Information Technology It Can Be Defined

Published Date: 02 Nov 2017

Information technology (IT) can be defined in various ways, but is broadly considered to encompass the use of computers and telecommunications equipment to store, retrieve, transmit and manipulate data. The term is commonly used as a synonym for computers and computer networks, but it also encompasses other information distribution technologies such as television and telephones.

In 3000 BC, the Sumerians in Mesopotamia were the first to develop the writing. This was the first tryst of human beings with storing, manipulating and communicating information. In purview of today’s meaning of Information technology, it appeared in the modern sense in 1958in an article that was published by Harvard Business Review.

The Information technology has been growing and developing from four basic phases. They are: pre mechanical, mechanical, electro mechanical and electronic. In simple jargon, information technology can be stated as management of computer based information systems.

Even in the pre historic era, when man thought exchanging a stone for wheat made complete sense, they used to keep count of things using sticks and stone. "Man was always pressed for information and used various means to understand, identify, store and revive this information. For many a thousand years, various devices have been used to aid computation. From the earliest tally sticks to today’s tablets, information technology has grown. The earliest known mechanical analog computer- Antikythera mechanism was also the earliest known geared mechanism. There was no turning back to information technology and it has grown manifold from databases, data storage, data retrieval, data transmission and data manipulation."

The worldwide spending in information technology has grown to a staggering 3,628 billion U.S dollars. Every company- partnership, joint venture, every type of industry- agriculture, retail and just anybody from a start up to a multinational makes use of information technology to connect, communicate and collaborate.

Technology before made use of punched tapes that were long and striped and were represented by a series of holes. Today with wireless solutions and cloud computing coming in, such technology is obsolete. During the second world war, electronic data storage was used in modern computers. Then A Williams tube based on standard cathode ray tube, but the information had to be continuously refreshed due to presence of volatile memory and tended to be lost once power was gone. This is a far cry from today’s scenario where even if you forget to take a backup a device can retrieve your unsaved texts as most digital data is stored magnetically on hard disk drives and the capacity worldwide to store information ha only being doubling .

Thus, information technology today is beyond computers or electronic tools. It is the way of life. It is all about communicating in real time and making sense of the data to fulfill purposes for larger good of the society. It has become an indispensable part of one’s lifestyle. A person who is not technology savvy is a rarity in today’s fast paced globalized era. The one thing that is driving the information technology to take leaps and bounds is: communication.

1.1.1 The future of Information Technology

Change is the only constant – is the best way to sum up the future of information technology. The pace at which information technology is changing can knock down the very pillars of it. It is constantly evolving and refining. Stronger security processes, new operating systems and virtual real time communication has been the call of the day.

Communication has never been easier. Information technology is penetrating even rural areas and people are becoming technologically savvy throughout. The future of operations in any business lies in information technology. Communication has been facilitated on a real time basis and the future is all about the virtual world.

What will drive information technology will be the sophisticated demands of the users. Where people once approved of using the good old paper to store information, they are opting for virtual server space. Letters and posts are a thing of the past with emails, messenger systems taking over. There is existence and dominance of new technologies such as SSD’s and high speeds and unified networking.

Collaborative development will be highly dominant in the future with customers and companies teaming up to create more specialized and personalized solutions. Level of access to IT resources will determine the withstanding and competence of the companies. If user needs will not be fulfilled then they will simply go out and get their own information systems in place.

Social networking will be one of the key drivers of information technology. Social media will be used for professional, personal means, for advertising, networking and beyond. Agility and flexibility will be the main focus and the processes, technologies, software’s will acknowledge this shift. However, this can also pose as a threat and challenge as with such fast paced changes, it will be taxing to keep up with user expectations. Many a times technology will become obsolete even without ts full potential being realized.

Also, information technology will see less of loyalty towards a particular operator or system because simplification, standardization, modularity and integration will be the primary needs and organizations will not mind being flexible to change operation and information systems based on their demands.

Collaboration and data flexibility will be the highlights as a scalable and dynamic infrastructure will breakthrough traditional enterprise architecture. Cloud computing is the future of information technology which has been stated time and again and is making major breakthroughs. Cloud infrastructures will make it possible to offer secure extranets that organizations will be able to leverage securely and also facilitate more specialized services which will act as catalyst for efficiency.

Security will also be one issue as everyone will opt for stronger security and data privacy and opt for information communication systems that are commensurate with their specific security requisites. All in all information technology will lead the day.

1.1.2 Advantages of Information Technology

As stated earlier, information technology primarily deals with computer applications. Today’s work environment irrespective of type of business model, kind of work, scale of work etc is highly dependent on information technology.

Information technology is utmost significant for any organization to sustain and survive in today’s fast pace globalized world. All the work, parking tickets, ordering of meals is completely automated. IT professionals are now working overtime to make sensitive data rare to get. The advancement of IT has led to –

Administration of systems throughout

Culture development and real time communication

Streamlining of business processes and upgradation in a timely manner

Manipulation, protection and retrieval of sensitive information

The benefits that information technology has brought has been manifold and in various areas. Few of the innumerable benefits can be stated as follows-

Globalization-

True globalization and its full potential is only being realized through information systems. The automated systems have been able to make geographical boundaries fade and pave way into making the world a truly global village. Linguistic barriers have no longer been a problem. Communication has become cheaper and time constraints have also been overcome.

