A STUDY ON THE ACCEPTABILITY OF IT OUTSOURCING IN PHARMACEUTICAL SECTOR WITH REFERENCE TO WIPRO...

7/29/2019 A STUDY ON THE ACCEPTABILITY OF IT OUTSOURCING IN PHARMACEUTICAL SECTOR WITH REFERENCE TO WIPRO

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CHAPTER I

INTRODUCTION

INTRODUCTION TO THE STUDY:

This study was primarily undertaken to thoroughly understand the readiness to the

outsourcing of IT infrastructure in pharmaceutical sector within the Indian mid-market, which is

believed to have immense untapped potential. It was therefore, vital to understand the mindset of

the people in pharmaceutical businesses to identify the possible obstacles in the path of adoption

of outsourcing. In the process, many significant IT adoption challenges faced by the

pharmaceutical segment were noticed. It also highlights how internet-enabled technologies can

help this sector in increasing efficiency and achieving faster growth.

1.1THEORETICAL BACKGROUND:

Outsourcing is an arrangement in which one company provides services for another company

that could also be or usually have been provided in-house. Outsourcing is a trend that is

becoming more common in information technology and other industries for services that have

usually been regarded as intrinsic to managing a business. In some cases, the entire information

management of a company is outsourced, including planning and business analysis as well as the

installation, management, and servicing of the network and workstations..

The three categories of outsourcing with the lowest level of adoption are desktop support, data

center operations, and help desk outsourcing. Even though these categories are the least popular,

they still show a positive growth trend, with a greater number of organizations increasing their

use of outsourcing than back-sourcing. Furthermore, the level of back-sourcing in these

categories is low, indicating a relatively high level of satisfaction with this type of outsourcing.

While there is several economic and business advantages to outsourcing IT infrastructure, three

stand out. First, strategic outsourcing can deliver savings on capital expenses and a reduced total

cost of ownership (TCO) for the organization. Instead of making heavy investments in a physical

security infrastructure, like that of a fully-redundant data center, a firm can leverage an

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outsourcing providers technology, capabilities and infrastructure for a best-of-breed solution

that does not require burdensome capital investment.

Additionally, a firm can leverage service level agreements (SLAs) to ensure IT infrastructure

availability and performance sync with the firms business objectives. SLAs are not often

provided internally if IT infrastructure is managed in-house.

Another benefit is the ability to take advantage of technical expertise of the outsourcing provider

when it comes to managing capabilities such as load balancing, security, storage systems, etc.

The ability to benefit from this expertise is of tremendous value, particularly for firms with

smaller data center facilities unable to accommodate the latest advancements in areas such as

increased density and power utilization.

There is a lot of scope and opportunity in outsourcing for pharmaceutical companies but its a

great challenge to manage this relationship and generate value. There is a need of confidentiality

of the proprietary knowledge amongst the companies to ensure a continuous growth in

outsourcing. Outsourcing gives solution to various problems of pharmaceutical companies and

allows them to take advantage of the potential of new drug development technologies. Its a

dream which is certain to come true in future when pharmaceutical companies and their

outsourced partners work together in a symbiotic relationship, wherein pharmaceuticalcompanies focuses on their core competencies in marketing and commercialization and

outsourced partners supply new innovative products. It is a crucial element in R&D process as

many multinational companies looking for more cost effective measures and at the same time

trying to add more products in their pipeline.

Outsourcing has become an important strategic question in pharmaceutical companies.

Opportunity for contract manufacturing is tremendous looking at the current market conditions.

Pharmaceutical giant Pfizer recently announced drastic cost cutting measures. They intend to

shut two of its manufacturing plant is US and planning to sell their third plant located in

Germany. But the interesting fact is Pfizer is expecting to have an 30% increase in its sales, so

with shutting three plants all over it is assumed that they will now go for contract manufacturing

of its medicines.

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Just a short time back outsourcing in the pharmaceutical industry was pertained to manufacturing

process, clinical trials and few steps more before the product delivery. With increasing

competition and globalization there has been a rapid increase in demand for more sophisticated

medicines and cheaper drugs. Multinational companies like Pfizer, Novartis are now outsourcing

key technical aspects of medicines like new product drug discovery, drugs enhancements and

bio-tech R&D. Some of the major drivers towards this outsourcing decision are

To increase the focus on core competencies

Take the benefit of range of services and functions available from outsourcing

Increasing cost pressures due to competition

Growth of SME biotechnological companies

Transparency of costs offered by outsourcing companies

Globalization of pharmaceutical industries

Outsourcing- the current revolution of pharmaceutical industry is being used more strategically

as a part of companys overall business strategy. The U.S. market for outsourced IT service in

pharmaceutical manufacturing is currently growing at an annual rate of 10%-12%. This is

expected to grow further in future as there is an increase in services and products offered by

smaller pharmaceutical companies. With more number of companies are entering the market

there has been an increase in the number of services which entices companies more towards

outsourcing

Many have argued on circumstances and conditions under which a firm should have an internal

IT service or an outsourced IT service. But it is very important for companies to be readily

prepared if they want undertake outsourcing. There are numerous factors that companies need to

consider, some of them are: Internally standardized processes

Investment in ongoing management and relationships

Provision of support and guidance

Support local management infrastructure

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The time needed to build trust with the teams at all other global locations

Importantly the decision to outsource should not be taken lightly as there are significant

considerations to be taken, like: payoffs associated with the ventures, risks associated while

outsourcing manufacturing and front office services, transaction costs and capital investments

needed.

1.2 STATEMENT OF THE PROBLEM:

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Outsourcing is often viewed as involving the contracting out of a business function to an

external provider. Almost any conceivable business practice can be outsourced for any number

of stated reasons. The implications of outsourcing objectively and subjectively vary across time

and space. IT infrastructure is emerging as an important element in the attaining of the business

objectives and the growth of the business. Across domain IT infrastructure is an integral part of

the organization process and growth. Balancing this IT infrastructure and the core business will

be a difficult task for the companies. Global competitiveness is driving market growth across

domains and as the business expands, the need to focus on core capabilities becomes

increasingly critical. The companies may require the best resources to be devoted across your

enterprise as they grow. Maintaining the IT infrastructure and the core business will be a burden

for the organizations concentrating on the other business. With this outsourcing of IT

infrastructure has gain a lot of importance. The companies can concentrate in their core business

with the outsourcing of the IT infrastructure part.

