abhinandan pandey mbaft 50002 mrp

7/30/2019 Abhinandan Pandey Mbaft 50002 Mrp

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Institute of Management Studies

Devi Ahilya Vishwavidyalaya, Indore (M.P.)

A Study of Major Problems Faced by

Entrepreneurs Involved in IT/ITES

Sector in Indore Area.

Major Research Project for the partial fulfilment of the course of Master in Business

Administration

le

24-04-2013

PREPARED AND SUBMITTED BY

Abhinandan Pandey;Niranjan

Shrivastava

MBA FT 2011-13

Roll No 50002

[email protected]

PREPARED UNDER THE GUIDANCE OF

Dr. P.K. Gupta

Dr. Niranjan Shrivastava

(Professor and Senior

Faculty, IMS DAVV Indore)


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A Study of Major Problems Faced by Entrepreneurs Involved in IT/ITES Sector in

Indore Area.

Abhinandan Pandey;Niranjan Shrivastava1

Acknowledgments

I express my heartiest gratitude towards my mentor Mr. Niranjan Shirvastava, and Dr. P.K. Gupta for

their constant support and knowledgeable guidance and supervision which helped me to bring this

research project in its present form.

I also extend my gratefulness towards my course co-ordinator Dr. Kapil Sharma who provided valuable

guidance and support at times when needed.

Finally, I would also love to appreciate the contribution of all the people who spent their precious

moments in filling out the responses to provide me with research data, and all those who directly or

indirectly helped me out to make this project happen.

Abhinandan Pandey

MBA FT 2011-13

Roll No 50002

IMS DAVV Indore


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Indore Area.


Certificate of Originality

I hereby declare that the research paper titled A Study of Major Problems Faced by Entrepreneurs

Involved in IT/ITES Sector in Indore Area. my own work and to the best of my knowledge. It contains

no materials previously published or written by another person, nor material which to a substantial

extent has been accepted for the award of any degree or diploma at DAVV or any other education

institute, except where due acknowledgment, is made in the thesis. Any contribution made to the

research by others, with whom I have worked at DAVV or elsewhere, is explicitly acknowledged in the

thesis.

I also declare that the intellectual content of this thesis is the product of my own work, except to the

extent that assistance from others in the projects design and conception or in style, presentation and

linguistic is acknowledged.

Author Name: Abhinandan Pandey

Signature: ______________


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Contents

Abstract..................................................................................................................................................................................... 6

Introduction ............................................................................................................................................................................ 7

Problem Analysis/Literature Review........................................................................................................................... 9

Objectives ...............................................................................................................................................................................11

Hypotheses ............................................................................................................................................................................11

Research Design ..................................................................................................................................................................13

Data Collection ................................................................................................................................................................13

Data Analysis ...................................................................................................................................................................13

Methods of Data Analysis ...........................................................................................................................................13Results .....................................................................................................................................................................................37

Conclusions ...........................................................................................................................................................................39

Suggestions ...........................................................................................................................................................................39

References .............................................................................................................................................................................40

Appendix B: Questionnaire Design ..............................................................................................................................41


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LIST OF TABLES AND FIGURES

Table 1 ...................................................................................................................................................... 11

Table 2 ...................................................................................................................................................... 14

Table 3 ...................................................................................................................................................... 14

Table 4 ...................................................................................................................................................... 15

Table 5 ...................................................................................................................................................... 15

Table 6 ...................................................................................................................................................... 16

Table 7 ...................................................................................................................................................... 16

Table 8 ...................................................................................................................................................... 17

Table 9 ...................................................................................................................................................... 17

Table 10 .................................................................................................................................................... 18

Table 11 .................................................................................................................................................... 18

Table 12 .................................................................................................................................................... 19

Table 13 .................................................................................................................................................... 19

Table 14 .................................................................................................................................................... 20

Table 15 .................................................................................................................................................... 20

Table 16 .................................................................................................................................................... 21

Table 17 .................................................................................................................................................... 21

Table 18 .................................................................................................................................................... 22

Table 19 .................................................................................................................................................... 22Table 20 .................................................................................................................................................... 23

Table 21 .................................................................................................................................................... 23

Table 22 .................................................................................................................................................... 24