Cost-effective-

Internet business processes have made many businesses more productive and increased their client list at cheaper rates. Clutter free working conditions and a global client list have been made possible due to information technology. Internet has by far been the biggest USP of information technologies.

Communication-

Quick, efficient and real time communication is what rules the roost today. It is vital for any kind of business, organization, formal and informal relationships in the world. Information technology makes it easier to connect faster and facilitates communicating when and where required. Like minded individuals can be identified, having a global team is facilitated and strengthening of ties takes place.

Storing and protecting information-

Low cost business options to store and maintain information is every organizations point of view to have information systems in place. Virtual vaults, security systems make up the plus points as well as the challenges of information technology. Hacking of technical data, viruses can be overcome by information technologies.

Lastly, information technology creates job opportunities.

1.1.3 Disadvantages of information technology

Implementation Expenses

Every business must consider startup costs when implementing any type of information technology system. "In addition to the cost of hardware and software, some technology vendors require businesses to purchase user licenses for each employee that will be operating the system. Businesses must examine the cost of training employees in unfamiliar technology. Although basic information technology systems may be user friendly, advanced programs still require formal instruction by an expert consultant. In addition to the startup expenses, information technology systems are expensive to maintain. Systems malfunction, and when they do, businesses must engage skilled technicians to troubleshoot and make the necessary repairs. These expenses present a major disadvantage of information technology in business, particularly to businesses that are entering the technology era for the first time."

Job Elimination

Implementing information technology into business operations can save a great deal of time during the completion of daily tasks. "Paperwork is processed immediately, and financial transactions are automatically calculated. Although businesses may view this expediency as a boon, there are untoward effects to such levels of automation. As technology improves, tasks that were formerly performed by human employees are now carried out by computer systems. For example, automated telephone answering systems have replaced live receptionists in many organizations. This leads to the elimination of jobs and, in some cases, alienation of clients. Unemployed specialists and once-loyal employees may have difficulty securing future employment."

Security Breaches

The ability to store information in an electronic database facilitates quicker, more efficient communication. "In the past, an individual would sift through stacks of paper records to retrieve data. With properly implemented technology, information can be recovered at the touch of a button. Although information technology systems allow business to be conducted at a faster pace, they are not without their flaws. Information technology systems are vulnerable to security breaches, particularly when they are accessible via the Internet. If appropriate measures are not in place, unauthorized individuals may access confidential data. Information may be altered, permanently destroyed or used for unsavory purposes."

Need And Rationale of the study

The focus of my study will be determining the effect of IT in organization’s productivity. Groceries retail is an unorganized sector in India. Some of the big players are emerging into the markets but the problem is, there is not enough regulations to make the market organized. Moreover due to the advancement of information technology the shopping behavior of customers have changed. In modern times people don’t have enough time to go to different kirana shops to get their groceries. Basically people want everything under a roof. As a result of that players like Food World, Reliance Fresh, Star Bazaar, Big Bazaar have emerged into the groceries retail market.

So, this study will focus on determining to what extent information technology has affected the overall productivity of the entire organization.

1.3 PURPOSE OF THE STUDY

The study is focused upon analyzing the factors that affect the organizations productivity. Basically the study is divided into three parts

Effectiveness of the software

Effectiveness of the employees

Effectiveness of the management

The study has taken into consideration that

Overall Productivity = Software effectiveness + Employee effectiveness + Management effectiveness

Therefore the impact of information technology in all these three factors are being analyzed in the study.

1.4 ReSUME OF SUCEEDING CHAPTERS

This chapter consisted of a small introduction to the Information Technology scenario. In the coming chapters, we will go through the review of literature followed by the research methodology. After that, we would look into the groceries retail industry and then do the analysis and interpretation of primary data. This would then set ground for mentioning the findings and finally the suggestions.

2.1 introduction

"A literature review is an account of what has been published on a topic by accredited scholars and researchers. The purpose of reviewing several literatures over a topic is to gain knowledge and ideas of what have been established on a topic, and what their strengths and weaknesses are. As a piece of writing, the literature review is defined by a guiding concept e.g., the research problem and is not merely a descriptive list of the material available, or a set of summaries."

Besides enlarging one’s knowledge about the topic, writing a literature review does the following:

Synthesizes results into a summary of what is known and what is not

Identifies areas of controversy in the literature

Formulates questions that need further research

2.2 How Review has been conducted

For the purpose of this research, a total of 8 research papers relating to the topic were reviewed. A document was created and maintained by entering summaries and variables for each paper/book individually. Finally, the need was recognized and a concise essay was made so that entire information flowed in a thoughtful manner ending up into the research problem.

2.3 Conclusion

Article 1: Impact of information technology on public accounting firm productivity (Rajiv D. Banker, 2002)

Summary

The research article spoke about the impact of IT implementation on the production function of an international public accounting firm. It helps in implementing new software and groupware for knowledge sharing in 1998. It provides insight about the potential impact on work efficiency at individual user, business processes and work group level.

IT incorporated significant improvement in productivity providing support for the value of audit automation and knowledge sharing in public accounting firms. It also facilitates the decision making process of audit professionals and the databases provided critical support for audit decisions.

It also provides insights about unmeasured organizational and cultural factors that contributes to the organizations productivity. In addition, the information explains the underlying changes in the organization and broadens the traditional quantitative approach to understand why and how productivity can be improved.

