing strategy, 7.14% of the concerns‟ point of view about CSR activity is hiring and

retaining the employees, 9.5% of the concerns‟ point of view about CSR activity is creating

brand image and 7.14% of the concerns‟ point of view about CSR activity is others.

It expresses that most of the concerns‟ point of view about CSR activity is solidarity.

89

CHART 27

Concerns’ Point of View about the CSR Activities

90

TABLE 28

Concerns Engaging in the CSR Activities


EDUCATION 11 26.2

HEALTH 4 9.52

COMMUNITY

DEVELOPMENT

24 57.14

ENVIRONMRNTAL

PRESERVATION

3 7.14

OTHERS - -

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 26.2% of the concerns engage in

education, 9.52% of the concerns engage in health, 57.14% of the concerns engage in community

development and 7.14% of the concerns engage in environmental preservation.

It points that most of the concerns engage in community development.

91

CHART 28

Concerns Engaging in the CSR Activities

92

TABLE 29

Concerns that Face Problems in Engaging CSR Activities


YES 3 7.1

NO 39 92.9

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 7.1 % of the concerns have any problems

in engaging CSR activities and 92.90 % of the concerns don‟t have any problems in engaging CSR

activities.

It indicates that most of the concerns don‟t have any problems in engaging CSR activities.

93

CHART 29

Concerns that Face Problems in Engaging CSR Activities

94

Chi – Square Analysis:

It is a quantitative measure used to determine whether a relationship exists between two

categorical variables.

Formula:

χ2

=∑ (O-E) 2

/ ∑ E

Where χ2 is

the Chi-square statistics, O is the observed frequency and E is the expected

frequency. Where E = Row total * Column total / No of observations

HYPOTHESIS:

NULL HYPOTHESIS (H0):

There is no significant relationship between the type of ownership of the concern and the type of

financial arrangements made avail by the concern.

ALTERNATIVE HYPOTHESIS (H1):

There is significant relationship between the type of ownership of the concern and the type of

financial arrangements made avail by the concern.

95

TABLE 30

χ2

Test- Type of Ownership of the Concern and the Type of Financial

Arrangements Made Availed

FINANCIA

L

ARRANGE

MENTS

MADE

AVAIL

TYPE OF

OWNERSHIP OF

THE CONCERN

LOANS

FROM

COMMERCIAL

BANKS

LOANS FROM

GOVERNMENT

AGENCIES

LOANS FROM

PRIVATE

FINANCIAL

INSTITUTION

S

CREDIT

CARDS

OTHER

S

TOTAL

SOLE

PROPRIETORY

0 0 2 1 1 4

PARTNERSHIP 1 0 0 0 2 3

PRIVATE LTD 4 2 23 2 4 35

PUBLIC LTD 0 0 0 0 0 0

OTHERS 0 0 0 0 0 0

TOTAL 5 2 25 3 7 42

96

OBSERVED

FREQUENCY

( O )

EXPECTED

FREQUENCY

( E )

( O – E )

( O – E )2

( O – E )2 / E

2

1

1

1

2

4

2

23

2

4

2.38

0.29

0.67

0.36

0.50

4.17

1.67

20.83

2.5

5.83

-0.38

0.71

0.33

0.64

1.5

-0.17

0.33

2.17

-0.5

-1.83

0.1444

0.5041

0.1089

0.4096

2.25

0.03

0.11

4.71

0.25

3.35

0.061

1.738

0.163

1.138

4.500

0.001

0.100

0.230

0.100

0.600

TOTAL 8.631

Calculated Value:

χ2

=∑ (O-E) 2

/ ∑ E

χ2= (O – E)

2 / E = 8.631

97

Degree of freedom:

(r-1) (c-1) = (5-1) (5-1)

= 4 * 4 = 16

Table value at 5% significance = 26.296

Inference:

Since the calculated value is less than the table value. That is 8.631is less than 26.296. So, Null

hypothesis is accepted. So, there is no significant relationship between the type of ownership of

the concern and the type of financial arrangements made avail by the concern.