1.3 NEED FOR THE STUDY

Gives a better understanding of pharmaceutical companies concerns on the outsourcing of their

IT infrastructure. And helps in building future strategies which are targeted at resolving those

issues.

An outlook on challenges faced by the In-House team of IT services in pharmaceutical

companies provides information on key areas to focus efforts on.

An outlook on benefits demanded by the pharmaceutical companies before the consider

outsourcing to an external provider.

Understanding the issues related to outsourcing in the pharmaceutical companies and help to

improve service delivery.

CHAPTER II

REVIEW OF LITERATURE

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Anudeep Gupta (2007) in his study on OUTSOURCING DECISIONS IN

PHARMACEUTICAL INDUSTRY describes that companies should be open to outsourcing as

it has the potential to create a value for them and its shareholders. Outcome of this form ofstrategic decision are far reaching given that number of positive and negative features can be

attributed to this form of cooperation. As from the analysis he found that there were several

convincing reasons for performing outsourcing but primary rationale was consistent with the

belief of transaction cost economics i.e. to achieve economic improvement in the performance of

business functions. His findings have challenged the concept of core and non-core activities as a

basis for outsourcing decision in the companies. Core and non-core concept has widely

dominated much of the literature and frequently used in practice. However the findings revealed

that apart from core and non-core there are several other benefits offered by outsourcing and

holds equal importance to the companies. This includes outsourcing of functions from a

specialist supplier as an effort to reduce the costs and to benefit from the competitive knowledge

and practices. Transaction cost economics and resource based view both complements each other

as a recommendation for outsourcing decision and management. Findings also revealed the

presence of political influences on outsourcing.

Organizational politics involves the strategies that individuals employ in order to obtain and use

power to influence organizational goals in order to further their own interest and ambitions

(McIvor, 2005)

He finds with regards to outsourcing decision the firms are looking forward to leverage their

existing resources to gain superior gains and efficiencies in R&D. Cost appears to be a little

concern when firms are looking for excellence in drug discovery and delivery. Given the

condition of rising costs of innovation it can be argued that future of pharmaceutical outsourcing

will continue to depend on these external agents considering the benefits offered by them.

However a major concern today is the growing dependence on the external supplier which is

perceived as a major drawback to outsourcing. It was noted that with outsourcing pharmaceutical

companies gets an important learning curve in regards to managing its resources more

efficiently. Although history suggest that there are significant gains made through this tool but

there are still number of issues that need to be considered if this process is to be more rewarding.

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Finally he concluded there is little evidence to suggest that companies have a clear understanding

or a strategy for the conduct of outsourcing. In the end, outsourcing has still not proved its

potential that many researchers have thought to be. It can however provide monetary and

tangible benefits to those who implement it properly.

McIvor (2008) in his research work has given a due focus on concepts of RBV and TCE

in outsourcing decision making. He mentions that many of these approaches were mainly

concerned with application of quantitative methods to evaluate outsourcing decision. However

transaction cost economics have been extremely significant in outsourcing frameworks proposed

in literature (Vining and Globerman, 1999; Ngwenyama and Bryson, 1999). Theories influenced

by transaction costs argue that a successful outsourcing decision can be selected on the basis of

transaction cost minimization. Vining and Globermans (1999) framework focuses on how an

organization assesses ex ante the potential transaction costs that arise in outsourcing and how and

in what circumstances transaction costs can be reduced (McIvor, 2008). His work gave a due

emphasis on how can outsource decisions be taken on the basis of transaction costs. He focused

on key issues like product complexity, asset specificity, uncertainty while considering an

outsourcing decision. Transaction cost theory has addressed wide range of decision related

problems like contracting, make v/s buy decisions and assessing the boundaries of the firms

(Walker and Weber, 1984; Williamson, 1976). Williamson (1975) in the topic transaction cost

economics (TCE), has given a deep understanding in the reasons for the existence of the firms

and determination of the boundaries of the firm. Williamson in his paper mentions that there are

two types of costs that are bearded by the firm firstly being production costs and secondly

transaction costs. Production costs are the costs which are incurred during building and running

of a machine. Transaction costs are incurred at the time of making of the contract due to

asymmetries of information, bounded rationalities and opportunism. Such cost arises from the

activities like evaluating the suppliers, negotiation, control function, etc. Transaction costs exist

not only in the market but also in the hierarchies. The basic idea here is to find a governance

structure with the lowest costs for each transaction (Arnold, 2001). Hence there is a need to have

a deep understanding of characteristics of transactions. Williamson argues that firms want to

minimize their total costs which comprises of both transaction costs as well as production costs.

In some situations transaction cost will be lower if the particular transaction is taking place in an

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open market which in other conditions will be lower if integrated vertically (Williamson,

1975).Williamsons in his paper has specified that transaction costs can be judged on the basis of

three variables, Frequency, Uncertainty and Asset Specificity. Transactions can be frequent or

rare, certain or uncertain or involve specific or non-specific assets, whatever their nature is, these

three variables will decide whether the transaction costs are lower in the market or in the

hierarchy (Williamson, 1975).

Xiaoding wei (2007) on the topic INTERNATIONAL OUTSOURCING IN THE

SWEDISH COMPANIES has said that the important motives for the decision in all options are

the same, they are reducing cost, accessing to core competence, using suppliers' resources,

focusing on innovation, reducing capital, regain control of inside companies, transferfixed cost into available cost, and so on. In his articles, there are also many parts discussing the

effects of those four options. Some of them believe that the benefits of outsourcing options are a

lot, such as reducing cost, accessing core competence, quality improvement, productivity

improvement. However, many authors think the outsourcing options have a lot of shortages as

well. If companies begin to use an outside supplier or off-shoring, they will lose their

independence, rely on supplier. And it could hinder innovation result by losing core competences

and decreasing quality. Even the cost is not as low as the companies suppose.

In the survey analysis done by him contains a lot of information of the Swedish companies'

choices of four options and performances of their business. The statistics results shows us that

cost, fixed cost and investment reducing are important motives for all four options.