Article 2: Information technology, organizational change and firm productivity: A panel study of complementarity effects and clustering patterns (Fardad Zand, ND)

Summary

This article exhibits that IT improves productivity as large as eight times that of ordinary capital. Firms in the services sector of the economy enjoy higher marginal products of IT than their manufacturing counterparts.

Secondly it contributes to labour productivity improvement. IT also incorporates structural change. The study reveals the effect of IT in form of gaining sustainability. It tells us about the dual role of IT. IT helps in creating applications that are more productive in different industrial context. Seemingly, technology driven process changes do not lead to significant effects unless the also create fundamental changes in both internal as well as external structural elements of a firm.

Article 3: White-Collar productivity and the effect of information technology: Can it be measured? (Dr. Lance Revenaugh, 1996)

Summary:

The article tells about the infusion of IT in an organization generates changes in the kind of work being performed and leads management to want to be able to gauge the before and after impact of IT infusion.

As a result of IT and other changes in restructured organizations, supervisory office staffs are playing increasing roles via enhanced work definitions. The article provides a framework for statistically measure the impact evaluation.

Article 4: The impact of information technology on quality improvement, productivity and profits: An analytical model of a monopolist (Matt E. Thatcher, 2001)

Summary

This article tells that firms usually make investments in IT to gain cost reduction and quality improvement.

Cost reduction: Mainly in food, chemicals, transportation equipment and traditional production are primarily devoted to cost reduction. Data processing functions are primarily contributing to cost reduction. As a result technologies are often associated with a fall in the equilibrium price for a product or service.

Quality improvement: In this model a single product monopolist may undertake. Investment in each technology improves product quality and firm’s productivity varies on type of technology implemented. Mainly in profit maximization firms IT inclusion leads to product quality improvements to capture higher profits, but sometimes at the expense of firm productivity.

Article 5: Information technology and labour productivity growth: an empirical analysis for Canada and United States (Surendra Gera, 1999)

Summary

The article is focus upon the relationship between labour productivity and IT. IT investments are an important source of labour productivity growth across Canadian industries.

IT investment is much more important at the margin than non IT investment in determining labour productivity growth. Mainly because of increased diffusion and use of IT, communications and information processing cost have gone down drastically. It provides and insight about the empirical model that is been used to measure labour productivity. The labour productivity growth and R&D spillovers are also clearly described in the article.

Article 6: The Effects of Development in Information Technologies on the Productivity of Business Enterprises (Kadir YILDIRIM, 2007)

Summary

Information and information technologies are the main items of the new economic order and in that order, firms have to increase their productivities for standing in the competitive sector. IT incorporates radical redesigning of the organizational structure to gain competitiveness.

It provides the insights about the importance of IT while reconstruction of organizations. IT incorporates importance of information technology based innovation and innovations are highly important to gain competitiveness. Moreover, it increases productivity.

In this globalization economy, for the firms to exist and continue profiting, there has to be continuous growth in the competitiveness. As a result of that firms do invest in IT. But at the same time highly educated and experienced manpower and efficient administration should be applied.

Article 7: Information technology and productivity: It ain’t what you do It’s the way that you do I.T. (John Van Reenen, 2005)

Summary

The article tells us about the rapid growth of major economic development over last decade. It is stated that the sectors that used IT experienced productivity acceleration. Moreover the bulk of the evidence from firm level, micro-economic studies is that IT does have an economically and statistically significant impact on productivity but varies dramatically between firms.

US firms are better placed to take advantage of ICT. It is likely that European firms will have to adopt more US style business processes to obtain the same level of productivity advances. Basically this is a matter of time but the question is how long will it take?

Article 8: (Gargallo, The impact of ICT on Productivity: The moderating role of worker quality and quality strategy, 2012)

Summary:

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The main learning from this article is about gaining a better comprehension on how information and communication technologies affect firm productivity, and of the other complementary factors.

The main contribution lies in the possibility of offering evidence supporting the existence of a statistically significant relationship, not only between ICT and productivity, but also between the multiplicative variables that represent ICT and other complementary factors.

The differences in the use and impact of ICT across firms are probably due to the lack of complementary resources or the lack of fit between key organizational aspects. Factors related to the social, technological or legal environment may also play an important role in ensuring that the potential gains in productivity from the successful use of ICT are among the primary policy targets.

3.1 Title of the study

The objective of my study is to understand the effectiveness of Information Technology on organization’s productivity, groceries retail in Bangalore.

3.2 Research Problem

After implementation of Information technology in an organization the following factors are evaluated

Effectiveness of the software

Effectiveness of the employees

Effectiveness of the management

3.3 Objectives of the study

Following are the objectives to carry out my study-

To understand the impact IT on organization’s productivity

To understand the relation between the factors that contribute to the efficiency of each and every research problem

3.4 OPERATIONAL DEFINITION OF THE VARIABLES UNDER INVESTIGATION

Management information systems

"A management information system (MIS) provides information that is needed to manage organizations efficiently and effectively. Management information systems are not only computer systems - these systems encompass three primary components: technology, people (individuals, groups, or organizations), and data/information for decision making."