Table 23 .................................................................................................................................................... 24

Table 24 .................................................................................................................................................... 25

Table 25 .................................................................................................................................................... 26

Table 26 .................................................................................................................................................... 27

Table 27 .................................................................................................................................................... 27

Table 28 .................................................................................................................................................... 29

Table 29 .................................................................................................................................................... 30

Table 30 .................................................................................................................................................... 32

Table 31 .................................................................................................................................................... 32

Table 32 .................................................................................................................................................... 32

Table 34 .................................................................................................................................................... 33

Table 35 .................................................................................................................................................... 33

Table 37 .................................................................................................................................................... 34

Table 38 .................................................................................................................................................... 34

Table 39 .................................................................................................................................................... 35

Table 40 .................................................................................................................................................... 35

Table 41 .................................................................................................................................................... 36


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Table 42 .................................................................................................................................................... 36

Table 43 .................................................................................................................................................... 36

Figure 1 ....................................................................................................................................................... 7

Figure 2 ..................................................................................................................................................... 14

Figure 3 ..................................................................................................................................................... 15

Figure 4 ..................................................................................................................................................... 16

Figure 5 ..................................................................................................................................................... 17

Figure 6 ..................................................................................................................................................... 18

Figure 7 ..................................................................................................................................................... 19

Figure 8 ..................................................................................................................................................... 20

Figure 9 ..................................................................................................................................................... 21

Figure 10................................................................................................................................................... 22

Figure 11................................................................................................................................................... 23

Figure 12................................................................................................................................................... 24

Figure 13................................................................................................................................................... 25

Figure 14................................................................................................................................................... 26

Figure 15................................................................................................................................................... 27

Figure 16................................................................................................................................................... 28

Figure 17................................................................................................................................................... 29

Figure 18................................................................................................................................................... 30

Figure 19................................................................................................................................................... 31

Figure 20................................................................................................................................................... 32Figure 21................................................................................................................................................... 33

Figure 22................................................................................................................................................... 34

Figure 23................................................................................................................................................... 35

Figure 24................................................................................................................................................... 36


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Abstract

The present research work is carried out to determine the major issues involved new business in

the field of Information Technology and IT enabled services, (such as BPO and call centers.), to

the area of Indore City. There are about 200 different organizations working as regular/ part

time organizations in the field of IT/ ITES organizations that on regular terms face problems

various business problems, such as manpower shortage, lack of professionalism etc. This

research work is an attempt to identify major problems that are faced by new and existing

business person to get them idea about major challenges before venturing into field in this area.


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Introduction(ASSOCHAM, 2012). The share of IT / ITeS in India's GDP stands at an impressive 5.8% in 2008-09 from

1.2 % in 1997-98. The overall Indian Software & Services industry revenue has grown from US$ 10.2

billion in 2001-02 to reach US $ 58.7 billion in 2008-09.IT / ITeS sectors overall CAGR was 26.9%between 2001-02 to 2008-09. As of 2008-09 IT / ITeS sector provides direct employment to about 2.20

million people compared to just 0.52 million in 2000-01.

Figure

The technology industry has been majorly affected by three factors, which are

1. Advancement of new technologies such as introduction of high speed computing devices

2. and remote job submission etc.

3. Advent of Globalization and Liberalization in south Asian nations (China and India). These

nations have together emerged as a distinct force in the global market.

4. Introduction of new business models by several MNCs and change in global business

perspective; new business trends such as global marketing, outsourcing, business process

transformation etc. This has change the dynamics of the market very significantly

Following the above factors the IT/ITES industry in India has registered double digit growth in

the last two decades. There has also a great development in the service sector of India post

liberalization.

Tier 2 cities like Indore have become emerging service cities for the nation as they have

registered themselves into the list of top avenues for the selection for venturing into service

markets. These cities have a few obvious advantages when it comes to the creation of new


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business in IT / ITES

1. Low Infrastructure Cost

2. Low Cost of Living Index

3. Ample Availability of Human Resource


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Problem Analysis/Literature ReviewMost of the literature available for review raises the following key points to be considered while carrying

out the research.

1. There has been a remarkable growth in the field of information technology

2. /IT enabled services in the past decade.