Especially, the off-shoring has an accessing core competence motive. Others motives which

highlighted are not as important. Some of them, like TTM, in data analysis, are almost equals

to 1(1 means least important). In house production option has all positive effect results. In

outsourcing and off shoring options, only have time and lead time negative effects.

International outsourcing option has one more positive effect, it is quality. In Scheffes results,

in-house production and international outsourcing options have significant different in delivery

time and lead time effects. It means the time effects are difference between those two options.

In characteristic group, the results also show that production characteristics are easy to produce

and standard products.

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In the motives groups, most important motives of option decisions are costs reduce, fix costs

and investment reducing. Off-shoring option has one more important motive, accessing core

competence. He realize that motives of focusing on innovation, lower NPD, reducing

capital need, reducing TTM and Manufactory control are not important motives in Swedish

companies. In the effects group, effects of in house option are the best. In house production

option has no negative effect. Other options have both lead-time and delivery time negative

effects. International outsourcing option has one more negative effect, it is Quality.

Outsourcing may hinder innovation and rely on supplier, however, in empirical study, all those

effects are positive. In production characteristics group, Swedish companies only outsourced

standard and easy products. So this is one reason why hinder innovation and rely on

supplier are positive effects.

Domenico Blyth (2008) in his study on INFORMATION TECHNOLOGY

OUTSOURCING AND ITS RISKS gives significant information regarding the prevailing

perceptions ITO(Information Technology Outsourcing) clients have in regard to the ITO risks of

supplier lock-in, hidden costs and the loss of control over outsourced IT. Within the theoretical

background, the evolution of ITO and some of the most frequent ITO theories were presented.

Moreover, in order to appropriately present in which kind of ITO operations the risks under

discussion are most likely to appear, a multidimensional approach was chosen to present the

various dimensions of ITO. Furthermore, reasons for and risks of ITO were presented according

to their strategic, economic, technological or political nature. Thereupon, the risks selected for

further examination were presented and discussed according to transaction cost theory or

resource-based theory. Additionally, the dimensions of ITO which are characteristic for the risks

under discussion were identified. Since the aim of this thesis was the exposure of relevant

information on the prevailing perceptions ITO clients have in regard to supplier lock-in, hidden

costs and the loss of control over outsourced IT, primary data was collected. This primary data

collection aimed at the revelation of significant information. The very information was obtained

by conducting telephone interviews with both ITO clients and IT suppliers and by analyzing

these interviews in an extensive way. Furthermore, this work aimed at examining reasonable

measures to take with regard to the risks under consideration. These measures were presented

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according to the respective ITO risk they belong to and the effects these measures have were

explained. Additionally, the measures were subdivided into internal and external measures, so

that an overview of the presented measures was facilitated. Finally, the influence of the risks

under consideration on potential back sourcing considerations was examined. After all, it became

apparent that all risks under consideration play decisive roles

in regard to back sourcing considerations. Certainly, small companies with limited financial

resources are in less advantageous situations than companies which are financially strong, but

still even small companies should not take the risks entailed by total outsourcing. Instead of

taking these risks companies should consider selective outsourcing. That is to say, an adequate

amount of IT at least core tasks such as first level support and reasonable ITO management

should be guaranteed internally. By this means, future back sourcing operations is facilitated

considerably. Furthermore, it became apparent that the transition of material assets and the

documentation of provided IT do not represent major problems in regard to back sourcing

decisions. It seems as if especially companies which source out sensitive data and/or are highly

dependent on external IT provision should consider to bring parts of the outsourced IT back in-

house. Companies of rather big dimensions are likely to have complex structures with

interconnected business processes which lead to a dilemma. On the one hand, projects which

require deeper insights into the specific, complex structure of organizations are most likely to be

performed better and more cost-efficient when they are confided to internal IT providers. On the

other hand, organizational growth seems to result in an increase of the complexity of IT tasks

which need to be fulfilled. As a result, this increasing complexity leads to an increasing necessity

to work with specialized, external IT suppliers. Since each case of ITO is characterized by

different peculiarities, back sourcing decisions can most likely not be made based on the analysis

of a few factors, but need to be scrutinized with regard to the peculiarities of the respective

organization under consideration. However, the points mentioned above certainly represent an

auxiliary starting point for discussions on back sourcing considerations.

Without doubt, ITO companies should primarily aim at guaranteeing their capability of acting

without being significantly dependent on external IT provision. By this means, companies which

conserve their independency are solely responsible for the efficient utilization of IT. As a result,

the influence IT has on the organizational success will primarily originate from internal

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achievements and is not highly dependent on external partners. Therefore, ITO companies should

scrutinize whether it is reasonable to bring parts of their outsourced IT back in-house or not.

Angela Mui (2003) in the study INVESTIGATION OF IT/IS OUTSOURCING IN

SINGAPORE tells about the concept of outsourcing information technology (IT) or systems

(IS) has been around since mid 1960s. Today, outsourcing has become a potentially viable

business solution that many IT managers are looking into in order to remain competitive in the

current dynamic business and technological environment. In Singapore, the recent IT

outsourcing by DBS Bank has raised the awareness and sparked off the interest to conduct this

study. The purpose of this thesis is therefore to investigate this latest IT trend and to look into the

concepts and practice of outsourcing in Singapore. An intensive literature review and anempirical survey based on questionnaire technique were conducted to learn about outsourcing

concepts and practices. In the literature review, the concepts of outsourcing were explored. The

different types of outsourcing practices and trends, categories of outsourcing services, drivers,

benefits, risks, challenges and critical success factors of outsourcing based on the lessons learnt

from past outsourcing experiences were discussed while the survey assessed the IT/IS

outsourcing trend in Singapore. The survey revealed that outsourcing has been a positive

experience. Generally, there are differences in views between people of different roles and there

is a gap in the understanding and practice of IT/IS outsourcing in Singapore in comparison to the

literature.It is learnt in this study that outsourcing is not a perfect and workable solution for

everyone. Organizations should always stand back and examine the outsourcing option. The

bottom line is outsourcing should always be backed by an objective business case. It should be

not a decision that blindly follows the market trend. Organizations should not simply jump into

the outsourcing bandwagon without fully comprehending the outsourcing concept. Thorough

evaluation of the feasibility of such business venture is necessary.