Management information systems are distinct from other information systems in that they are designed to be used to analyze and facilitate strategic and operational activities in the organization. Academically, the term is commonly used to refer to the study of how individuals, groups, and organizations evaluate, design, implement, manage, and utilize systems to generate information to improve efficiency and effectiveness of decision making, including systems termed decision support systems, expert systems, and executive information systems. Most business schools (or colleges of business administration within universities) have an MIS department, alongside departments of accounting, finance, management, marketing, and sometimes others, and grant degrees (at undergrad, masters, and PhD levels) in MIS.

The management information system gives the most significant information that is essential for decision making to take place. Early computers had only one track direction and simple operations such as sales, billing, tracking inventory etc. As time has passed computer applications has become very complex and technologies are being constantly refined and improved. A major concern has been to grow hardware storage capacities and technologies has been improving. Previously isolated applications are also given their due consideration with teh aid of management information systems.

Management information systems come into play for long range business plans. Reports based upon performance analysis is utmost significant for the business plans to be executed. Management information systems also aid in providing various feedback loops that help in providing sense of direction to an organizations business plans. Real time performance of cost centres, detailed accounts and management of the projects becomes much easier by having management information systems in place.

Following benefits can be attained by using information systems-

Strengths and weaknesses of a company are highlighted by having revenue reports, date of company’s performance, records of employees performance etc in place.

Identification of various aspects that can help improve an organizations business processes and operations

It is a key communication and planning tool which gives a 360 degree picture of the organization.

Clarity about marketing and promotion activities required as effective and efficient management of customer data can be made possible

Aligning of business processes with the needs of the customers

Consumers buying behavior, purchasing trends and patterns can be understood by MIS.

Sustainability

Sustainability in simple jargon can be defined as the capacity of one to maintain, endure, undertake and support anything. "Sustainability has various dimensions and is not limited to a product, human or organization. Everything and anything that supports, ensures is sustainable.

An organization should have a going concern attitude i.e. people may come and go but the organization continues to stay. Such an ideology can only be practiced when an organization is sustainable and does not perish to its challenges. Sustaining an organization is very daunting as it takes time, planning and cultivation. Systems need to be instutionalized and a long term approach has to be brought in even to manage trivial day to day operations. Every task of the company has to be interlinked and symbolic in order to attain sustainable advantage over time.

In order to attain sustainability, there are seven factors that are necessary for ant organization to possess." They can be explained as follows-

Organizational identity- The vision and mission of a company make its organizational identity and justify the reason for it to sustain. Branding and strong leadership can be attributed to organizational identity. The core reason for a company to exist, grow and sustain are defined here.

Long range strategic planning- Perpetual existence of a company can only be made probably by planning with a long term vision. The goals and objectives of an organization should be flexible and adaptive in order to endure the challenges that will come. Benchmarking with companies that have sustained ups and downs and still stand strong is ideal for long range strategic planning.

Financial and other system administration- Money is the life blood of any organization. Its workings require finances and the end goal of every business is to earn enough profits to sustain itself. Cash flow analysis, budgets give clear view of where the company stands and what should be done to sustain the organization and make it grow.

Long range fund raising plan- Cost leadership, focus and differentiation which leads to sustainable competitive advantage require long range fund raising plans. Capital goods can be created only by having future financials in place. Needs and resources have to be created and cultured with a view to sustain and no perish.

Annual operational plan- Management of an organization is what leads to sustaining it eternally. In today’s dynamic settings objectives, activities and timeline lead to operational efficiency. Dedicated resources, staffing with competent employees and having the best practices in place are a necessity for organization sustainability.

Board Development plan- Authority and power are essential to ensure an organization endures complexities and adapts to changes. So organization sustainability requires evaluation of needs and assessment of requisites and working towards fulfilling them.

Organization culture and staff development- The culture of an organization is the crux of sustaining any organization as people may come n go but the culture remains and defines the withstanding of a company.

Competitiveness

The ability and performance of any organization implies its competitiveness. "For eg- the ability of a firm to supply goods and services in a particular market in relation to other firms in the same market defines its competitiveness. Competitiveness throws light on the attractiveness towards something. An investor would find it attractive to invest in something based on its competency and competitive viability. Competition occurs in all walks of life and with different magnitudes and intensities."

The trend emerging at the moment is global competitiveness. With globalization setting it firms and organizations have been thrown on a competitive platform that is global in nature and this has lead to increasing in efficiency and bringing in the best practices. Inclination to compete is also increasing in companies. Price wars, blue ocean strategy, cutting edge innovation, interactive marketing campaigns are few strategies that organizations are opting for to get competitive advantage.

Rare resources, operational efficiency, trademarks are few ways by which companies reinforce their competitive edge as market leaders or challengers.

Porter’s five forces is used extensively to understand competitive environment around an organization. Industry analysis and business strategy development can be done by usage of porters five forces model. Attractiveness and competitiveness of any particular industry can be analyzed with the aid of porters five forces.

It sheds light on five key aspects that make or break magnitude of competition. They are – Bargaining power of suppliers, bargaining power of customers, threat of new entrants, threat of substitutes and existing competitive rivalry within an industry. Recently, a new force termed as threats of complementary goods has also been identified.

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3.4.1 FIG: POTER’S FIVE FORCES MODEL

Productivity of processes and employees

Productivity can be defined as measure of efficiency of production. It is measured as ratio of production output to the requisite that needs to be produced i.e. the input.

