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
abhie32@gmail.com
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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A Study of Major Problems Faced by Entrepreneurs Involved in IT/ITES Sector in
Indore Area.
Abhinandan Pandey;Niranjan Shrivastava2
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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Abhinandan Pandey;Niranjan Shrivastava3
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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A Study of Major Problems Faced by Entrepreneurs Involved in IT/ITES Sector in
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Abhinandan Pandey;Niranjan Shrivastava4
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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Abhinandan Pandey;Niranjan Shrivastava7
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
Frequency Percent Valid Percent Cumulative
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
Strongly Agree 6 12.0 12.0 100.0
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
Strongly Agree 6 12.5 -6.5
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
Frequency Percent Valid Percent Cumulative
Percent
Valid Disagree 7 14.0 14.0 14.0
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
Observed N Expected N Residual
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
Frequency Percent Valid Percent Cumulative
Percent
Valid Strongly Disagree 4 8.0 8.0 8.0
Neutral 9 18.0 18.0 26.0
Agree 28 56.0 56.0 82.0
Strongly Agree 9 18.0 18.0 100.0
Total 50 100.0 100.0
Table
Chi Square Table
Observed N Expected N Residual
Strongly Disagree 4 12.5 -8.5
Neutral 9 12.5 -3.5Agree 28 12.5 15.5
Strongly Agree 9 12.5 -3.5
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
Frequency Percent Valid Percent Cumulative
Percent
Valid Disagree 7 14.0 14.0 14.0
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
Observed N Expected N Residual
Disagree 7 16.7 -9.7
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.
TableFrequency Analysis
Frequency Percent Valid Percent Cumulative
Percent
Valid Strongly Disagree 4 8.0 8.0 8.0
Disagree 13 26.0 26.0 34.0
Neutral 13 26.0 26.0 60.0
Agree 12 24.0 24.0 84.0
Strongly Agree 8 16.0 16.0 100.0
Total 50 100.0 100.0
TableChi Square Table
Observed N Expected N Residual
Strongly Disagree 4 10.0 -6.0
Disagree 13 10.0 3.0
Neutral 13 10.0 3.0
Agree 12 10.0 2.0
Strongly Agree 8 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
Frequency Percent Valid Percent Cumulative
Percent
Valid Strongly Disagree 3 6.0 6.0 6.0
Disagree 9 18.0 18.0 24.0
Neutral 10 20.0 20.0 44.0
Agree 21 42.0 42.0 86.0
Strongly Agree 7 14.0 14.0 100.0
Total 50 100.0 100.0
Table
Chi Square Analysis
Observed N Expected N Residual
Strongly Disagree 3 10.0 -7.0Disagree 9 10.0 -1.0
Neutral 10 10.0 .0
Agree 21 10.0 11.0
Strongly Agree 7 10.0 -3.0
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
Frequency Percent Valid Percent Cumulative
Percent
Valid Disagree 6 12.0 12.0 12.0
Neutral 23 46.0 46.0 58.0
Agree 18 36.0 36.0 94.0
Strongly Agree 3 6.0 6.0 100.0
Total 50 100.0 100.0
TableChi Square Analysis
Observed N Expected N Residual
Disagree 6 12.5 -6.5
Neutral 23 12.5 10.5
Agree 18 12.5 5.5
Strongly Agree 3 12.5 -9.5
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
Frequency Percent Valid Percent Cumulative
Percent
Valid Strongly Disagree 4 8.0 8.0 8.0
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
Observed N Expected N Residual
Strongly Disagree 4 10.0 -6.0
Disagree 9 10.0 -1.0
Neutral 6 10.0 -4.0
Agree 18 10.0 8.0
Strongly Agree 13 10.0 3.0
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.)
