India Logistics spend on IT just 0.26 PC: Kale

India Logistics spend on IT just 0.26 PC: Kale

Only 0.26 per cent is spent on IT by the Logistics ecosystem as against the global 2-3 pc, only less than 10 pc of work is outsourced by the shippers and less than one per cent of the industry is organized, say some findings

Wednesday, December 16, 2009

MUMBAI: Kale’s ‘Technology Survey for the Indian Logistics Industry’ has pointed out that only 0.26 per cent is spent on IT by the Logistics ecosystem as against the global standard of two to three per cent. This low level of spend on IT is among several reasons for the high cost of running the Logistics business in India. The TAIL index focuses on the reasons behind the low spend (and the low level of IT adoption). The TAIL index goes a step beyond in relating the level of adoption to the business benefits that have been experienced by the Logistics industry. The TAIL index can be used as a benchmark by the Logistics service provider in ascertaining the quantum of IT spends and the benefit from the investment.

Kale Consultants Ltd has announced the launch of the detailed report on “Technology Adoption Index for the Logistics industry” (TAIL). The report, which includes a detailed study covering over 235 companies, is an attempt to arrive at a simple integrated measure of technology adoption in the Indian logistics industry. The index can now serve as an industry benchmark for logistics companies to derive their technology effectiveness and business competitiveness.

The inaugural TAIL study offers a snapshot view of the state of technology adoption in the Indian logistics industry. TAIL captures information on how much technology do firms use, how they use it and how they manage technology in a single comprehensive quantitative measure. TAIL combines the dimensions of IT penetration, sophistication and maturity of adoption into a simple, easy-to-use index that can be used by firms to benchmark their progress.

In the Indian Logistics Industry, only less than 10 per cent of work is outsourced by the shippers and there lies a huge potential for improving productivity and hence the growth. Even more, less than one per cent of the industry is organized and there is lack of industry-wide standards, processes, and established technology solutions that creates an opportunity to establish the benefits of technology.

Commenting on the release of the TAIL report, Vineet Malhotra, Global Head – Marketing, Kale Consultants Ltd. said, “The Technology Adoption Index for Logistics, has emerged as a reliable basis for measurement of the degree of technology adoption in logistics. The strongest evidence of this is its correlation with business metrics. The study highlights that increased technology adoption is a clear driver of growth for logistics companies. Instead of waiting to reach a certain size before IT can become affordable, players who push themselves ahead on technology adoption have a clear chance of success.”

©CIOL Bureau