Production processes lead to economic well-being and aim directly for satisfaction of human needs, wants and desires. The earliest reasons for man becoming productive are to be able to fulfill his requisites.

Commodities, goods, services, systems, processes are all produced to satisfy some need. Production functions need to interact with each other in order to lead to satisfaction.

Productivity of processes and employees will lead to sustaining a firm and also define its competitiveness.

Productivity of an organization lies in enhancing its processes and empowering its workers. Processes should be streamlined and automated and also valueless processes should be eliminated and lead times and manpower efficiency should be made shorter.

Productivity of employees can be stimulated by delegating work, developing ideas of improvement, supervision and brainstorming as well as other tactics.

3.5 VARIABLES OF STUDY

Dependent variables

Productivity of employees

Productivity of management

Productivity of software

Independent variables

Gender

Age

Occupation

3.6 Hypotheses

Problem 1: Effectiveness of the software

H0: The role of software is not significant in improving the overall effectiveness

H1: The role of software is significant in improving the overall effectiveness

Problem 2: Effectiveness of employees

H0: The role of IT is not significant in effectiveness of employees in retail sector

H1: The role of IT is significant in effectiveness of employees in retail sector

Problem 3: Effectiveness of the management

H0: IT does not play significant role in effectiveness of the management

H1: IT plays significant role in effectiveness of the management

3.7 Data Collection Method

The data is been collected based upon the survey conducted through the questionnaire for both shop floor employees and the shop floor managers. Some of the questions are being used to identify the operational features and the efficiency of the software.

3.8 sample

10 retail stores located in Bangalore are being used as a sample. In which 3 shop floor employees per retail store is been surveyed and 1 shop floor manager is been surveyed to get the data.

The sample is justifying the population because majority of the multi brand retail companies are been covered and those 10 companies almost represent the entire groceries retail industry of India.

3.9 STASTICAL TOOLS

Correlation

In statistics, dependence refers to any statistical relationship between two random variables or two sets of data. Correlation refers to any of a broad class of statistical relationships involving

dependence.

Familiar examples of dependent phenomena include the correlation between the physical statures of parents and their offspring, "and the correlation between the demand for a product and its price. Correlations are useful because they can indicate a predictive relationship that can be exploited in practice. For example, an electrical utility may produce less power on a mild day based on the correlation between electricity demand and weather. In this example there is a causal relationship, because extreme weather causes people to use more electricity for heating or cooling; however, statistical dependence is not sufficient to demonstrate the presence of such a causal relationship."

Formally, "dependence refers to any situation in which random variables do not satisfy a mathematical condition of probabilistic independence. In loose usage, correlation can refer to any departure of two or more random variables from independence, but technically it refers to any of several more specialized types of relationship between mean values. There are several correlation coefficients, often denoted ρ or r, measuring the degree of correlation. The most common of these is the Pearson correlation coefficient, which is sensitive only to a linear relationship between two variables (which may exist even if one is a nonlinear function of the other). Other correlation coefficients have been developed to be more robust than the Pearson correlation – that is, more sensitive to nonlinear relationships."

t-Test: Two-Sample Assuming Unequal Variances

Assumption:

1. The samples (n1 and n2) from two normal populations are independent

2. One or both sample sizes are less than 30

3. The appropriate sampling distribution of the test statistic is the t distribution

4. The unknown variances of the two populations are not equal

http://projectile.sv.cmu.edu/research/public/talks/ttest/t-test8.gif

Note in this case the Degree of Freedom is measured by 

http://projectile.sv.cmu.edu/research/public/talks/ttest/Class27.gif

4.1 INDIAN GROCERIES RETAIL INDUSTRY

Food and grocery segment constitutes about 62 per cent of the total INR 12000 billion (USD 270 billion) Indian retail market. There are about 12 million retailers in India and 80 per cent of those are actually mom and pop shops run by family members. The modern organized retailing is about 3 per cent of the total. In South, however, the modern retailing is said to be 10% of the total. As per IMAGES F&R Research estimates organized food and grocery retail market was a mere 0.5 per cent of the total in 2004. This organized segment has now grown to just about 0.8 per cent in 2006 valued at INR 500 billion at 2004-05 prices. The organized food and grocery retail sector grew at the rate of 35.6 percent in 2005 and at 42.5 per cent in 2006 over the previous year.

Until recently, "this segment was dominated by players with regional presence as most of them had established themselves in local markets only such as Subhiksha in Chennai, Trinethra in Andhra Pradesh and Margin Free Markets in Kerala. Food World tried to expand to West India (Pune) but failed. This was primarily attributed to inefficient supply chain management and lack of investment in establishing effective SCM network in different regions. But players like Food Bazaar has established a pan-India presence and Subhiksha has moved towards north India and currently testing the NCR market."

It can be noted that grocery retailing accounts for nearly half of the packaged fast moving consumer goods (FMCG) sales. ACNielsen study indicates that there will be significant switch in spending from traditional grocery stores to modern stores in the region. (Source: India Retail Report 2007: An Images F&R Research)

Key Drivers to F&G Retail growth

Changing consumer preferences due to increased disposable income. Consumers are demanding wider range and unique merchandise with consistent quality –‘all under one roof’

Gradual increasing cosmopolitization of Indian population due to western influence and internationalization of palates and lifestyle created the need of wider array of products and services

New types of packaged and convenience foods such as processed meat and meat products requiring refrigerated storage and transportation and retail shelf space

As of now the emphasis in food and grocery retailing is on dry groceries. "The wet groceries like fruits, vegetables and meat products account for only 3-5 per cent of the over all offering of the organized players. However, consumer spending indicate that about 40% of total consumer spending is on wet groceries. The major challenge would thus be putting appropriate supply chain management infrastructure for wet products and those who will be able to do it faster will have a major differentiation advantage to leverage. The signs of eliminating involvement of middlemen and backward integration in SCM among Indian retailers are increasingly visible.