S. Chinbat (2010) said in his study that increasing globalization has strongly urged

software organizations to lower software development costs and access to best skilled resources,

which lead using of global software development team as one of many possible solutions. More

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and more software companies have become multinational and used benefits of offshore

insourcing, outsourcing and virtual software development team in order to increase their

competiveness and keep their software development cost down. However, substantial number of

them fails to achieve their expected high result due to many inherent drawbacks of virtual

software development and software companies have limited time and budget for researching

these problems and ways to successfully solve them. The paper investigates major factors that

enable global software development teams work successfully. Lately, many researches have

been done on understanding success factors of global software development.

Sourabh Kankhar (2005) in his article RIGHT PRESCRIPTION FOR THE GROWTH

OF PHARMACEUTICAL COMPANIES tells about the major stages of the pharmaceutical

value chain comprise drug discovery, drug development, manufacturing, distribution, and salesand marketing. Improving efficiency for a speedy ROI in every stage has become a critical factor

to ensure the success of the company. Strategic adoption of Information Technology (IT) is also

essential to speed up the process of research, development and sales of drugs.

The pharmaceutical companies in Asia are slowly starting to adopt IT solutions in their

value chain. At present, majority of them are focusing on automating the manufacturing,

distribution and sales and marketing process. There is a major demand for solutions such as ERP,

SCM, CRM and sales force automation. In future, as IT component becomes critical for

pharmaceutical research, a major market for drug discovery-related IT solutions is foreseen.

Demand for enterprise-wide solutions such as data mining, knowledge management and business

intelligence will be on a rise when companies realise the need to integrate and analyse data for

informed decision making.

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Figure 2.1 IT adoption level in pharmaceutical companies

IT adoption in a pharmaceutical company can be characterized by four different levels.

The level 1 company has only department- specific solutions, which automate a single

department and are not integrated. The implementation of IT solutions in level 2 companies is

pretty integrated into multiple functional areas. An ERP solution which integrates the companys

financial, manufacturing, sales and human resources department is a typical example of level 2

companies. Solutions such as business intelligence, data warehousing, data mining along with

the enterprise-wide solutions for instance SCM, form the IT set up of the level 3 companies.

These solutions assist the company to make informed decisions after extensive data analysis. The

level 4 companies are totally automated with the help of solutions such as enterprise applicationintegration.

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Figure 2.2 Asian pharmaceutical IT market demand and potential

According to him the major drivers for the Asian pharmaceutical IT market are The

booming pharmaceutical market in Asia, Growing competition between multinational and local

pharmaceutical companies in this market, Growing awareness of the advantages of IT adoption

by the pharmaceutical companies in Asia ,Growth in the number of clinical trials as an increasing

number of pharmaceutical companies in Asia have started focusing on R&D initiatives.

Information technology is seen to be a very important factor for the success of the

pharmaceutical market in Asia. Many pharmaceutical companies are expected to use IT to

completely transform their business. The IT spending of companies will reflect their strategies to

introduce new drugs, enter new markets, and be more competitive in the challenging Asian

pharmaceutical market

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INDUSTRIAL AND COMPANY PROFILE

3.1 INDUSTRY PROFILE

India's outsourcing industry is estimated to be worth about $52 billion. India

continues to dominate global outsourcing market. Banking and financial services contribute

nearly 40 percent to India's outsourcing industry.India is the leading country for offshore

outsourcing. The offshore outsourcing industry started in India and it has be able to grow the IT

and BPO export sector to $47 billion and capture more than half the offshore outsourcing

industry. That is not to say that India does not have challenges or is the best location for every

offshore outsourcing effort, but it has an unparalleled history and size.

The Americas and Europe are the largest customers for the Indian outsourcing industry and

account for 60% and 31% respectively of IT and BPO exports. The largest vertical sectors are

financial services (41%), high-tech/ telecom (20%), manufacturing (17%) and retail (8%). In

2009 the IT and BPO export industries employed about 2.2 million people.

IT and BPO services outsourcing first started in India in the mid 1980s. The large, English

speaking, low-cost workforce was the main attraction. The industry grew rapidly through the

1990s aided by the dot com boom and IT upgrades to prepare for potential Y2K bugs. The 2000s

saw similar growth with work moving to India in down cycles to help companies cut costs and in

boom times to capitalize on the readily available talent.As on 31 March 2002, 42 IT outsourcing

companies in India achieved SEI-CMM Level 5 assessments. 316 Indian outsourcing companies

have achieved quality certifications. More and more IT outsourcing firms are striving for it.

Moreover, the Indian software industry has accepted and adopted newly emerging People -

Capability Maturity Model (People-CMM). As per 27 June 2002 statistics, India has 85

companies at SEI-CMM Levels assessment for this. These statistics indicate the fact that almost

all the companies in the Indian IT sector have realized the value of quality and its accepted

standards and that they are vigilant towards achieving it. It will be interesting to take a look at

the Global Accreditation, which the Indian IT players have won

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The 2008-2009 global recession has had a negative impact on outsourcing growth in India, but

the sector is experiencing a turn-around in 2010. Many US and European companies are still

cautions about the speed or staying power of the 2010 economic recovery and thus are looking to

maintain a low cost base in locations such as India. We expect IT and BPO outsourcing in India

to bounce back to double digit growth rates in 2010.

The Indian information technology (IT) industry has played a key role in putting India on the

global map. Over the past decade, the Indian IT-BPO sector has become the countrys premier

growth engine, crossing significant milestones in terms of revenue growth, employment

generation and value creation, in addition to becoming the global brand ambassador for

India.Software and BPO industry in India has provided a major boost to the country's economy.

It provides employment to millions of Indians. In 2002 Spectramind was bought by softwaremajorWipro, and BPO by then had become mainstream like the IT Industry in India. The team

that had set up Spectramind went on to start Quatrro in 2006, a BPO specialising in high end

BPO/KPO services. By 2002 all major Indian software organizations were into BPO, including

Infosys (Progeon), Inforlinx, HCL,Satyam (Nipuna) and Patni. By 2003 Daksh was bought out

by IBM, and later in 2006 MphasiS was acquired by EDS. Even international 3rd party BPO

players likeConvergys and Sitel had set up shop in India, swelling the BPO movement to India.