98

Chi – Square Analysis:

HYPOTHESIS:


There is no significant relationship between the current phase of the concern and the mode of

marketing of the concern.


There is significant relationship between the current phase of the concern and the mode of

marketing of the concern

99

TABLE 31

χ2 Test- Current Phase of Marketing and Mode of Marketing

CURREN

T

MARKET

ING

PHASE

MODE

OF

MARKETING

INTRODUCT

ION

STAGE

GROWTH MATURITY

SATURA

TION

DECLI

NE

TOTA

L

ADVERTISING 0 10 0 0 0 10

PUBLIC RELATIONS 1 7 0 0 0 8

SALES

PROMOTIONS

0 5 0 0 0 5

DIRECT

MARKETING

1 3 1 0 0 5

ONLINE

MARKETING

1 13 0 0 0 14

TOTAL 3 38 1 0 0 42

100

OBSERVED

FREQUENCY

( O )

EXPECTED

FREQUENCY

( E )

( O – E )

( O – E )2

( O – E )2 / E

10

1

7

5

1

3

1

1

13

9.05

0.60

7.24

4.524

0.36

4.524

0.12

1.00

12.67

0.95

0.4

-0.24

0.476

0.64

-1.524

0.88

-

0.33

0.9025

0.16

0.06

0.227

0.41

2.323

0.8

-

0.1089

0.1

1.27

0.01

0.05

1.14

0.513

6.5

-

0.01

TOTAL 8.6

101

Calculated Value:

χ2

=∑ (O-E) 2

/ ∑ E

χ2= (O – E)

2 / E = 8.6

Degree of freedom:

(r-1) (c-1) = (5-1) (5-1)

= 4 * 4 = 16

Table value at 5% significance = 26.296

Inference:

Since the calculated value is less than the table value. That is 8.6 is less than 26.296. So, Null

hypothesis is accepted. So, there is no significant relationship between the current phase of the

concern and the mode of marketing of the concern.

102

TABLE 32

Percentage Analysis- Preference of Broadband Service Provider for its

Features


CONNECTIVITY 33 78.5

BRAND NAME 5 11.9

PRICE - -

SECURITY 2 4.8

OTHERS 2 4.8

Total 42 100

Inference:

From the above table it is inferred that out of 42 concerns, 78.5% of the concerns prefer their

broadband service provider due to connectivity, 11.9% of the concerns prefer their broadband

service provider due to brand name, 4.8% of the concerns prefer their broadband service provider

due to security and 4.8% of the concerns prefer their broadband service provider due to other

reasons.

It exhibits that most of the owner-managers prefer their broadband service provider due to

connectivity.

103

TWO WAY ANOVA:

HYPOTHESIS:


There is no significant relationship between the preference of broadband service and the level of

satisfaction of services provided by the broadband service provider.


There is significant relationship between the preference of broadband service and the level of


TABLE 33

TWO WAY ANOVA- Preference and Level of Satisfaction of Services on

Broadband Service

Broadband

Service

Provider

Satisfaction

Level

Airtel BSNL Reliance Tata

Indicom

Other Service

Providers

Total

Highly

Dissatisfied

0 17 7 5 0 29

Dissatisfied 0 9 1 1 0 11

Neutral 0 0 2 0 0 2

Satisfied 0 0 0 0 0 0

Highly Satisfied 0 0 0 0 0 0

Total 0 26 10 6 0 42

104

Step 1:

T=42, n= 25, Correction Factor = ((T^2)/n)

= (42^2)/25=70.56

Step 2:

Total SS= 0+289+49+25+0+841+0+81+1+1+0+121+0+0+4+0+0+4+676+100+36-

(70.56)

= 2157.44

Step3:

SS between Columns treatment = [02/5 + 26

2/5 + 10

2/5 + 6

2/5+ 0

2/5] - 70.56

= [676/5 +100/5 + 36/5] - 70.56

= 91.84

Step 4:

SS between rows treatment = [292/5 +11

2/5+ 2

2/5] - 70.56

= 122.64

Step 5:

SS Residual (or) error = Total SS – (SS between Columns treatment + SS between

Rows treatment)

= 2157.44 – (91.84 + 122.64)

=1942.96

105

ANOVA TABLE

SOURCES

OF

VARIATIO

N

SUM OF

SQUARE

S

SS

DEGREE

OF

FREEDOM

d.f

MEAN

SQUARE

MS

F-Ratio 5% F limit

(or the table

values)

BETWEEN

COLUMNS

91.84 (c-1)=(5-1)

=4

91.84/4=

22.96

22.96/121.435

=

0.189

(4,16)=3.01

BETWEEN

ROWS

122.64 (r-1)=(5-1)

=4

122.64/4=

30.66

30.66/121.435

= 0.2525

(4,6)=3.01

RESIDUAL

(or)

ERROR

1942.96 (c-1)(r-1)

=(4)(4)=16

1942.96/16=

121.435

TOTAL

2157.44 (5*5)-1=24

Inference:

The calculated value between columns (0.189) and between rows (0.2525) is lesser than the F-

limit table value at 5 % significant level (3.01). So, the null hypothesis is accepted (i.e.) there is

no significant relationship between the preference of broadband service and the level of


106

TABLE 34

Weighted Average Level of Importance towards the CSR Activities

PARTICULAR VERY

IMPORTANT

IMPORTAN

T

MODERATE NOT VERY

IMPORTANT

NOT AT ALL

IMPORTANT

MEA

N

SCO

RE

RA

NK

X W WX X W W

X

X W WX X W WX X W WX

DEVELOPMENT

OF SOCIETY

11 5 55 2 4 8 2 3 6 2 2 4 0 1 0 4.9 II

GAINING

CUSTOMER

ATTENTION

15 5 75 0 4 0 0 3 0 7 2 14 0 1 0 5.9 I

TO GAIN

GOVERNMENT

ATTENTION

0 5 0 0 4 0 0 3 0 1 2 2 0 1 0 0.13 III

DEVELOPMENT

OF BUSINESS

0 5 0 0 4 0 0 3 0 0 2 0 0 1 0 0

OTHERS 0 5 0 0 4 0 0 3 0 0 2 0 0 1 0 0

Inference:

The concerns‟ give importance to CSR activities firstly for gaining customer attention, the

concerns‟ give importance to CSR activities secondly for the development of the society and the

concerns‟ give importance to CSR activities thirdly for gaining government attention.

107

TABLE 35

Weighted Average Level of Proficiency towards the Management Strategies

PARTICULARS DIFFICULT TO

HANDLE

SOMEWHAT

DIFFICULT

OFTEN

STRUGGLE

NOT

COMFORTABLE

COMFORTABLE MEAN

SCORE

RANK

X W WX X W WX X W WX X W WX X W WX

VISION,MISSION,

POSITIONING ,

CORE

PRINCIPLES

0 5 0 2 4 8 7 3 21 24 2 48 9 1 9 5.7 IV

GOAL SETTING 1 5 5 1 4 4 4 3 12 27 2 54 9 1 9 5.6 V

SWOT ANALYSIS

0 5 0 2 4 8 2 3 6 0 2 0 29 1 29 2.9 VI

IMPLEMENTATI

ON,

MONITORING

AND

CORRECTION OF

STRATEGIC

PLAN

1 5 5 1 4 4 9 3 27 23 2 46 8 1 8 6 III

TRENDS/CLIMAT

E ANALYSIS

0 5 0 3 4 12 12 3 36 21 2 42 6 1 6 6.4 I

MATCHING

RESOURCES FOR

STRATEGIC/

BUSINESS PLAN

1 5 5 2 4 8 6 3 18 27 2 54 6 1 6 6.1 II

Inference:

The concerns‟ level of proficiency towards trends/ climate analysis stands first, the concerns‟

level of proficiency towards matching resources for strategic/ business plan stands second and

the concerns‟ level of proficiency towards implementation, monitoring and correction of

strategic plan stands third.