Major players in the fray are Big Bazaar ( belonging to Pantaloon), Giant (rechristened as Spencer’s), Star India Bazaar (of Tata Group), Landmark (in association with South African Retail giant Shoprite), Reliance Industries, Rainbow Retail (of Raheja Group), Godrej, Adani, Trinethra (now under AV Birla Group), Dairy Farm, Jubilant Group among others."

Factors that will determine the success of F&G stores

n  Ability of the companies to achieve economies of scale and supply chain integration leading to cost reduction , improved stock turnover and better credit terms from vendor

n  Building scaleable model that is replicable across regions and extending models to smaller cities and towns

n  Passing on benefits of lower costs to consumers offering better value proposition than what neighbourhood stores offer.

n  Home delivery to match the customer convenience offered by the unorganized segment

n  Better shopping environment benchmarked to international standard

n  Focus on private label particularly for staple foods

n  Extend into other categories for private label brands

Challenges to be overcome

Efficiency related issues in supply chain management areas for significant cost reduction

Food and grocery is still a localized affair. People are unwilling to travel far off distances for grocery shopping when options are available nearby. Finding solution to this issue is thus a big challenge

An analysis of grocery retailers performance has shown that in year 2006 there was a growth of 73 percent in number of cities covered as against only 18 percent in 2005.Although number of outlets doubled in 2005 and there was 65 percent growth in 2006.

Spinach from Mumbai currently has 60 stores in three western cities. "They plan to make it big with 1500 stores in 100 cities by year 2010. Spar, an international FMCG retailer also made its foray into the Mumbai market in November 2004. The retailer who has signed a license agreement for the Mumbai region with Radhakrishna Foodland Pvt. Ltd presently has one store in Mumbai with total retail space of 27000 sqft. Bangalore based Jubilant Group’s Monday to Sunday has two stores in the city across a total retail area of 12500 sft. The Kolkata based C3 supermarket chain has six stores now and Tai chain has four stores with a single city presence. Hyderabad’s Heritage Foods have also launched their Fresh supermarket store in the city in December 2006.Owned by Chandrbabu Naidu, former chief minister of Andhra Pradesh, Fresh F&G chain plans to make it to 80 outlets by 2008."

Leading F&G Retail stores

SUBHIKSHA

Chennai based retail chain is the largest discount stores in India with over 315 stores. "Started in 1997 it is the first company to start tie ups with the manufacturers for cost saving. In 2006 it has 315 stores with 60 stores in Bangalore, Mysore and one store in NCR. The turnover of the company is INR 3.34 billion. They have launched aggressive television campaign to reach masses. They plan to invest additional INR 1000 million to add 180 more stores in eight cities of which 100 stores will be in Mumbai city itself. As per plan they would like to have 600 stores by the year end 2007."

FABMALL

Bangalore based Fabmall operated 12 stores and achieved INR 500 million in sales in 2003-04. "It has been acquired by Trinethra of Hyderabad with 80 outlets in eight cities in Andhra Pradesh covering retail space of more than 1300000 sqft. Post acquisition, Trinethra had added five more stores under Fabmall and now operating both the formats. Trinethra super retail with 172 stores subsequently got acquired by AV Birla Group which acquired 90 percent stake. Balance 10% is still with India Value Fund managed by GW capital, a private equity fund .By year 2006-07 Trinethra has 198 stores in more than four cities with total area of 525566 sqft and sales INR 2780 million."

FOODWORLD

Dairy Farm International entered Indian market and took over Food World from Spencer as a route to dilute the shareholding in RPG group. It had a four city presence and 100 stores in 2005-06 as compared to the previous year 79 outlets. Dairy Farm now plans to set up bigger stores as well as large format stores .As per plan they would like to set up 500 outlets by year 2010.

SPENCER’S RETAIL

A RPG group company entered into F&G retail in 2001.In the year 2006-07 they had 68 stores in 17 cities with retail space of 582490 sqft. They have both small (2000sqft) as well as large( 8000-15000 sqft) format outlets selling both fresh products and durable item under one roof. Small format outlets sell fresh food, groceries, chilled and frozen foods.

FOOD BAZAR

Food Bazaar, the Pantaloon group’s F&G chain , "has in all 45 outlets across more than 20 cities and is located within the group’s value retail format Big Bazaar. Food Bazaar’s value proposition – selling below MRP – helped in high stock turn over. It has launched private label brands of tea, salt, sugar, spice and processed foods. The turnover for the year 2003-04 was INR 1.5 billion which is expected to go up to INR 32.5 billion by year 2010.The company plans to have 110 outlets in 2007 and 250 outlets in 2010. They have over 10000 SKUs."