Then service arms of organizations like Accenture, IBM, Hewlett Packard, Dell also set up shop

in India. BPO industry in India is worth $11 billion. During 2007-08, Indian information

technology industry experienced a slowdown and revenue growth rate has been brought down to

21 percent from previous year figure of 41 percent. But it's still predicted that Indian BPO and IT

industry will grow to become a $132 billion entity by 2012.The frenetic pace, with which Indian

players are moving towards achieving internationally recognized quality control standards,

largely arises out of the awareness that the BPO industries cannot sustain themselves on the

advantages of lower costs and English speaking abilities alone. The importance of consistency,

low error rates and customer satisfaction has never been felt as strongly as right now.

Naturally, governing bodies like NASSCOM are holding no bars in its efforts to improve quality

regulation. By the end of 2004, it plans to introduce a common certification program across

India for aspiring candidates, in terms of the skills and knowledge required by the BPO industry.

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Another significant move towards ensuring quality is NASSCOM's initiative towards controlling

issues like copyright infringement. It plans to formulate a comprehensive draft proposal to ensure

information security and data privacy. The proposal will also emphasize the need for internal

checks and continuous quality reviews, both by the internal senior management team as well as

by the client team.

NASSCOM also plans to create a common yardstick for BPO organizations. Attempts to create

such a yardstick are being made by Carnegie Mellon University which is involved in developing

E-SCM or the E-Services Capability Model. This model is extremely useful for customers who

are selecting a suitable service provider, as it allows them to compare the capabilities of different

service providers, and also compare issues associated with the initiation and completion of the

project.

The concept of benchmarking is also beginning to be used more regularly. Benchmarking is a

continuous process of assessing and comparing an organization's performance with a recognized

industry leader. This is especially useful in knowing where a particular company stands in

relation to its competitors. It also makes it easier to identify which areas need more attention in

terms of quality control. The Quality Assurance Institute holds various training programs in Six

Sigma, COPC Implementation and Support and non-certified skills like maintaining customer

satisfaction, people management, service levels and transaction monitoring.

Outsourcing to India offers significant improvements in quality and productivity for overseas

companies on crucial parameters such as number of correct transactions, number of total

transactions, total satisfaction factor, number of transactions/hours and the average speed of

answers. Surveys by NASSCOM also revealed that Indian companies are better focused on

maintaining quality and performance standards. Indian ITES/BPO companies are on an

ascending curve as far as the quality standards are concerned. Organizations that have achieved

ISO 9000 certification are migrating to the ISO 9000:2000 standards and companies on the

CMM framework are realigning themselves to the CMMI model. Apart from investing in

upgrading their CRM and ERP initiatives, many Indian ITES companies are beginning to

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acknowledge the COPC certifications for quality and are working towards achieving COPC

licenses.

IT services is expected to grow by 2.4 per cent in 2010, and 4.2 per cent in 2011 as companies

coming out of recession harness the need for information technology to create competitive

advantage .NASSCOM said that the domestic IT-BPO is expected to grow by 15-17 per cent

during FY11. According to NASSCOM, the industry will witness a healthy growth in 2010, led

by growth in the core markets and supplemented by significant contributions from emerging

markets. Growth drivers include a thrust on platform BPO, Analytics, Finance & Accounting,

Remote Infrastructure Management, ADM, and Cloud Services. The annual survey on the

outlook for FY10-11 said that the growth in the domestic IT-BPO spend is driven by a robust

economy, increased IT spending by government and adoption of IT by SMBs.

The data centre services market in the country is forecast to grow at a compound annual growth

rate (CAGR) of 22.7 per cent between 2009 and 2011, to touch close to US$ 2.2 billion by the

end of 2011, according to research firm IDC India's report published in March 2010. The IDC

India report stated that the overall India data centre services market in 2009 was at US$ 1.39

billion.

China has proved to be a major threat for Indian outsourcing industry. Chinese cities likeBeijing, Shanghai, Shenzen, and Dalian are regarded as top destinations for outsourcing business

to. Chinese outsourcing industry is worth about $15.2 billion. Philippines and Malaysia have also

taken to outsourcing in a big way. Philippines have a pool of quality talent that can compete and

even excel in rivalry against Indian outsourcing professionals. India offers a cost advantage that

is not easy to beat. But, rising wage bill of IT professionals and global financial meltdown is

challenging India's position as a preferred destination for outsourcing business processes.

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3.2 COMPANY PROFILE

Wipro (an acronym of "Western India Palm Refined Oils") started as a vegetable oil trading

company in 1947 from an old mill at Amalner, Maharashtra, India founded by Azim Premji's

father.

When his father died in 1966, Azim, a graduate in Electrical Engineering from Stanford

University, took on the leadership of the company at the age 21. He repositioned it and

transformed Wipro (Western India Palm Refined Oil Ltd) into a consumer goods company that

produced hydrogenated cooking oils/fat company, laundry soap, wax and tin containers and later

set up Wipro Fluid Power to manufacture hydraulic and pneumatic cylinders in 1975. At that

time, it was valued at $2 million

In 1977, when IBM was asked to leave India, Wipro entered the information technology sector.

In 1979, Wipro began developing its own computers, and in 1981 started selling the finished

product. This was the first in a string of products that would make Wipro one of India's first

computer makers. Wipro Technologies hired managers who held their employees to strict

performance standards.

In 1980 Wipro moved into software development and started developing customized software

packages for their hardware customers. This expanded their IT business and subsequently

developed the first Indian 8086 chip. Since 1992 Wipro has begun to grow its roots offshore in

United States and by 2000 Wipro Ltd ADRs were listed on the New York Stock Exchange site.

The company's revenue grew by 450 percent from 2002 to 2007.

Wipro started a highly appreciated initiative called WASE - Wipro Academy of Software

Excellence in 1996 .Under this program, some of the brightest science graduates are selected and

enrolled in an MS (Software Engineering) program in collaboration with BITS,Pilani.

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Timeline

1945 - Incorporation as Western India Palm Refined Oil Limited

1947 - Establishment of an oil mill at Amalner, Maharashtra, India

1960 - Manufacture of laundry soap 787 at Amalner

1970 - Manufacture of Bakery Shortening Vanaspati at Amalner

1975 - Diversification into engineering and manufacture of hydraulic cylinders as WINTROL

(now called Wipro Fluid Power) division in Bangalore.