108

TABLE 36

Weighted Average Level of Satisfaction towards the Management Skills

PARTICULAR

S

HIGHLY

SATISFIED

SATISFIED NEUTRAL DISSATISFIED HIGHLY

DISSATISFIED

MEAN

SCORE

RAN

K

X W WX X W WX X W WX X W WX X W WX

HANDLING

MEETING

9 5 45 29 4 116 2 3 6 2 2 4 0 1 0 11.4 IV

PLANNING 18 5 90 21 4 84 2 3 6 1 2 1 0 1 0 12.13 II

ORGANIZING 18 5 90 22 4 88 2 3 6 0 2 0 0 1 0 12.3 I

SCHEDULING 15 5 75 21 4 84 4 3 12 2 2 4 0 1 0 11.7 III

DELEGATING 11 5 55 15 4 60 15 3 45 0 2 0 1 1 1 10.7 VIII

REPORTING 5 5 25 15 4 60 20 3 60 2 2 4 0 1 0 9.9 X

PROJECT

HANDLING

8 5 40 26 4 104 8 3 24 0 2 0 0 1 0 11.2 V

NETWORKING 7 5 35 25 4 100 9 3 27 1 2 2 0 1 0 10.9 VI

TEAM

BUILDING

5 5 25 14 4 56 23 3 69 0 2 0 0 1 0 10 IX

TIME

MANAGEMEN

T

7 5 35 25 4 100 8 3 24 1 2 2 1 1 1 10.8 VII

CRISIS

MANAGEMEN

T

6 5 30 25 4 100 8 9 27 2 2 4 0 1 0 10.7 VIII

Inference:

The concerns‟ level of satisfaction towards organizing skills stands first, the concerns‟ level of

satisfaction towards planning skills stands second and the concerns‟ level of satisfaction towards

scheduling skills stands third.

109

FINDINGS

SUGGESTIONS

AND

CONCLUSION

110

CHAPTER-5

FINDINGS

The research project was undertaken to study and evaluate the various problems faced by the IT

industry in Madurai. The following are the findings of the study.

97.6 % of the respondents are Male

28.6% of the concerns chose the IT field based on passion

81% of the concerns chose Madurai city due to nativity

45.238% of the concerns very much give importance for innovation

38.1% of the concerns feel moderate for project planning and fund requirement

analysis

47.62% of the concerns Faced difficulties due to lack of financing while starting

the concern

78.57% of the concerns made avail of proprietor‟s own fund

45.24% of the concerns need finance from banks

50% of the concerns feel accessing funds from external sources is difficult

62% of the concerns feel the procedure for accessing funds from external sources

is difficult

47.6% of the concerns feel the professional marketing concepts and right

application of them for the concerns‟ products and services are comfortable.

47.6% of the concerns position their brand name of the product or service by

superior quality.

59.5% of the concerns have loyal customers because of quality.

73.81% of the concerns haven‟t conducted pre-launching surveys

83.33% of the concerns doesn‟t have marketing problems

92.9 % of the concerns that feel being in Madurai is less exposure

100 % of the concerns that take initiative to travel for updating their knowledge

40.4% of the concerns prefer to attend technological seminars

31% of the owner-managers travel twice in a year for updating their knowledge

111

35.7% of the concerns use other brand of computer systems.

83.3% of the concerns use 2 Mbps speed of broadband service

90.5% of the concerns that feel broadband service providers doesn‟t provide same

speed all the time

46.1% of the concerns feel that frequently the speed of the broadband service

varies

85.7% of the concerns change their software according to the type of requirement

26.7% of the concerns‟ level of open source adoption is low.