(http://www.mptrifac.org/PotSector/SProjectProfiles/IT%20Park%20-%20Indore.pdf)

3. India has emerged out as a major source for IT services.

4. India has a great potential for being a great IT service nation on the account of following factors

a. Great Availability of Manpower

b. An accumulated trade deficit

c. which makes it mandatory for this nation to increase exports.

d. Presence of a well-developed service sector.

e. Government Policies and reforms post Liberalization

5. Tier 2 cities (Like Indore, Pune, and Bangalore) are becoming favourite choice of newbusinessmen to venture into new business in IT sector.

6. The new entrepreneurs are facing problems in following major heads.

a. Market Related Issues

i. Unstructured Market: The market lacks a formal structure and is monopolized

by bigger organizations. However, there are fewer entry barriers.

ii. Lack of Marketing Information Sources: There is absence of a well-defined

Marketing Information System (MIS)

iii. Software Duplication (not to be confused with Software Piracy): Two (or more)

different organizations are developing same piece of software for same purpose

for different organizations and therefore wasting manpower and other

resources

iv. Competition from small Businesses. Entry of small firms increases level of

competition and therefore commitment to service.

b. Financial Issues

i. Lack of Institutional Support: Most of the organized finance is government

control, which has strict and stiff measures towards project financing.

ii. Market Risk, Risk of Demand Fluctuation: Since the industry is dependent upon

other industries for its demand, a slight fluctuation in the prosperity of the

client organization may adversely affect industrial growth. The industry is

tertiary in nature and therefore most of the services provided by it are not vital

to any organization and can be bypassed at time not needed.iii. Financing overheads: The cost of financing projects may be high.

iv. Delay in financing projects: Due to administrative inefficacies, project financing

may get delayed.

v. Inappropriate Tax Structure: Double taxation or unfair taxation that may result

into losses.

vi. Poor Government Policies in giving Benefits: Poor subsidization and lack of SEZs

etc., so lack of government support.

c. Administrative Issues

i. Administrative Overheads: This included delays in getting a licence cleared from

the government to do some activity. This also included all the administrative

expenses one has to incur in order to start or to develop an organization.


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ii. Laid Back Procedures: The procedures involved in clearance may be very lengthy

and more conventional and less practical.

iii. Corruption/Bribery: There can be corruption at various levels.

iv. Poor Legislation: Lack of legal support or legal barricades

d. Human Resource Problem

i. Lack of Labour Force: Unavailability of Labour/ Professionals in the Area.

ii. Lack of Expertise among Professionals: New recruits may be having lack of

fundamental concepts, or desired level of technical expertise.

iii. Attrition: Shifting of jobs by labour forces.

iv. Layoff: Inability to properly channelize human potential within an organization

due to lack of demand.

e. Other Problems

i. Lack of organized business structure: Inappropriate existence of trade unions,

labour unions etc., which block smooth organizational functioning.

ii. Software piracy: Use of pirated software that destroys market potential7. IT/ITES industry will be responsible for development of tier 2 cities, since it will be one of the

key organizations fostering all kinds of economic activities of that region.

8. Demand for these services is most likely to increase up to year 2050, at a steady pace


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Objectives

The major objectives of this research work are

1. To test various issues faced by new entrepreneurs in IT/ITES industry to be real barriers in

development of new business/existing business

2. To derive a solid conclusion framing all the issues together and to find out key issues involved

Hypotheses

The present research work is intended to test the significance of following hypotheses.

Entrepreneurs of Indore city involved in IT/ITES industry are facing problems. The research aims

at checking the validity of the following heads.

Table

V1 1. The information technology industry is facing a major crisis in

various aspects these days

V2 2. Establishment of a new IT business is a complicated task

V3 3. What is your opinion towards the shifting of business processes

from metros to tier-2 cities?

V4 4. How much influence does market structure makes in opening and

running an IT/ITES business in a tier 2 city.

V5 5. Determine the capacity of the market information system in terms

of various criteria such as timeliness, accuracy, information

friendliness. Etc.

V6 6. How much competition from other small businesses influences

your business strategy.

V7 7. Do you feel that there are two or more firms working on similarprojects causes significant loss of business efforts?