1977 - Name of the Company changed to Wipro Products Limited

1980 - Diversification into Information Technology.

1988 - Crossed the $10 million mark in annualized revenues.

1990 - Incorporation of Wipro-GE medical systems

1992 - Going global with global IT services division

1993 - Business innovation award for offshore development

1995 - Wipro gets ISO 9001 quality certification

1996 - Crossed the $100 million mark in annualized revenues.

1997 - Wipro gets SEI CMM level 3 certification, enterprise wide processes

Start of the Six Sigma initiative, defects prevention practices initiated at project level.

1998 - Wipro first software services company in the world to get SEI CMM level 5

1999 - Wipro's market capitalization is the highest in India

2000 - Start of the Six Sigma initiative, defects prevention practices initiated at project level.

Wipro listed on New York Stock Exchange.

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2001 - First Indian company to achieve the "TL9000 certification" for industry specific quality

Standards.

-Wipro acquires American Management Systems global energy practice

- Becomes world's first PCMM Level 5 Company.

-Wipro becomes only Indian company featured in Business Weeks 100 best-performing

technology companies.

2002 - Wipro acquires Spectramind.

-Ranked the 7th software services company in the world by BusinessWeek

2003 - Wipro acquires Nervewire.

-Wipro Technologies Wins Prestigious IEEE Award for Software Process Excellence

-Wipro Technologies awarded prestigious ITSMA award for services marketing excellence

-Wipro wins the 2003 Asian Most Admired Knowledge Enterprise Award.

2004 - Crossed the $1 Billion mark in annualized revenues.

-Wipro launches Indias first RFID enabled apparel store.

-Wipro Technologies named Asian Most Admired Knowledge

-IDC rates Wipro as the leader among worldwide offshore service providers

2005 - Wipro acquires mPower to enter payments space and also acquires European System on

Chip (SoC) design firm NewLogic

2006 - Wipro acquires Enabler to enter Niche Retail market

2007 - Wipro acquires US's Infocrossing for 600mn

2009 - Wipro acquires Gallagher Financial Systems to enter mortgage loan origination space.

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WIPROs Vision

Wipro's Vision is focused on attaining leadership in the areas of business, customer and people.

Business Leadership: Among the top 10 Information Technology Services companies

globally and the No.1 Information Technology company in India.

Customer Leadership: The No.1 choice of customers through innovative solutions and

Six Sigma processes.

People Leadership: Among the top 10 most preferred employers globally by creating an

environment of empowerment, intellectual challenge and wealth sharing.

Brand Leadership: Wipro to be among the 5 most admired brand in India.

Quality Policy of Wipro

Most mature Six Sigma program in the industry - Ensures that 91 percent of its projects

are completed on schedule, much above the industry average of 55 percent

World's first company to be awarded PCMM Level 5 and CMMi Level 5

World's first SEI CMM ver. 1.1 Level 5 software services company

Defect prevention - Post release defect rates at less than 0.2 per KLOC, amongst the

lowest in the industry

Cycle time reduction due to lower rework rate

Cost of failure avoidance and high project visibility

Spirit of Wipro

Intensity to win: Make customers successful. Team, Innovate, Excel.

Act with sensitivity: Respect for the individual. Thoughtful and responsible.

Unyielding integrity: Delivering on commitments. Honesty and fairness in action

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Wipro Group Companies:

Wipro Consumer Care & Lighting

Wipro Consumer Care and Lighting (WCCLG), a business unit of Wipro Limited, started with

vegetable oil production in 1947 and has since come a long way and established a profitable

presence in the branded retail market. With a vast plethora of products spanning soaps, baby care

products, health and wellness, Wipro's products have touched the lives of millions of consumers

across India and global markets. It is also a leader in institutional lighting in specified segments

like software, pharma and retail. Wipro Consumer Care and Lighting has been one of the fastest

growing FMCG companies, both organically and through acquisitions.

Wipro Eco Energy:

Wipro Eco Energy, the renewable energy services arm of Wipro, is a one-stop shop

for all the renewable and alternative needs of your organization. Our scope of work

provides the entire range of sustainable and energy efficient solutions such as,

Customized clean-energy solutions for institutional clients

Energy Efficiency (reduce) and Renewable Energy (replace)

Consulting, implementation and managed services

They work on the industrial scale; our technologies are proven, have direct customer relevance,

and are commercially viable. They are technology agnostic because we work on best

technologies and recommend the same based on your unique environment. Wipro Eco Energy

provides clean and sustainable energy solutions for all kinds of spaces, from factories to

institutions and from offices to homes.

Wipro Infrastructure Engineering

Wipro Infrastructure Engineering, a division of Wipro Limited, delivers precision-engineered,

world-class hydraulic cylinders, components and solutions, and truck hydraulic components to

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OEMs globally in the infrastructure and related industries. It represents the Kayaba, Kawasaki,

Sun Hydraulics and Teijin Seiki range of hydraulic products in India.

With state-of-the-art manufacturing facilities and extensive product development and testing

facilities, Wipro Infrastructure Engineering has emerged as a leader in the hydraulic cylinders

and truck tipping systems market in India.Wipro has recently entered water treatment business

and provides ultra-pure water treatment systems and solutions for various industries.

Wipro GE Medical Systems Limited:

Wipro GE Medical Systems Limited is focused on delivering advanced solutions for significant

challenges faced by healthcare organizations today. Wipro GE Healthcare, a joint venture

between Wipro and GE, is part of GE Healthcare South Asia and caters to customer and patient

needs with a commitment to uncompromising quality.They successfully manage a continuum of

clinical information across the entire enterprise and our highly energized team provides superior

customer and patient satisfaction, maximizing customer productivity with Six Sigma quality and

uncompromising integrity.

Wipro IT:

In today's world, where IT infrastructure plays a key role in determining the success of business

organization, Wipro Technologies and Wipro Infotech helps derive maximum value from IT

investments. Wipro offers clients the full array of IT lifecycle services, from technology

optimization to mitigating risks, there is a constant demand to evaluate, deploy and manage

flexible, responsive and economical solutions. Outsourcing non-core operations can help you

transform your business into a leaner and smarter organization with greater adaptability to

changing economic and business trends.