59.5% of the concerns service their systems once in 6 months

59.52% of the concerns‟ point of view about CSR activity is solidarity

57.14% of the concerns engage in community development.

92.90 % of the concerns don‟t have any problems in engaging CSR activities

Null hypothesis is accepted. So, there is no significant relationship between the

type of ownership of the concern and the type of financial arrangements made

avail by the concern.

Null hypothesis is accepted. So, there is no significant relationship between the

current phase of the concern and the mode of marketing of the concern.

78.5% of the concerns prefer their broadband service provider due to connectivity

Null hypothesis is accepted (i.e.) there is no significant relationship between the

preference of broadband service and the level of satisfaction of services provided

by the broadband service provider

The concerns‟ give importance to CSR activities firstly for gaining customer

attention

The concerns‟ level of proficiency towards trends/ climate analysis stands first

The concerns‟ level of satisfaction towards organizing skills stands first

112

SUGGESTIONS

The policy makers and government should encourage women entrepreneurs to start IT

companies in Madurai.

The policy makers should encourage the owner-managers of the members of Software

Industry Development Association for innovative products or services.

Access to finance is a problem. The policy makers should approach the government

agencies to address this problem together with the financial institutions. Growth of the

industry generally requires resources and owner-managers need to have access to these

resources in order to growth.

The procedures for accessing funds from government and non-governmental financial

institutions should be made easy by the government agencies so, that the software

companies in Madurai can be well established as in the cities of Bangalore and Chennai.

The policy makers should suggest the guidelines for accessing finance from government

and non-governmental financial institutions

The policy makers should arrange for marketing, finance, business development seminars

to develop the knowledge of the owner-managers of the members of Software Industry

Development Association.

The policy makers should prompt broadband service providers for improved broadband

services.

The policy makers should arrange seminars related to management strategies so, that the

owner-managers of the member companies of Software Industry Development

Association can run their business in a better manner so, that the economic condition of

Madurai will be improved.

The policy makers should give awareness more about statutory issues to the owner-

managers of the members of Software Industry Development Association because many

of the members of Software Industry Development Association refused to answer the

questionnaire related to statutory issues.

113

CONCLUSION

The study was intended to get the responses from various IT companies and how far the

problems hinder the growth of the IT industry. The study is conducted to identify the various

factors that hinders the growth of IT industry in Madurai.

This study also suggest some measures to solve the problems of IT industry in Madurai such as

The procedures for accessing funds from government and non-governmental financial

institutions should be made easy by the government agencies so, that the software companies in

Madurai can be well established as in the cities of Bangalore and Chennai. The policy makers

should prompt broadband service providers for improved broadband services. These suggestions

are beneficial for the policy makers to prepare better policies for the action plan to reduce the

problems that hinders the growth.

114

BIBLIOGRAPHY

1. Prof. A.K. Sengupta, Director, Institute of development studies university of Lucknow on

June 2009, the study of the problems of sick small scale industries in Uttar Pradesh and

suggested strategies for their revival, institute of development studies university of

Lucknow.

Website: http://planningcommission.nic.in/reports/sereport/ser/ser_ssi.pdf

2. Ashish Arora, V.S.Arunachalam, Jai Asundi, Ronald Fernandes on Feb 2000, the

Indian Software Industry, Carnegie Mellon University.

Website: http://www.heinz.cmu.edu/project/india/pubs/rndmgmt.pdf

3. Jon Birger Skjærseth, Kristian Tangen, Philip Swanson, Atle Christer Christiansen, Arild

Moe, and Leiv Lunde on July 2004, Limits to Corporate Social Responsibility, Fridtjof

Nansen Institute, Lysaker Norway.

Website: http://www.fni.no/doc&pdf/FNI-R0704.pdf

4. Awino Zachary Bolo, PhD., on August 2010, Challenges facing the implementation of

differentiation strategy at the mumias sugar company Limited, University of Nairobi,

Kenya.