V8 8. At the time of acquisition of financial resources ( such as working

capital) the problems levied by financing institutions were major

problem

V9 9. The level of market risk is very high, and the demand fluctuates

V10 10. There is unnecessarily high level of financing overheads, (such

as interest rates, processing charges etc.)

V11 11. There is unnecessary delay in financing projects from the

institutions side.


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V12 12. The taxation on this industry is unfair

V13 13. The government policies to support the organization are poor

V14 14. There are unnecessary administrative overheads (such as

license clearance, red tape-ism)

V15 15. The government procedures and other procedures cause a

significant wastage of time and other resources.

V16 16. There is a significant level of corruption in the system.

V17 17. The laws and legal framework is not supporting in India

V18 18. There is a manpower crisis in the industry (in terms of

headcounts only)

V19 19. The manpower available to work is missing required level ofexpertise and skills

V20 20. Attrition is a major issue in industry. (I.e. the skilled

professionals of an organization tend to leave the job when given a

better offer)

V21 21. Layoff is a major issue in industry ( I.e. keeping human force idle

in absence of demand)

V22 22. There is a lack of an organized business structure, and existence

of trade unions and worker organization make the business

unfruitful

V23 23. Software piracy is causing a significant problem in the industry


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Research Design

Data Collection

The data will be collected in by primary and secondary methods

See appendix for the questionnaire.

The data will be collected from professionals of Indore city through various means

1. General Visit

2. Web based Questionnaire

3. E-Mail Solicitation

4.

Telephonic Interview

5. References/ Sourcing through Acquaintances.

Secondary Methods: Data collection from various agencies

Sample Size: 50

No of Samples: 25

Please see Appendix 1 for Data Collection and Summary.

Data Analysis

The aforementioned hypotheses shall be tested for respective level of significance. The

hypotheses with higher significance level shall be treated as prime reasons while others are

rejected.

Methods of Data Analysis

a. Percentage Analysis

b. Correlation Analysis

c. Chi Square Testing


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`

1. The information technology industry is facing a major crisis in various aspects these days

Table

Frequency Analysis

Frequency Percent Valid Percent Cumulative

Percent

Valid Strongly Disagree 3 6.0 6.0 6.0

Disagree 27 54.0 54.0 60.0

Agree 13 26.0 26.0 86.0

Strongly Agree 7 14.0 14.0 100.0

Total 50 100.0 100.0

TableChi Square Table

Observed

N

Expected

N

Residual

Strongly Disagree 3 12.5 -9.5

Disagree 27 12.5 14.5

Agree 13 12.5 .5

Strongly Agree 7 12.5 -5.5

Total 50

Figure

Interpretation:

Majority of respondents

disagree with this point


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2. Establishment of a new IT business is a complicated task

TableFrequency Analysis


Percent

Valid Disagree 12 24.0 24.0 24.0

Neutral 10 20.0 20.0 44.0

Agree 22 44.0 44.0 88.0


Total 50 100.0 100.0

Table

Chi Square Analysis

Observed N Expected N Residual

Disagree 12 12.5 -.5

Neutral 10 12.5 -2.5

Agree 22 12.5 9.5


Total 50

Figure

Interpretation

A majority of Respondents

agree with this point


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3. What is your opinion towards the shifting of business processes from metros to

tier-2 cities?

Table

Frequency Analysis


Percent


Neutral 7 14.0 14.0 28.0

Agree 13 26.0 26.0 54.0

Strongly Agree 23 46.0 46.0 100.0

Total 50 100.0 100.0

Table

Chi Square Table


Disagree 7 12.5 -5.5

Neutral 7 12.5 -5.5

Agree 13 12.5 .5

Strongly Agree 23 12.5 10.5

Total 50

Figure

Interpretation

Respondents strongly agree with

this point.


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4. How much influence does market structure makes in opening and running an IT/ITES

business in a tier 2 city.

Table

Frequency Analysis


Percent


Neutral 9 18.0 18.0 26.0

Agree 28 56.0 56.0 82.0


Total 50 100.0 100.0

Table

Chi Square Table



Neutral 9 12.5 -3.5Agree 28 12.5 15.5


Total 50

Figure

Interpretation

Respondents agree with this

point.