Wipro Infotech:

Wipro Infotech footprint extends to India and Middle East Wipro Infotech has 13 regional

offices in India besides offices in the UAE, Bahrain, Egypt and KSA to ensure that clients can

reach Wipro Infotech anytime to discuss technology and business requirements.In India, Wipro

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Infotech adds value to organisation through consulting services, business solutions, and

professional services and as a total outsourcing partner. Wipro Infotechs product line for this

region extends to products - desktops, notebooks, servers for the B2B segment, enterprise

products and other software products and licences.

With 13 regional offices across the country, they are at hand to ensure a smooth ride past all

technology requirements and crises. In India and Middle East region Wipro Infotech service line

extends to providing clients consulting and software solutions and services, along with our

integrated total outsourcing solutions. These offices are staffed by dedicated business

development and delivery teams besides onsite and off-site consultants with extensive regional

experience.

Wipro Infotech sets up, manages and supports your entire IT infrastructure covering your

hardware, telecom, database management and system support operations. As a product agnostic

company, Wipro Infotech have the skills and experience to work on best of breed technologies

ensuring that your IT resources are always available and running. Wipro Infotech manages your

infrastructure on an SLA basis and Wipro Infotech has the ready resources to plan and

implement the entire IT setup for your organisation or a part of it. Through our Global Service

Management Centre (GSMCTM) Wipro Infotech deliver remote services including remote

monitoring and management of entire networks, systems and desktops. Wipro Infotech deliversthe following infrastructure services:

Infrastructure optimisation

Infrastructure setup and provisioning on a pay-by-use basis

Infrastructure management

Enterprise application services

Across verticals, Wipro Infotech manages and support the legacy applications and address the

requirements of developing and maintaining new applications. Wipro Infotech have the

experience and technology expertise to manage large and complex enterprise application

requirements covering functions such as ERP, CRM, SCM, HR management, e-commerce etc.

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Wipro Infotechs enterprise application services deliver scalable, secure and full-featured

solutions that integrate critical functions of the organisation while functioning across

geographies. The key services include:

New application development and management

Business applications sustenance

Application optimization

Program Governance

The complexity of managing total outsourcing projects is compounded by the extensive IT

infrastructure and resources that need to be covered. Coordinating between the vast technical and

operational aspects of the project requires a strong control model that overarches the given

project while driving an actively managed partnership. Wipro Infotech, have created a program

governance framework that helps support business objectives on strategic, functional and

operational levels. This addresses the rules, processes, metrics and organizational structures

needed for effective planning, decision-making, steering and control of the outsourcing

engagement in order to mitigate the risk inherent in any outsourcing relationship.

Wipro Infotech Total Outsourcing (TOS) services are targeted at achieving maximum value by

providing end-to-end best of breed IT practices for your business. From technology optimisation

to mitigating risks, Wipro Infotech fulfils your constant IT infrastructure and application

demands while evaluating, deploying and managing flexible, responsive and economical

solutions. Through our acknowledged quality processes and program governance frameworks,

we help you achieve and sustain business momentum. Based on service level agreements

(SLAs), we meet every need and objective of your business by providing IT infrastructure

solutions that seamlessly align with organizational processes and practices.

Wipro Infotechs Total Outsourcing services are delivered through a Program Management

Office (PMO) which manages and governs all our projects. Through the PMO Wipro Infotech

assure you that our clearly articulated vision strictly adheres to high standards of service delivery

and quality. Wipro Infotechs program governance processes include:

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Service delivery management: Transition management, service management, change

management, risk management, project management, performance review

Technology management: Technology assessment, impact analysis, business case,

deployment strategy, sustenance strategy

Relationship management: Governance effectiveness, customer satisfaction,

communication, expansion of scope, issue management

Contract management: Invoicing and verification, service consumption analysis, contract

management, contract change management

Wipro Infotechs Total Outsourcing services create value through technology to help transform

your IT universe into a powerful business driver. The substantial benefits derived through our

service include:

Strategic: Wipro Infotechs continuing focus on business excellence helps you focus on your

market objectives. Wipro Infotech provides effective decision support systems with industry

benchmarking and are accountable for the work Wipro Infotech deliver at every stage of our

partnership with you.

Operational: Wipro Infotechs process delivery and best practices are backed by strong quality

standards including ITIL, PMI, CMMi, ISO 9001:2000 and Six Sigma. The operational benefits

are improved efficiency for your IT infrastructure with access to advanced technologies. Wipro

Infotechs technology experts ensure process and quality led service delivery.

Financial: You gain significant cost savings in overall IT operations through predictable expense

management and a faster time-to-market ensures a quick return-on-investment (ROI) for your

business.

The strong frameworks that guide the outsourcing engagement to deliver business performance

are complemented by Wipro Infotechs deep domain and industry vertical expertise. The unique

demands and nuances of specific industry micro verticals need a clear focus and in-depth

understanding to create true business value in an end-to-end outsourcing engagement. At Wipro

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Infotech, recognizes this and have therefore developed domain competencies in banking and

finance, manufacturing, energy, airlines, retail, utilities, government, telecom, healthcare etc. to

help keep pace with changing demands of your industry. Through this vertical focus Wipro

Infotech also ensure that your organisation is leading and not merely following when it comes to

deployment of technology and industry standards.

As one of the world's top technology vendor, Wipro Infotech has helped organizations strategies,

integrate, manage, maintain and sustain their IT infrastructure to emerge stronger in their

respective domains. They are the partner of choice for corporate as they outsource their IT

requirements, thus enabling them to focus on their core competencies. Our success lies in our

continued focus to help you enhance your business value through IT. Wipro Infotech is

committed to deliver quality to your enterprise through our onsite, near site, multi-site, offsite

and Global Service Management Centre (GSMCTM) service delivery models. Our end-to-end

offerings in Total Outsourcing include:

Competitors

1. WNS Group

2. Daksh e-Services

3. Convergys

4. HCL Technologies

5. Zenta

6. ICICI Onesource

7. MphasiS

8. EXL

9. GTL Ltd.

10. HTMT

11. 24/7 Customer

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12. Sutherland Technologies

3.3 PRODUCT PROFILE

BUSINESS TECHNOLOGY SERVICE

Business Technology Services helps customers realize high business value by incorporating

information strategy, business collaboration, business integration and managing IT risk, across

the value chain of the enterprise. We are at the forefront of building business and technology

solutions and IPs, applying advanced technology areas including Cloud Computing,

Sustainability, Mobility, Social Computing and Analytics among others.