TableFrequency Analysis
Frequency Percent Valid Percent Cumulative
Percent
Valid Disagree 6 12.0 12.0 12.0
Neutral 11 22.0 22.0 34.0
Agree 24 48.0 48.0 82.0
Strongly Agree 9 18.0 18.0 100.0
Total 50 100.0 100.0
Table
Chi Square Analysis
Observed N Expected N Residual
Disagree 6 12.5 -6.5
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.
TableFrequency Analysis
Frequency Percent Valid Percent Cumulative
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
Strongly Agree 7 14.0 14.0 100.0
Total 50 100.0 100.0
Table
Chi Square Analysis
Observed N Expected N Residual
Disagree 3 12.5 -9.5
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
Frequency Percent Valid Percent Cumulative
Percent
Valid Disagree 19 38.0 38.0 38.0
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
Observed N Expected N Residual
Disagree 19 16.7 2.3
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
Frequency Percent Valid Percent Cumulative
Percent
Valid Strongly Disagree 4 8.0 8.0 8.0
Disagree 13 26.0 26.0 34.0
Neutral 4 8.0 8.0 42.0
Agree 23 46.0 46.0 88.0
Strongly Agree 6 12.0 12.0 100.0
Total 50 100.0 100.0
Table
Chi Square Analysis
Observed N Expected N Residual
Strongly Disagree 4 10.0 -6.0
Disagree 13 10.0 3.0
Neutral 4 10.0 -6.0
Agree 23 10.0 13.0
Strongly Agree 6 10.0 -4.0
Total 50
Figure
Interpretation
A majority of Respondents
agree with this point
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14. There are unnecessary administrative overheads (such as license clearance, red
tape-ism)Table
Frequency Analysis
Frequency Percent Valid Percent Cumulative
Percent
Valid Disagree 16 32.0 32.0 32.0
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
Observed N Expected N Residual
Disagree 16 16.7 -.7
Neutral 6 16.7 -10.7
Agree 28 16.7 11.3
Total 50
Figure
Interpretation
A majority of Respondents
agree with this point
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15. The government procedures and other procedures cause a significant wastage of time and other resources.
Frequency Analysis
Frequency Percent Valid Percent Cumulative
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
Observed N Expected N Residual
Neutral 15 25.0 -10.0
Agree 35 25.0 10.0
Total 50
Figure
Interpretation
A majority of Respondents
agree with this point
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16. There is a significant level of corruption in the system.
Frequency Analysis
Frequency Percent Valid Percent Cumulative
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
Observed N Expected N Residual
Neutral 16 16.7 -.7
Agree 24 16.7 7.3
Strongly Agree 10 16.7 -6.7
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
Frequency Percent Valid Percent Cumulative
Percent
Valid Disagree 3 6.0 6.0 6.0
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
Observed N Expected N Residual
Disagree 3 12.5 -9.5
Neutral 17 12.5 4.5
Agree 20 12.5 7.5
Strongly Agree 10 12.5 -2.5
Total 50
Figure
Interpretation
A majority of Respondents
agree with this point
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18. There is a manpower crisis in the industry (in terms of headcounts only)
Frequency Analysis
Frequency Percent Valid Percent Cumulative
Percent
Valid Strongly Disagree 6 12.0 12.0 12.0
Disagree 12 24.0 24.0 36.0
Neutral 6 12.0 12.0 48.0
Agree 19 38.0 38.0 86.0
Strongly Agree 7 14.0 14.0 100.0
Total 50 100.0 100.0
Chi Square Analysis
Observed N Expected N Residual
Strongly Disagree 6 10.0 -4.0
Disagree 12 10.0 2.0
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
Frequency Percent Valid Percent Cumulative
Percent
Valid Strongly Disagree 3 6.0 6.0 6.0
Disagree 6 12.0 12.0 18.0
Neutral 7 14.0 14.0 32.0
Agree 27 54.0 54.0 86.0
Strongly Agree 7 14.0 14.0 100.0
Total 50 100.0 100.0
Table
Chi Square Analysis
Observed N Expected N Residual
Strongly Disagree 3 10.0 -7.0
Disagree 6 10.0 -4.0Neutral 7 10.0 -3.0
Agree 27 10.0 17.0
Strongly Agree 7 10.0 -3.0
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)
TableFrequency Analysis
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
Observed N Expected N Residual
Neutral 6 16.7 -10.7
Agree 28 16.7 11.3
Strongly Agree 16 16.7 -.7Total 50
Figure
Interpretation
A majority of Respondents
agree with this point
