Adoption of Technology in

Indian Logistics Sector - 2009

A survey conducted by:

 Scope of the discussion

• Background of the survey

• Overall observations on Indian Logistic segment
• Key observations on Indian SMBs
• Key observations on Indian Large Players
Background of the survey
 Background of the survey

• Softlink Logistic Systems conducted a survey – ‘Adoption

of Technology in Indian Logistic Sector-2009’ to gauge
the penetration of technology at various levels in
logistics business

• The survey was conducted amongst players operating in

Customs Clearing, Freight Forwarding, NVOCCs and 3PLs

• The sample size of the survey consisted of nearly 700

respondents

• The survey report has been fragmented in overall

industry findings, SMBs findings and Large players
findings
Industry Demographics of the respondents

Industry Demographics

3.16
10.76

Freight Forwarders
Customs Clearing
3PLs
54.23
31.85 NVOCCs
Key observations on overall Indian
Logistics segment
 Parameters considered for overall Indian Logistics Sector

• A consolidated sample size of SMBs and larger logistic players

are considered in the overall observation on Indian Logistics
sector

• The demographic of Indian Logistics consist of Large Players

(3PLs & NVOCCs) accounting to 13.92 and Small Players
(Freight Forwarding & Customs Clearing) accounting to 86.08
percent of the overall sample size
 Logistics players are opening up to invest for technology upgradation

How much did you spend on technology in How much do you plan to spend in the year
2009 2010

24.39 Less than Rs. 10 lakh Less than Rs. 10 lakh

30.27
Rs. 10-25 Lakh Rs. 10-25 Lakh
Rs. 25-50 Lakh 49.07 Rs. 25-50 Lakh
2.15
Rs. 50 Lakh-1 Crore Rs. 50 Lakh-1 Crore
54.66
2.3 4.16
Greater than Rs. 1 Crore Greater than Rs. 1 Crore
2.58
Don't Know Don't Know
12.34 3.01 6.46
8.61

• It is observed that Indian Logistics players are opening up to invest in

technology. The estimated technology investment of Rs. Less than 10
Lakhs in 2010 has seen a drop by 6 percent compared to 2009. Similar
trend is witnessed for Rs. 10-25 lakhs (drop by 3 percent)
• At the same time, investments over Rs. 25 lakhs have seen a surge
• 30 percent of the overall respondents are yet to decide on the IT
budgets for the year 2010
Indian Logistics segment ask for further improvement in available technology for
Commercial Documentation
Commercial Documentation as a business My IT system is meeting the need of Commercial
priority Documentation

1.72

11.19
13.49

Very Important
15.06
Somewhat Important Yes No NA

Slightly or not
Important
73.74
84.79

• Research reveals that 98 percent of the respondents feel that

Commercial Documentations are important aspects in their
businesses. At the same time, 26 percent respondents
highlighted that their existing IT system is not matching up the
requirement of Commercial Documentations
 Indian Logistics segment ask for technology advancement to meet
Regulatory Compliance

Statutory Government Documentation as a My IT system is meeting the need of Statutory

business priority Government Documentation

3.01

11.62
13.20
Very Important
Yes
Somewhat Important 20.95
No
N/A
Slightly or not
Important 67.43
83.79

• Research reveals that 97 percent of the respondents feel that

Regulatory Compliance is an important aspect in their
businesses. At the same time, 33 percent respondents
highlighted that their existing IT system is not matching up the
requirement of Regulatory Compliance
Existing technology for Financial Accounting is not meeting the requirements to
the fullest amongst Indian Logistics segment
Financial Accounting software in use at Financial accounting as a business priority
organisation
1.87
4.73
3.01
5.88

Very Important
Ready software
21.66 Somewhat Important
Customised solution
Do not use software
Slightly or not
69.44 N/A Important
93.40

My IT system is meeting the need of Financial

Accounting

7.32

12.05
Yes
No
N/A

80.63
Existing technology for Financial Accounting is not meeting the requirements to
the fullest amongst Indian Logistics segment

• It is observed that 98 percent of the respondents feel Financial

Accounting as an important work in their businesses, out of
which 91 percent are using technology

• Also out of these 91 percent, 19 percent of the respondents

still feel that their IT system is not matching up the
requirements of Financial accounting
Indian Logistics segment unsatisfied with the existing technology solutions for
Customer Service
Customer Service as a business priority My IT system is meeting the need of Customer
Service
3.44

10.19 Customer interactions - 10.90

Very Important

Customer interactions - Yes

Somewhat Important
26.97 No
NA
Customer interactions - 62.12
Slightly or not
86.37 Important

• Research reveals that 97 percent of the respondents feel that

Customer Service is an important aspect in their businesses. At
the same time, 38 percent respondents highlighted that their
existing IT system is not matching up the requirement of
Customer Service
 Dedicated IT team amongst Indian Logistics players

Do you have a dedicated IT department in your

organization?