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5. Determine the capacity of the market information system in terms of various criteriasuch as timeliness, accuracy, information friendliness. Etc.Table

Frequency Analysis


Percent


Neutral 22 44.0 44.0 58.0

Agree 21 42.0 42.0 100.0

Total 50 100.0 100.0

Table

Chi Square Table



Neutral 22 16.7 5.3

Agree 21 16.7 4.3

Total 50

Figure

Interpretation

A majority of Respondents agree

with this point


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6. How much competition from other small businesses influences your business strategy.



Percent


Disagree 13 26.0 26.0 34.0

Neutral 13 26.0 26.0 60.0

Agree 12 24.0 24.0 84.0


Total 50 100.0 100.0

TableChi Square Table



Disagree 13 10.0 3.0

Neutral 13 10.0 3.0

Agree 12 10.0 2.0


Total 50

Figure

Interpretation

From the above

information we canconclude that people have

mixed opinions on this

point.


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7. Do you feel that there are two or more firms working on similar projects causes

significant loss of business efforts?

Table

Frequency Analysis


Percent


Disagree 9 18.0 18.0 24.0

Neutral 10 20.0 20.0 44.0

Agree 21 42.0 42.0 86.0


Total 50 100.0 100.0

Table

Chi Square Analysis


Strongly Disagree 3 10.0 -7.0Disagree 9 10.0 -1.0

Neutral 10 10.0 .0

Agree 21 10.0 11.0


Total 50

^

Figure

Interpretation

From the above

information we can

conclude that peoplehave mixed opinions on

this point.


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8. At the time of acquisition of financial resources ( such as working capital) the

problems levied by financing institutions were major problem

Table

Frequency Analysis


Percent


Neutral 23 46.0 46.0 58.0

Agree 18 36.0 36.0 94.0


Total 50 100.0 100.0

TableChi Square Analysis



Neutral 23 12.5 10.5

Agree 18 12.5 5.5


Total 50

Figure

InterpretationFrom the given information

we can conclude that people

have neutral opinion on this

point.


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9. The level of market risk is very high, and the demand fluctuates

TableV9


Percent


Disagree 9 18.0 18.0 26.0

Neutral 6 12.0 12.0 38.0

Agree 18 36.0 36.0 74.0

Strongly Agree 13 26.0 26.0 100.0

Total 50 100.0 100.0

Table

V9




Neutral 6 10.0 -4.0

Agree 18 10.0 8.0


Total 50

Figure

Interpretation

The respondents agree with

this point.


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10. There is unnecessarily high level of financing overheads, (such as interest rates,

processing charges etc.)



Percent


Neutral 11 22.0 22.0 34.0

Agree 24 48.0 48.0 82.0


Total 50 100.0 100.0

Table

Chi Square Analysis



Neutral 11 12.5 -1.5

Agree 24 12.5 11.5

Strongly Agree 9 12.5 -3.5Total 50

Figure

Interpretation

The respondents agree with

this point.


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11. There is unnecessary delay in financing projects from the institutions side.



Percent

Valid Disagree 3 6.0 6.0 6.0Neutral 3 6.0 6.0 12.0

Agree 37 74.0 74.0 86.0


Total 50 100.0 100.0

Table

Chi Square Analysis



Neutral 3 12.5 -9.5

Agree 37 12.5 24.5

Strongly Agree 7 12.5 -5.5Total 50

Figure

Interpretation

A wide majority

respondents favour this

point.


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12. The taxation on this industry is unfair

Frequency Analysis


Percent


Neutral 19 38.0 38.0 76.0

Agree 12 24.0 24.0 100.0

Total 50 100.0 100.0

Table

Chi Square Analysis



Neutral 19 16.7 2.3

Agree 12 16.7 -4.7

Total 50

Figure

Interpretation

Respondents have mixed

opinion.


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13. The government policies to support the organization are poor

Frequency Analysis


Percent


Disagree 13 26.0 26.0 34.0

Neutral 4 8.0 8.0 42.0

Agree 23 46.0 46.0 88.0


Total 50 100.0 100.0

Table

Chi Square Analysis




Neutral 4 10.0 -6.0

Agree 23 10.0 13.0


Total 50

Figure

Interpretation




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14. There are unnecessary administrative overheads (such as license clearance, red

tape-ism)Table

Frequency Analysis


Percent


Neutral 6 12.0 12.0 44.0

Agree 28 56.0 56.0 100.0

Total 50 100.0 100.0

Table

Chi Square Analysis


Disagree 16 16.7 -.7

Neutral 6 16.7 -10.7

Agree 28 16.7 11.3

Total 50

Figure

Interpretation




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15. The government procedures and other procedures cause a significant wastage of time and other resources.