Website: http://www.aibuma.org/proceedings/downloads/Awino1,%20Kenya.pdf

http://planningcommission.nic.in/reports/sereport/ser/ser_ssi.pdf

http://www.heinz.cmu.edu/project/india/pubs/rndmgmt.pdf

http://www.fni.no/doc&pdf/FNI-R0704.pdf

115

APPENDIX

A Study on Problems faced by IT Industry in Madurai

Questionnaire:

Name :

Name of the Organization :

Organizational Details

1. When did you start your concern?

2. Why did you choose this field?

a) Challenging b) based on qualification c) passion d) more prospects e)

others please specify ________________________

3. Why did you choose this place?

a) Availability of labor b) government economic incentives c) taxes d) regulations

e) others please specify _______________________

4. How far do you give importance for innovation?

a) Not at all important b)not very much important c)neutral d)somewhat

important e)very much important

116

Finance

1. Project planning and fund requirement analysis is

a) Very difficult b) difficult c) moderate d) easy e) very easy

2. What type of difficulty did you face when you started this concern?

a) lack of financing b)ineffective cash management c)ineffective budget preparation

d)ineffective strategy e)lack of guidance for financial aid

3. What type of ownership is your concern?

a) Sole proprietary b)Partnership c) Private Ltd d) Public Ltd e) others please

specify

4. What type of financing has your concern received from the initial stage?

a) proprietor‟s own fund b) funds from partners c) government funds d)

venture capitalist e)angel investors f) others please specify

_______________________

5. What type of financial arrangements do your concern made avail?

a) loans from commercial banks b)loans from government agencies c) loans from

private financial institutions d)credit cards e) others please specify

_______________

6. During the next 3 to 5 years the concern may

a) Not need any financing b) need financing from banks c) need financing from

other private financial institutions d) need financing from partners

e)others please specify________________________

7. Accessing funds from external sources is:


117

8. What do you feel about the procedure for accessing funds from external sources?


9. Do you have any other problems in acquiring funds? If yes, Please mention

10. What kind of support you expect from SIDA in this regard?

Marketing

1. What is the current marketing phase for your concern?

a) Introduction stage b) growth c) maturity d) saturation e) decline

2. What is your mode of marketing?

a) advertising b) public relations c) sales promotion d) direct marketing e)

online

3. What do you feel about the professional marketing concepts and right application of them

to your products/services?

a) Very difficult to handle b) have an idea but often struggle c) can manage but not

comfortable d) comfortable e) very much comfortable

4. What do you feel about the analytical skills of marketing strategies, plans, innovations of

competition and their impact on your products/services?

118

a) Very difficult to handle b) have an idea but often struggle c) can manage but not

comfortable d) comfortable e) very much comfortable

5. Have you done any pre- launching survey? a) yes b) no

6. How did you position the brand name of your product or service?

a) Value for money b) Superior quality c) Consistency d) timeliness e)Others

please specify ________________________

7. Why do you think these customers are loyal to your product?

a) Quality b) timeliness c) support & service d) price e) others please

specify________________________

8. A) Do you have any problems in marketing your products? a) yes b) no

B) If yes, please specify the problems:

a) Identifying customers b) identifying market c) inadequate funds for marketing

d) inadequate marketing strategies e) others please specify____________

Exposure

1. Do you think being in Madurai have less exposure to seminars which help you in

developing your business? a) yes b) no

2. If yes, for the above question specify your preference :

a) Technology seminars b) finance & operation seminars c) business development

related seminars d) marketing related seminars e) others please

specify________________________

119

3. A) Do you take initiative to travel to other cities to update yourself?

a) Yes b) no

B) If yes, how often..

a) once in a year b) twice in a year c) once in a month d) twice in 6 months e)none

