a study on problems faced by it industry in madurai
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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
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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.
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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
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
FREQUENCY PERCENTAGE
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
FREQUENCY PERCENTAGE
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
FREQUENCY PERCENTAGE
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
FREQUENCY PERCENTAGE
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
FREQUENCY PERCENTAGE
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
FREQUENCY PERCENTAGE
VERY DIFFICULT 12 28.6
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
FREQUENCY PERCENTAGE
VERY DIFFICULT 12 28.6
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
Them to Products and Services
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
Them to Products and Services
58
TABLE 12
Positioning of Brand Name of Product or Service
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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
PARTICULARS FREQUENCY PERCENTAGE
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:
NULL HYPOTHESIS (H0):
There is no significant relationship between the current phase of the concern and the mode of
marketing of the concern.
ALTERNATIVE HYPOTHESIS (H1):
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
PARTICULARS FREQUENCY PERCENTAGE
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:
NULL HYPOTHESIS (H0):
There is no significant relationship between the preference of broadband service and the level of
satisfaction of services provided by the broadband service provider.
ALTERNATIVE HYPOTHESIS (H1):
There is significant relationship between the preference of broadband service and the level of
satisfaction of services provided by the broadband service provider.
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
satisfaction of services provided by the broadband service provider.
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
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:
a) Very difficult b) difficult c) moderate d) easy e) very easy
117
8. What do you feel about the procedure for accessing funds from external sources?
a) Very difficult b) difficult c) moderate d) easy e) very easy
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