Frequency Analysis


Percent

Valid Neutral 15 30.0 30.0 30.0

Agree 35 70.0 70.0 100.0

Total 50 100.0 100.0

Chi Square Analysis


Neutral 15 25.0 -10.0

Agree 35 25.0 10.0

Total 50

Figure

Interpretation




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16. There is a significant level of corruption in the system.

Frequency Analysis


Percent

Valid Neutral 16 32.0 32.0 32.0

Agree 24 48.0 48.0 80.0

Strongly Agree 10 20.0 20.0 100.0

Total 50 100.0 100.0

Table

Chi Square Analysis


Neutral 16 16.7 -.7

Agree 24 16.7 7.3


Total 50

Figure

Interpretation

A majority of respondents

are neutral on this point


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17. The laws and legal framework is not supporting in India Frequency Analysis


Percent


Neutral 17 34.0 34.0 40.0Agree 20 40.0 40.0 80.0

Strongly Agree 10 20.0 20.0 100.0

Total 50 100.0 100.0

Table

Chi Square Analysis



Neutral 17 12.5 4.5

Agree 20 12.5 7.5


Total 50

Figure

Interpretation




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18. There is a manpower crisis in the industry (in terms of headcounts only)

Frequency Analysis


Percent


Disagree 12 24.0 24.0 36.0

Neutral 6 12.0 12.0 48.0

Agree 19 38.0 38.0 86.0


Total 50 100.0 100.0

Chi Square Analysis




Neutral 6 10.0 -4.0

Agree 19 10.0 9.0Strongly Agree 7 10.0 -3.0

Total 50

Figure

Interpretation

People have mixed opinion

on this point.


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19.The manpower available to work is missing required level of expertise and skills Table

Table

Frequency Analysis


Percent


Disagree 6 12.0 12.0 18.0

Neutral 7 14.0 14.0 32.0

Agree 27 54.0 54.0 86.0


Total 50 100.0 100.0

Table

Chi Square Analysis



Disagree 6 10.0 -4.0Neutral 7 10.0 -3.0

Agree 27 10.0 17.0


Total 50

Figure

Interpretation

Respondents strongly agree

with this point.


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20.Attrition is a major issue in industry. (I.e. the skilled professionals of an

organization tend to leave the job when given a better offer)


Frequency Percent Valid Percent CumulativePercent

Valid Neutral 6 12.0 12.0 12.0

Agree 28 56.0 56.0 68.0

Strongly Agree 16 32.0 32.0 100.0

Total 50 100.0 100.0

Table

Chi Square Analysis


Neutral 6 16.7 -10.7

Agree 28 16.7 11.3

Strongly Agree 16 16.7 -.7Total 50

Figure

Interpretation




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21.Layoff is a major issue in industry ( I.e. keeping human force idle in absence of

demand)

Table

V21


Percent


Disagree 3 6.0 6.0 14.0

Neutral 10 20.0 20.0 34.0

Agree 24 48.0 48.0 82.0


Total 50 100.0 100.0

Table

V21




Neutral 10 10.0 .0

Agree 24 10.0 14.0


Total 50

Figure

Interpretation

Respondents agree with this

point.


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22.There is a lack of an organized business structure, and existence of trade unions

and worker organization make the business unfruitful

TableV22


Percent


Neutral 11 22.0 22.0 44.0

Agree 21 42.0 42.0 86.0


Total 50 100.0 100.0

Table

V22


Disagree 11 12.5 -1.5

Neutral 11 12.5 -1.5

Agree 21 12.5 8.5


Total 50

Figure

Interpretation

People have mixed opinion on

this point.


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Indore Area.