4.16

Yes
48.06
No
47.78 Don’t know

• 48 percent respondents of the overall Indian Logistics players

mentioned that they do not have a dedicated IT team in their
organizations
Key Observations on Indian SMBs from
Logistics sector
 Parameters considered for Indian Logistics SMBs respondent

• SMBs considered in the survey are players having turnover

less than Rs. 50 crore

• The demographic of Indian Logistics SMBs consist of Freight

Forwarders & Customs Clearing players, accounting to 86
percent of the overall sample size
Three motivating factors for Indian Logistics SMBs to invest in technology

Customer Service as a motivating factor to Direct Customer Request as a motivating

invest in technology factor to invest in technology

9.33
15.83

Most important Most important

27.56
Somewhat important 18.33 Somewhat important
Third most important Third most important
63.11 65.83

Operational efficiency as a motivating

factor to invest in technology

26.73
34.65
Most important
Somewhat important
Third most important

38.61
Three motivating factors for Indian Logistics SMBs to invest in technology

• Research reveals that 91 percent of the SMB respondents

highlighted that improving Customer Service will remain the
key driving factor to invest in technology. The other two key
driving factors would be Direct Customer Request (84 percent)
and Improving Operational Efficiency (73 percent)
 Indian SMBs are yet to decide on technology investments in 2010

How much did you spend on technology in How much do you plan to spend in the year 2010
2009

Less than Rs. 10 lakh

Rs. 10-25 Lakh Less than Rs. 10 lakh

29.53
24.69 Rs. 10-25 Lakh
Rs. 25-50 Lakh
Rs. 25-50 Lakh
2.04 50.93 Rs. 50 Lakh-1 Crore
Rs. 50 Lakh-1 Crore
2.65 55.51 Greater than Rs. 1 Crore
2.79
3.67
Greater than Rs. 1 Don't Know
11.43 3.02 5.81
Crore
7.91
Don't Know

• Research reveals that 30 percent of the respondents are yet to decide

on technology investments as compared to 25 percent in the previous
fiscal
• Also it has been observed that technology investment upto Rs. 25 lakhs
have witnessed a decline by 8 percent compared to previous fiscal. At
the same time, all other categories that are more than Rs. 25 lakhs have
witnessed a nominal surge
Indian SMBs ask for further improvement in available technology for Commercial
Documentation

Commercial Documentation as a business My IT system is meeting the need of

priority Commercial Documentation
1.77

14.14
12.28
Very Important

Somewhat Important 15.86 Yes No NA

Slightly or not
Important 71.87
84.09

• Research reveals that 98 percent of the respondents feel that

Commercial Documentation is an important aspect in their
businesses. At the same time, 28 percent respondents
highlighted that their existing IT system is not matching up the
requirement of Commercial Documentation
Indian SMBs ask for technology advancement to meet Regulatory Compliance

Statutory Government Documentation as a My IT system is meeting the need of Statutory

business priority Government Documentation

3.19

11.87
13.56
Very Important
Yes
Somewhat Important 22.96
No
N/A
Slightly or not
65.17
Important
83.24

• Research reveals that 97 percent of the respondents feel that

Regulatory Compliance is an important aspect in their
businesses. At the same time, 35 percent respondents
highlighted that their existing IT system is not matching up the
requirement of Regulatory Compliance
Existing technology for Financial Accounting is not meeting the requirements to
the fullest amongst SMBs
Financial Accounting Software in use at Financial Accounting as a business priority
organisation
1.70
2.43
4.87
5.83
Very Important
Ready software
19.90
Customised solution Somewhat Important

Do not use software

Slightly or not
N/A Important
71.84
93.43

My IT system is meeting the need of Financial

Accounting

7.89

12.98
Yes
No
NA
79.13
Existing technology for Financial Accounting is not meeting the requirements to
the fullest amongst SMBs

• It is observed that 98 percent of the respondents feel Financial

Accounting as an important work in their businesses, out of
which 92 percent are using technology. Also out of these 92
percent, 21 percent of the respondents still feel that their IT
system is not matching up the requirements of Financial
Accounting
 Indian SMBs ask for further improvement in available technology for
Customer Service
Customer Service as a business priority My IT system is meeting the need of Customer
Service
3.34

11.44
11.05
Very Important

Yes
Somewhat Important
27.13
No
Slightly or not 61.44 NA
Important
85.60

• Research reveals that 97 percent of the respondents feel that

Customer Service is important in their businesses. Also it is
observed that 39 percent respondents accept that their
existing IT system is not meeting the requirement for Customer
Service
 Indian SMBs yet to find value in CRM tools to manage customers