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21.Layoff is a major issue in industry ( I.e. keeping human force idle in absence of
demand)
Table
V21
Frequency Percent Valid Percent Cumulative
Percent
Valid Strongly Disagree 4 8.0 8.0 8.0
Disagree 3 6.0 6.0 14.0
Neutral 10 20.0 20.0 34.0
Agree 24 48.0 48.0 82.0
Strongly Agree 9 18.0 18.0 100.0
Total 50 100.0 100.0
Table
V21
Observed N Expected N Residual
Strongly Disagree 4 10.0 -6.0
Disagree 3 10.0 -7.0
Neutral 10 10.0 .0
Agree 24 10.0 14.0
Strongly Agree 9 10.0 -1.0
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
Frequency Percent Valid Percent Cumulative
Percent
Valid Disagree 11 22.0 22.0 22.0
Neutral 11 22.0 22.0 44.0
Agree 21 42.0 42.0 86.0
Strongly Agree 7 14.0 14.0 100.0
Total 50 100.0 100.0
Table
V22
Observed N Expected N Residual
Disagree 11 12.5 -1.5
Neutral 11 12.5 -1.5
Agree 21 12.5 8.5
Strongly Agree 7 12.5 -5.5
Total 50
Figure
Interpretation
People have mixed opinion on
this point.
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23.Software piracy is causing a significant problem in the industryTable
Table
V23
Frequency Percent Valid Percent CumulativePercent
Valid Disagree 6 12.0 12.0 12.0
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
Observed N Expected N Residual
Disagree 6 12.5 -6.5
Neutral 13 12.5 .5Agree 17 12.5 4.5
Strongly Agree 14 12.5 1.5
Total 50
Figure
Interpretation
People have mixed opinion
on this point.
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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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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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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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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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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
e. Strongly 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
e. Strongly 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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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
e. Strongly 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
e. Strongly Disagree
9. The level of market risk is very high, and the demand fluctuates
a. Strongly Agree
b. Agree
c. Neutral Opinion
d. Disagree
e. Strongly 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
e. Strongly Disagree
11.There is unnecessary delay in financing projects from the institutions side.
a. Strongly Agree
b. Agree
c. Neutral Opinion
d. Disagree
e. Strongly Disagree
12.The taxation on this industry is unfair
a. Strongly Agree
b. Agree
c. Neutral Opinion
d. Disagree
e. Strongly Disagree
13. The government policies to support the organization are poor
a. Strongly Agree
b. Agree
c. Neutral Opinion
d. Disagree
e. Strongly Disagree
14. There are unnecessary administrative overheads (such as license clearance, red tapism)
a. Strongly Agree
b. Agreec. Neutral Opinion
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d. Disagree
e. Strongly 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
e. Strongly Disagree
16. There is a significant level of corruption in the system.
a. Strongly Agree
b. Agree
c. Neutral Opinion
d. Disagree
e. Strongly Disagree
17. The laws and legal framework is not supporting in India
a. Strongly Agree
b. Agreec. Neutral Opinion
d. Disagree
e. Strongly 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
e. Strongly Disagree
19. The manpower available to work is missing required level of expertise and skills
a. Strongly Agree
b. Agreec. Neutral Opinion
d. Disagree
e. Strongly 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
e. Strongly 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
e. Strongly 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
e. Strongly Disagree
23. Software piracy is causing a significant problem in the industry
a. Strongly Agreeb. Agree
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c. Neutral Opinion
d. Disagree
e. Strongly 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*****************
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