Just 1 pc IT spend in Logistics: Kale's study

MUMBAI, INDIA: Kale Consultants Ltd., a technology solution provider to the airline, logistics and travel industry, has announced the completion of a study on “Technology Adoption in the Indian Logistics Industry”. 

About 215 logistics companies, covering the gamut of 3PL service providers, freight forwarders, Customs broking agents, were interviewed for this study. The study also covers large multinationals and local players.

Some of the key highlights from the study are as follows. Only 24 per cent of companies were found to be above the average in terms of technology adoption. And 48 per cent of companies consider IT to be critical for their operations. But 86 per cent of companies spend less than one per cent of their revenues on technology.

Releasing the top line results of the study, Sumeet Nadkar, Head – Logistics SBU at Kale said- “This seminal study has thrown up several interesting insights that would indicate that technology adoption could well be a leading indicator of business performance. With the average IT adoption score around 43, a major portion of the industry needs to improve technology adoption and usage. This is even more striking since close to 50 per cent of companies have identified technology as a critical component for their growth and sustenance. While the study shows that penetration of IT seems widespread, most firms suffer from inadequate sophistication of use and relative lack of maturity in technology management.  The relevance of the study lies in the productivity improvements that can result from appropriate use of technology.”

This study covers the entire gamut of Logistics service providers and comes at a time when this industry is at a crucial inflection point. The study reveals that adoption of best practices enabled by technology can contribute to significant gains both for the logistics industry and for the Indian industry at large.  This will see reductions in transaction costs benefiting trade and the economy at large.

This exhaustive study has combined extensive field depth interviews, industry expert opinions and online survey results with rigorous statistical validation to arrive at a robust index of IT adoption- TAIL.  Kale Consultants would shortly publish the detailed report on this study that would be available to the logistics industry at large.  All participants in the study would have access to their own index ratings and Kale is willing to carry out studies at any other logistics organization on request.