TRUMART

Launched by Piramal group and managed by Mumbai based Crossroads. "First outlet was opened in Pune in upscale Bhandarkar Road of 6000 sqft size. They have 12 oulets in five cities in 2005-06 although started initially in Pune and Mumbai. Now they have 42 outlets ( 2006-07) in 14 cities with plan to have 150 outlets in the year 2010.They plan to have 82 outlets in 2007.The theme of their stores is AUOR (All under one roof)."

NILGIRI’S

It has pioneered the organized retail operation in the country –started as early as 1905 in Bangalore. In 2004-05 it has about 140000 sqft retail space which has now gone up to 200000 sqft. They have mainly franchisees and a few company owned format outlets. They have pioneered franchisee model in India in F&G retail.

ARAMBAG FOODMART

It belongs to the Arambag Hatcheries and is a household name in Kolkata. "Spread over Kolkata and other cities in West Bengal company operates 24 stores with an average area of 600-1000 sqft of retail space. It deals in groceries, confectioneries, toiletries, frozen foods and of course its products Arambag Chicken (dressed chicken). The unique features of these stores is below MRP price, good quality and convenient location.There has been gradual increase in sales from INR 181 million in 2004-05 to INR 212 million in 2005-06 to the current to INR 260 million now."

NAMDHARI’S FRESH

Namdgari’s Fresh (NF) a sister concern of Namdhari Seeds Pvt. Ltd, a leading Seed company was started four years back with a vision to be the leader in Quality Fresh Produce following Integrated Pest Management Practices with eco friendly bio- agents. Currently they have 13 outlets in Bangalore and 3 more in New Delhi

RELIANCE FRESH

Reliance entered the F&G sector recently with its Reliance Fresh outlets foraying through the Hyderabad stores. "First set of roll out included 11 stores all located in the same city. First day turnover was INR 2.2 million. The company is targeting at least 35 outlets in major cities. Expansion is planned and is in progress to cover immediately Delhi, Mumbai and nearby areas in the first phase. They are planning 70 cities and 784 urban towns and 6000 odd rural mandi towns to cover 100 million sqft of retail space backed by about 68 strong distribution network by year 2011.The company expects to get sales approximately of INR 1000 billion."

4.2 PURPOSE OF THE STUDY

The retail industry is witnessing a change in the new formats and consumers who look out for unique differentiations as well as conveniences. The study would help the retailers to look at new dimensions to implementing information technology infrastructure so as to tackle the changing customer dynamics.

4.3 SIGNIFICANCE OF THE STUDY

This study will mainly focus on the effectiveness of the implementation of information technology and the effects on the overall productivity.

4.4 LIMITATION OF THE STUDY

The study has only 40 respondents which is small in scope.

The studied focuses only on groceries sector in retail.

5.1 INTRODUCTION

This chapter is a detailed analysis and corresponding interpretation of the collected data. This analysis and interpretation is against the research methodology mentioned in chapter 3 and the micro analysis of the Indian groceries industry in chapter 4. The chapter begins with analyzing the respondent’s profile and then moves on to the analysis of the primary data collected through the survey.

5.2 RESPONDENT PROFILE

The respondent profile represents the employees, who are using the software for different operations like billing, managing customer data, customer relationship management, requirement planning etc. Shop floor managers are surveyed to determine the efficacies of the software while taking strategic decisions, managing employees, monitoring employees and managing the availability of the products in the shop floor.

5.3 ANALYSIS OF THE DATA

Analysis of the data is been done through the following phases

Phase 1:

As any research requires data for the analysis, the data considered in this project falls under two categories which are:

Primary Data: - The data will be collected using questionnaire.

Secondary Data: - These data are generally the data which support the primary data and hold an important position in the analysis of the research. The secondary data includes information from the internet.

Obtaining the data about the company, what are the uses of the software, and the uses in terms of employees as well as the management.

Obtaining data on the factors related to the efficiency of the software.

Phase 2:

Formulate the hypothesis to check the assumptions formulated at the beginning of the study.

Phase 3:

Analyzing the data using t-test and correlation and validating the hypothesis stated.

First of all I would like to analyze what are the major uses of the software. From the responses gathered the following data is obtained

5.3.1 TABLE: FREQUENCY OF USAGE OF THE SOFTWARE

Billing

46.66667

Manage data

20

Resource planning

13.33333

Customer relationship management

20

5.3.1 FIG: USAGE OF THE SOFTWARE

Some of the drivers identified from the survey are

5.3.2 Table: Drivers of using the software

Network security solutions

20

Data storage solutions

30

Enterprise software applications

16.66667

Business productivity software

33.33333

5.3.2 FIG: DRIVERS PERCENTAGE

From management perspective the usage of the software is as follows

5.3.2 Table Usage of the software

Resource planning

26.66667

E-commerce

6.666667

Supply chain management

6.666667

Human resource management

6.666667

Customer relationship management

16.66667

Inventory management

16.66667

Finance/ Accounting

20

5.3.3 FIG: USAGE OF THE SOFTWARE

The reasons for using the software is as follows

5.3.4 Table: Reasons for using the software

Demand of stakeholders

10

Better and faster customer support & services

33.33333

To stay ahead of competition

23.33333

Following the strategy set by top management

13.33333

Advice from consultants

13.33333

Demand of suppliers

6.666667

5.3.4 Fig: Reasons for using the software

The long term benefits of using the software is as follows

5.3.5 Table: Long term benefits

Highly efficient process

30

Increase employee as well as customer satisfaction

16.66667

Growth of sales revenue

13.33333

Increase market share

10

Cost cutting

30

5.3.5 FIG: LONG TERM BENEFITS

From the point of view of the advantages of the software the following data is been obtained.