CRM Software in use at organisation

21.89
27.22
Ready software
Customised solution
Do not use software
15.38
Others

35.5

• It has been observed that 63 percent of the respondents yet do

not have any CRM software
 Dedicated IT team in Indian Logistics SMBs

• 47 percent respondents in Indian Logistics SMBs mentioned

that they have a dedicated IT team in their organizations
Key observations on Larger players from
Indian Logistics segment
 Parameters considered for Larger Indian Logistics players

• Larger Logistics players considered in the survey are

organizations having turnover more than Rs. 50 crore

• The demographic of Larger Logistics players consist of 3PLs

and NVOCCs, providing entire gamut of offerings in domestic
and international logistics and container owners respectively

• The larger players account to 14 percent of the overall

sample size of the survey
Three motivating factors for Larger Logistics players to invest in technology
Customer Service as a motivating factor to Direct Customer Request as a motivating
invest in technology factor to invest in technology

12.2 11.11

Most important 14.81 Most important

Somewhat important Somewhat important
51.22
36.59 Third most important Third most important

74.07

Improving Data Quality as a motivating

factor to invest in technology

24.14
31.03
Most important
Somewhat important
Third most important

44.83
Three motivating factors for Larger Logistics players to invest in technology

• Research reveals that 89 percent of the Larger Logistics

players highlighted that Direct Customer Request will remain
the key driving factor to invest in technology. The other two
key driving factors would be improving Customer Service (88
percent) and Improving Data Quality (69 percent)
 Larger Logistics players bullish on investing in technology

How much did you spend on technology in How much do you plan to spend in the year 2010
2009

Less than Rs. 10 lakh

Rs. 10-25 Lakh Less than Rs. 10 lakh

22.99
35.53 36.84 Rs. 10-25 Lakh
Rs. 25-50 Lakh
Rs. 25-50 Lakh
3.45 49.43
Rs. 50 Lakh-1 Crore
Rs. 50 Lakh-1 Crore
0.00 6.90 Greater than Rs. 1 Crore
Greater than Rs. 1 Don't Know
Crore 1.32
17.24 10.53 13.16
Don't Know 2.63

• Research reveals that only 7 percent of the respondents have

invested between Rs. 25 lakh and Rs 1 crore for the year 2009
• The technology investment for the year 2010 estimates a surge
to nearly 14 percent
• Due to uncertainties like recession, 36 percent of Larger
players are yet to decide on technology investment in the year
2010
Larger players ask for further improvement in available technology for Commercial
Documentation
Commercial Documentation as a business My IT system is meeting the need of
priority Commercial Documentation

1.43 4.29

8.57
10.00
Very Important

Somewhat Important Yes No NA

Slightly or not
Important
90.00 85.71

• Research reveals that 99 percent of the respondents feel that

Commercial Documentations are important aspects in their
businesses. At the same time, 14 percent respondents
highlighted that their existing IT system is not matching up the
requirement of Commercial Documentation
Larger players ask for technology advancement to meet Regulatory Compliance

Statutory Government Documentation as a My IT system is meeting the need of Statutory

business priority Government Documentation
1.47

11.76 10.14

Very Important 8.7

Yes
Somewhat Important
No
N/A
Slightly or not
Important
86.76 81.16

• Research reveals that 99 percent of the respondents feel that

Regulatory Compliance is an important aspect in their
businesses. At the same time, 19 percent respondents
highlighted that their existing IT system is not matching up the
requirement of Regulatory Compliance
Existing technology for Financial Accounting is not meeting the requirements to
the fullest amongst Larger players
Financial Accounting Software in use at Financial Accounting as a business priority
organisation
4.17 2.78

6.33
6.33
Very Important
Ready software
Customised solution Somewhat Important

54.43 Do not use software

32.91 Slightly or not
N/A Important

93.06

My IT system is meeting the need of Financial

Accounting
4.29
5.71

Yes
No
NA

90
Existing technology for Financial Accounting is not meeting the requirements to
the fullest amongst Larger players

• It is observed that 97 percent of the respondents feel Financial

Accounting as an important work in their businesses, out of
which 87 percent are using technology

• Also out of these 87 percent, 10 percent of the respondents

still feel that their IT system is not matching up the
requirements of Financial accounting
Larger players are unsatisfied with the existing technology for Customer Service

Customer Service as a business priority My IT system is meeting the need of Customer

Service
4.17
5.56

8.57
Very Important

Yes
Somewhat Important 25.71
No
Slightly or not NA
65.71
Important
90.28

• Research reveals that 96 percent of the respondents feel that

Customer Service are an important aspect in their businesses.
At the same time, 34 percent respondents highlighted that
their existing IT system is not matching up the requirement of
Customer Service
 Dedicated IT team amongst Larger Indian Logistics players

Do you have a dedicated IT department in

your organization?

3.41

Yes
43.18 No
53.41 don’t know

• 43 percent respondents of larger Indian Logistics players

mentioned that they do not have a dedicated IT team in their
organizations
Thank you