Indian logistics firms are gradually realising the importance of investing in IT to improve customer service The Indian logistics sector is gradually becoming optimistic about investing in IT. This was reflected in an online survey conducted by Softlink Logistic Systems Pvt Ltd on the country’s logistics sector. The Indian logistics sector is generally believed to be unwilling to invest in IT. Various factors such as unorganised and fragmented nature of the sector and the outlook of players in considering IT as an extra expenditure rather than an investment have been accredited to low IT penetration in the sector.
India’s logistics sector is often blamed for increasing operational costs. IT can play a vital role in cutting down such costs by streamlining various processes of a company. To gauge IT adoption among logistics firms, Softlink carried out an online survey. Several interesting facts came up from the survey, which helped to understand the approach of the logistics sector towards IT adoption.
 Survey findings
Among the most interesting findings of the survey was the fact that amidst global recession,which saw sales plummeting, big players in the sector were very much bullish on investing in IT. Even smaller firms are investing heavily on IT. The survey findings have also reflected that customer interaction, where Indian logistics companies are considered to be falling short, has also achieved significant attention from firms.
The survey reflected that there has been a 6% and 3% drop, respectively, in the number of companies investing less than Rs 10 lakh and between Rs 10-25 lakh in IT. On the other hand, the number of companies investing more than Rs 25 lakh in IT adoption has risen. Several players participating in the survey said that they are still unsure about investing in IT and a significant 30% of the respondents are still undecided on their IT budget for 2010.
Among big players, only 7% of the respondents have spent between Rs 25 lakh and Rs 1 crore in IT adoption in 2009. 36% of the larger players have not yet decided their IT budget for the year 2010.
 Motivating factors for IT investments One of the major objectives of the survey was to find out the motivating factors behind IT investment among logistics firms. The result showed that for small and mid-sized players in the sector enhancing customer service is a major stimulus for adoption of IT. Around 91% of the small and mid-sized respondents feel that improving customer service is a major factor behind IT adoption. Operational efficiency (73%) and direct customer request (84%) are other major factors behind IT adoption.
Importance of customer interaction
The survey also found out the importance of customer interaction, which if overlooked can have serious repercussions on the growth of the company. Although a majority of respondents take it as an important aspect of business, several respondents agreed that their present system is not well-equipped to provide robust customer service.
 The survey showed that around 97% of small and mid-sized logistics firms are viewing customer service seriously, whereas 39% felt their existing IT system is not fabricated to enhance customer service. On the other hand, around 96% of big players echoed that customer service is an important aspect for their business, whereas 34% said that their existing IT facility does not match up to their customer service requirement.
Excerpts from a survey conducted by Softlink Logistic Systems Pvt Limited |