5.3.6 TABLE: ADVANTAGES OF THE SOFTWARE

Better control

23.33333

Faster operations

36.66667

Cost reduction

30

Process activities integration

10

5.3.6 FIG: ADVANTAGES OF USING THE SOFTWARE

5.3.1 HYPOTHESIS TESTING

Problem 1: Effectiveness of the software

H0: The role of software is not significant in improving the overall effectiveness

H1: The role of software is significant in improving the overall effectiveness

Accept H0 if mean<3.7

Reject H0 if mean>=3.7

Following question(s) are directed towards this hypothesis along with the average response:

5.3.7 Table: Questionnaire response for software efficiency

Mean

Is it user friendly?

4.5

The software makes my job easy

4.3

There are so many benefits of using the software

4.16

The software has helped in creating good relationship with the management

3.26

5.3.8 table: t test for software efficiency

t-Test: Two-Sample Assuming Unequal Variances

 

Variable 1

Variable 2

Mean

4.058333

3.7

Variance

0.214152

3.26E-30

Observations

30

30

Hypothesized Mean Difference

0

Df

29

t Stat

4.241178

P(T<=t) one-tail

0.000104

t Critical one-tail

1.699127

P(T<=t) two-tail

0.000207

t Critical two-tail

2.04523

 

Alpha

.05

Df

29

p-value

.000104

The correlation between the factors of software efficiency is as follows

5.3.9 Table: Correlation between the factors of software efficiency

User friendly/ software efficiency

0.602129029

Job easy/ software efficiency

0.692936869

Benefits/ software efficiency

0.644539956

Building relationship/ software efficiency

0.692992863

The pearson’s correlation rule states that

If r = +.70 or higher Very strong positive relationship

+.40 to +.69 Strong positive relationship

+.30 to +.39 Moderate positive relationship

+.20 to +.29 weak positive relationship

+.01 to +.19 No or negligible relationship

-.01 to -.19 No or negligible relationship

-.20 to -.29 weak negative relationship

-.30 to -.39 Moderate negative relationship

-.40 to -.69 Strong negative relationship

-.70 or higher Very strong negative relationship

Problem 2: Effectiveness of employees

H0: The role of IT is not significant in effectiveness of employees in retail sector

H1: The role of IT is significant in effectiveness of employees in retail sector

Accept H0 if mean<3.7

Reject H0 if mean>=3.7

Following question(s) are directed towards this hypothesis along with the average response:

5.3.10 table: response of increase in effeciency

Mean

Do you feel it has increased your efficiency?

4.03

5.3.11 table: t test for employee efficiency

t-Test: Two-Sample Assuming Unequal Variances

 

Variable 1

Variable 2

Mean

4.033333

3.7

Variance

0.86092

3.26E-30

Observations

30

30

Hypothesized Mean Difference

0

df

29

t Stat

1.967696

P(T<=t) one-tail

0.029366

t Critical one-tail

1.699127

P(T<=t) two-tail

0.058732

t Critical two-tail

2.04523

 

Alpha

.05

Df

29

p-value

.029366

Problem 3: Effectiveness of the management

H0: IT does not play significant role in effectiveness of the management

H1: IT plays significant role in effectiveness of the management

Accept H0 if mean<3.7

Reject H0 if mean>=3.7

Following question(s) are directed towards this hypothesis along with the average response:

5.3.12 table: employee response about efficiency of management

Mean

Do you feel your superiors monitors your work?

4.13

5.3.13 table: t test for efficiency of management (employee reply)

t-Test: Two-Sample Assuming Unequal Variances

 

Variable 1

Variable 2

Mean

4.133333333

3.7

Variance

0.533333333

3.26425E-30

Observations

30

30

Hypothesized Mean Difference

0

Df

29

t Stat

3.25

P(T<=t) one-tail

0.001459779

t Critical one-tail

1.699127027

P(T<=t) two-tail

0.002919558

t Critical two-tail

2.045229642

 

Alpha

.05

Df

29

p-value

.001459779

5.3.14 table: management response for management efficiency

mean

Does it improve employee satisfaction?

3.8

Do you feel the software has improved employee efficiency?

4.4

Does it help to monitor the employees?

4.4

Does it help employee performance?

4

The software helps in strategic strategic decisions

4.1

5.3.15 table: t test for efficiency of management (management reply)

t-Test: Two-Sample Assuming Unequal Variances

 

Variable 1

Variable 2

Mean

4.14

3.7

Variance

0.178222222

0

Observations

10

10

Hypothesized Mean Difference

0

df

9

t Stat

3.295882718

P(T<=t) one-tail

0.004645363

t Critical one-tail

1.833112933

P(T<=t) two-tail

0.009290727

t Critical two-tail

2.262157163

 

Alpha

.05

Df

9

p-value

.004645363

5.3.16 table: Correlation between the factors of management efficiency

Employee satisfaction/ management effeciency

0.449438552

Employee effecience/ management effeciency

0.93779955

Monitor employee/ management productivity

0.93779955

Employee performance/ management productivity

0.710624747

Strategic decisions/ management productivity

0.676942335

6.1 FINDINGS