23.Software piracy is causing a significant problem in the industryTable

Table

V23

Frequency Percent Valid Percent CumulativePercent


Neutral 13 26.0 26.0 38.0

Agree 17 34.0 34.0 72.0

Strongly Agree 14 28.0 28.0 100.0

Total 50 100.0 100.0

Table

V23



Neutral 13 12.5 .5Agree 17 12.5 4.5


Total 50

Figure

Interpretation

People have mixed opinion

on this point.


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Indore Area.


ResultsSR QUERY Opinion of Most

of the

Respondents

V1 1. The information technology industry is facing a major crisis in

various aspects these days

Disagree

V2 2. Establishment of a new IT business is a complicated task Agree

V3 3. What is your opinion towards the shifting of business processes

from metros to tier-2 cities?

Strongly Agree

V4 4. How much influence does market structure makes in opening and

running an IT/ITES business in a tier 2 city.

Agree

V5 5. Determine the capacity of the market information system in terms

of various criteria such as timeliness, accuracy, information

friendliness. Etc.

Agree/Neutral

V6 6. How much competition from other small businesses influences

your business strategy.

Undecided

V7 7. Do you feel that there are two or more firms working on similar

projects causes significant loss of business efforts?

Agree

V8 8. At the time of acquisition of financial resources ( such as working

capital) the problems levied by financing institutions were major

problem

Agree/Neutral

V9 9. The level of market risk is very high, and the demand fluctuates Undecided

V10 10. There is unnecessarily high level of financing overheads, (such

as interest rates, processing charges etc.)

Agree

V11 11. There is unnecessary delay in financing projects from the

institutions side.

Agree

V12 12. The taxation on this industry is unfair Undecided

V13 13. The government policies to support the organization are poor Agree

V14 14. There are unnecessary administrative overheads (such as

license clearance, red tape-ism)

Agree

V15 15. The government procedures and other procedures cause a

significant wastage of time and other resources.

Agree

V16 16. There is a significant level of corruption in the system. Agree


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Indore Area.


V17 17. The laws and legal framework is not supporting in India Agree

V18 18. There is a manpower crisis in the industry (in terms of

headcounts only)

Undecided

V19 19. The manpower available to work is missing required level of

expertise and skills

Agree

V20 20. Attrition is a major issue in industry. (I.e. the skilled

professionals of an organization tend to leave the job when given a

better offer)

Agree

V21 21. Layoff is a major issue in industry ( I.e. keeping human force idle

in absence of demand)

Agree

V22 22. There is a lack of an organized business structure, and existence

of trade unions and worker organization make the business

unfruitful

Undecided

V23 23. Software piracy is causing a significant problem in the industry Undecided


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Indore Area.


Conclusions

From the percentage analysis and Square test we figure out the following conclusions

1. A majority of professionals believe that

a. The IT/ITES industry isnt facing a major crisis these days.

b. Professionals believe that establishment of IT Business is not a very complicated task.

c. The professionals favour the trend of shifting of IT/ITES business to tier-2 cities. They

consider this move to be advantageous

d. Professionals dont think that there is an acute shortage of manpower, thought the

manpower requires a desired level of expertise

e. Professionals believe that government policies are not favourable to IT Entrepreneurs

and government is not taking solid steps to help out entrepreneurs. Moreover they also

believe that there is corruption in the system and the government procedure are laid

back.

f. Human resource related problems like layoff and attrition are prevalent in the industry.

g. Professionals believe that there is not crisis of manpower in the industry. However

other Human Resource related problems such as attrition and layoff are prevalent

Suggestions

The following points are suggested in the purview of this research

1. The present report is beneficial from finance point of view as it concludes there can be major

issues in financing of projects concerned with delay of finance.

2. The report is beneficial from HR point of view keeping in mind the point of layoff and attrition.

3. This report also reveals that government procedures are not being considered to be beneficial

by the entrepreneurs.

4. The report also indicated that there is a lack of market structure; however entrepreneurs seem

to be satisfied with the type of market information system.


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Indore Area.