Infrastructure and Connectivity

1. Do you have enough number of systems in your concern? a) yes b) no

2. How many systems do you have?

a) 5-10 b) 11-20 c) 21-30 d) 31-50 e) above 50

3. What brand of systems do you have?

a) HCL b) Lenovo c) Hewlett Packard d) Dell e) others please

specify________________________

4. Which of the following broadband service provider do you use?

a) Airtel b) BSNL c) reliance d) Tata indicom e) others please

specify________________

5. Why do you prefer that particular broadband service provider?

a) Connectivity b) brand name c) price d) security e) others please

specify________________________

6. Are you satisfied with the services of that particular service provider? If yes, please

specify the degree of satisfaction:

a) Highly dissatisfied b) dissatisfied c) neutral d) satisfied e) highly satisfied

120

7. Please specify the speed of the broadband service you use.

a) 1 Mbps b) 2 Mbps c) 3 Mbps d) 4 Mbps e) Others please

specify________________________

8.A) Does your broadband service provider provide the same speed all the time?

a) yes b) no

B) If no, please specify the frequency:

a) Always b) frequently it varies c) sometimes it varies d) moderate e) never

9. How often you change your software?

a) Every month b)once in six months c)once in a year d) after 5 year e)

according to the type of requirements

10. A) What is the level of your Open Source adoption?

a) very high b)high c) moderate d) low e) very low

B) If low, give reasons

11. How often do you service your systems?

a) every month b) once in six months c) once in a year d)every 5 years once

e)never

12. What are the modes of transport does your resource persons use?

a) car b) train c)plane d) bus e)others please specify____________

13. Do you think these modes of transport are adequate? a) yes

b) no

14. Do transportation expenses are worthwhile? a) yes b) no

121

15. What are all your expectations from SIDA?

Corporate Social Responsibilities (CSR) Activities

1. What does CSR activities mean to you?

a) Solidarity b) marketing strategy c) hiring and retaining employees

d) creating brand image e) others please specify________________

2. What kind of CSR activities you engage in your concern?

a) Education b)health c) community development d)environment

preservation e) others please specify_________

3. Do you think CSR activities are important? If yes, please specify the degree of

importance:

a) Very much important b)important c) moderate d)not very important e)

not at all important

4. Why do you think CSR activities are important?

a) Development of society b) gaining customer attention c) to gain government

attention d) development of the business e) others please

specify________________________

5. A) Do you have any problems in engaging CSR activities?

a) yes b) no

B) If yes, please mention the problems.

122

Management Strategies

Please rate yourself based on your proficiency/confidence level on each of the check points

given below:

a - I always find it very difficult to handle

b- I always find it somewhat difficult to handle

c – Just have an idea but often struggle

d – I can reasonably manage but not comfortable

e – I am an expert and comfortably manage

1. What do you feel about managing to maintain the Philosophy of your business (Vision,

Mission, Positioning, Core principles etc.)

a) [ ] b) [ ] c) [ ] d) [ ] e) [ ]

2. What do you feel about Goal setting for your business?

a) [ ] b) [ ] c) [ ] d) [ ] e) [ ]

3. What do you feel about working on a SWOT analysis for your organization?

a) [ ] b) [ ] c) [ ] d) [ ] e) [ ]

4. What do you feel about the Practical implementation, monitoring and correction of

strategic plan?

a) [ ] b) [ ] c) [ ] d) [ ] e) [ ]

5. What is your proficiency level of Trends/Climate analysis skills?

a) [ ] b) [ ] c) [ ] d) [ ] e) [ ]

6. What do feel about matching resources for Strategies/business plan?

a) [ ] b) [ ] c) [ ] d) [ ] e) [ ]

123

7. What do you feel about your business management skills?

Business

Management

Skills

Highly

satisfied

Satisfied

Neutral

dissatisfied

Highly

Dissatisfied

Handling

Meeting

Planning

organizing

scheduling

delegating

Reporting

Project

handling

Networking

Team

building

Time

management

Crisis

management