References

Literature Review

o NASSCOM Web Site

o India.gov.in

o Vcsdata.org

o Indiatimes.com

Research Design

o Research Methodology, Dr. C.R. Kothari, Vikas Publishing House

o IBM SPSS User Manual

Information Technology

o Software Engineering, IAN Sommerwville, Prentice Hall Publicationo Structured System analysis and Design, Elias M Awad Vikas Publishing House


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Appendix A Chi Square Test Statistics

Test Statistics

V1 V2 V3 V4 V5 V6 V7 V8

Chi-Square 26.480a

11.120a

13.680a

26.960a

8.440b

6.200c

18.000c

21.840a

df 3 3 3 3 2 4 4 3

Asymp. Sig. .000 .011 .003 .000 .015 .185 .001 .000

Test Statistics

V9 V10 V11 V12 V13 V14 V15 V16

Chi-Square 12.600a

15.120a

64.880a

1.960a

26.600b

14.560c

8.000c

5.920a

df 4 3 3 2 4 2 1 2

Asymp. Sig. .013 .002 .000 .375 .000 .001 .005 .052

Test Statistics

V17 V18 V19 V20 V21 V22 V23

Chi-Square 13.840a

12.600a

37.200a

14.560a

28.200b

8.560c

5.200c

df 3 4 4 2 4 3 3

Asymp. Sig. .003 .013 .000 .001 .000 .036 .158


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Indore Area.


Appendix B: Questionnaire Design

Survey FormSub: Survey conducted to determine key problems in IT/ITES industries of tier-2 cities.

Dear Respondent

Please help us by filling out the questionnaire below by answering the questions asked in the

required manner.

1. The information technology industry is facing a major crisis in various aspects these daysa. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree

e. Strongly Disagree

2. Establishment of a new IT business is somewhat a complicated task

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


3. What is your opinion towards the shifting of business processes from metros to tier-2 cities?

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


4. How much influence does market structure makes in opening and running an IT/ITES business in a tier 2

city.

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagreee. Strongly Disagree

5. Determine the capacity of the market information system in terms of various criteria such as timeliness,

accuracy, information friendliness. Etc.

a. Perfect

b. Good

c. Average

d. Poor

e. Major Issue

6. How much competition from other small businesses influences your business strategy.

a. Extreme

b. Consolidated

c. Medium

d. Low


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Indore Area.


e. Negligible

7. Do you feel that there are two or more firms working on similar projects causes significant loss of

business efforts?

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


8. At the time of acquisition of financial resources ( such as working capital) the problems levied by

financing institutions were major problem

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


9. The level of market risk is very high, and the demand fluctuates

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


10.There is unnecessarily high level of financing overheads, (such as interest rates, processing

charges etc.)

a. Strongly Agree

b. Agree

c. Neutral Opiniond. Disagree


11.There is unnecessary delay in financing projects from the institutions side.

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


12.The taxation on this industry is unfair

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


13. The government policies to support the organization are poor

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


14. There are unnecessary administrative overheads (such as license clearance, red tapism)

a. Strongly Agree

b. Agreec. Neutral Opinion


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Indore Area.


d. Disagree


15. The government procedures and other procedures cause a significant wastage of time and other

resources.

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


16. There is a significant level of corruption in the system.

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


17. The laws and legal framework is not supporting in India

a. Strongly Agree


d. Disagree


18. There is a manpower crisis in the industry (in terms of headcounts only)

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


19. The manpower available to work is missing required level of expertise and skills

a. Strongly Agree


d. Disagree


20. Attrition is a major issue in industry. (I.e. the skilled professionals of an organization tend to leave the

job when given a better offer)

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


21. Layoff is a major issue in industry ( I.e. keeping human force idle in absence of demand)

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


22. There is a lack of an organized business structure, and existence of trade unions and worker organization

make the business unfruitful

a. Strongly Agree

b. Agree

c. Neutral Opinion

d. Disagree


23. Software piracy is causing a significant problem in the industry

a. Strongly Agreeb. Agree


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Indore Area.

c. Neutral Opinion

d. Disagree


24. Do you find a problem that is not mentioned in this survey? Kindly mention. You can write more than one

problems, and take an additional sheet if necessary.

25. What is the suggestion you would want to frame to successfully conduct a business in this field? Or rather

explain you demands and expectation from the industry to get a flourishing environment to develop a

business.

Kindly tell us a little about yourself

Name

Age

Gender

Profession

Designation

Industry

Nature of Business: Self Run/ Other

Employee Turnover

Phone No

Address

*****************END OF THE REPORT*****************

abhinandan pandey mbaft 50002 mrp

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