ENTERPRISE APPLICATION SERVICE

Wipro's Enterprise Application Services (EAS) practice proactively assists organizations in their

business transformation initiatives and offers strategic vision which aims at business process

transformation, thus helping reduce TCO, increase ROI and improve productivity. Our enterprise

solution packaged applications include skilled resources and best-in-class technology for

business process transformation.

WIPRO TOTAL OUTSOURCING

Wipro Total Outsourcing (TOS) services are targeted at achieving maximum value by providing

end-to-end best of breed IT practices for your business. From technology optimization to

mitigating risks, we fulfill your constant IT infrastructure and application demands while

evaluating, deploying and managing flexible, responsive and economical solutions. Through our

acknowledged quality processes and program governance frameworks, we help you achieve and

sustain business momentum. Based on service level agreements (SLAs), we meet every need and

objective of your business by providing IT infrastructure solutions that seamlessly align with

organizational processes and practices.

WIPRO CONSULTING

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Wipro Consulting, we help companies think ahead. Business today is evolving faster than at any

other time in history, and tomorrow there are going to be challenges we can't even imagine

today. But to survive and thrive, imagine that future, anticipate it.

Wipro Consulting can give you the business analyses you need and follow through with

implementation. As part of Wipro, the world's leading provider of integrated business,

technology and process solutions, we can deliver a depth of resources that's unsurpassed by other

firms. We have the flexibility to deliver solutions quickly and cost-effectively. And our

confidence in our ability to think ahead makes us willing to be measured against any business

outcomes. Wipro Consulting, help you get the advantage of future thinking - along with the

advantage of being taken the rest of the way.

INFRASTRUCTURE MANAGEMENT SERVICES

Wipros Infrastructure Management Services cater to the three most crucial principles of global

business: Growth Through Partnership, Service Delivery Excellence and Transformation

Focused Execution. Their service delivery models are dedicated to ensure the high availability

of your IT infrastructure and applications. From assuring you of the highest infrastructure

security to quality processes, they provide your business a competitive edge in the market. To

meet the varying needs of different organizations, they adopt a flexible approach to service

delivery through onsite, multi-site and offsite engagement models. They offer Remote

Monitoring and Infrastructure Support Services from our Global Command Centers

(GCC) and Global Service Management Centers (GSMC) spread across India, Middle East,

Malaysia, US, UK and Eastern Europe. The various infrastructure management services are the

following.

Business Service Management

Wipro delivers holistic Business Service Management solutions that help organizations in

effective integration of IT with business. Our Business Service Management ( BSM) Practice is

capable of delivering end-to-end services covering the lifecycle of BSM adoption - starting from

consulting on service management processes using ITIL framework, tools implementation to

ongoing managed services on deployed tools. They have successfully delivered numerous

engagements globally. With a combination of strong partnerships with market-leading BSM

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technology providers, technically skilled and certified professionals, practitioner approach and

global delivery model, they deliver unmatched business value to customers.

IT Service Desk

Wipro IT Service Desk handles over 8.5 million contacts annually with its world class

infrastructure support. The Service Desk provides an interface to users for the entire spectrum of

service management activities. Service offerings range from automating existing service desks to

implementing new ones, and consolidating IT service desks to incorporating web-enabled

support. Their IT Service Desk - led by ITIL methodology, acts as the nodal point between

service providers and end-users. The Wipro IT Service Desk provides end-to-end ownership of

the calls till resolution. Wipro has a high pool of ITIL certified consultants and works on global

infrastructure and processes, with capability to migrate and operate on large scale IT support and

call centers.

Data Center Service

At Wipro, they have been helping enterprises drive business transformation by harnessing the

power of technology. Leveraging technology expertise and decades of experience in managing

multiple customers IT environments, Wipro has put together the right people, tools and processes

to deliver an end-to-end array of data center services - from consulting and solution design to

product supply and program governance. Wipro owns seven Data Center facilities occupying

360,000 square feet in India and the United States, spread across Mysore, Greater Noida, Omaha,

Tempe, Leonia, Norcross and Brea. Our specially designed data centers are built from the ground

up to provide security, physical environment and networking capabilities you need to support

even the most mission-critical and complex applications - 24 hours a day, 365 days a year.

Enterprise Security

Wipro's Enterprise Security service protects an enterprises information assets through

comprehensive management of security components and mitigates adverse impact on

confidentiality and availability. Understanding these challenges faced by organizations, Wipro

offers comprehensive Managed Security Services. Wipro Enterprise Security Solution practice

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extends to a wide technology and services spectrum. To mitigate the risks through a high level of

security for information assets our comprehensive service offering, covering all aspects of an

enterprise's securit

CHAPTER IV

RESEARCH DESIGN AND METHODOLOGY

4.1 OBJECTIVES OF THE STUDY:

Primary Objective:

To find out the acceptability level of the pharmaceutical companies to outsource the IT

infrastructure.

Secondary Objective

To identify the companies using the in- house IT service and the companies outsource

their business.

To analyze the various challenges faced by the in-house IT teams.

To identify the various benefits the clients want while they outsource their business.

To find out whether there is any significant relationship between the number of

employees working in the company and the outsourcing of the IT infrastructure.

To find out whether there is any significant relationship between the annual turnover of

the company and the outsourcing of the IT infrastructure.

4.2 HYPOTHESIS:

Hypothesis1:

H0: There is no significant relationship between the number of employees working and the

outsourcing of the IT infrastructure.

H1: There is a significant relationship between the number of employees working and the


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Hypothesis2:

H0: There is no significant relationship between the turnover of the company and the


H1

: There is a significant relationship between the turnover of the company and the outsourcingof the IT infrastructure

RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem.

It may be understood as science of studying how research is done scientifically. In it we study

the various steps that are generally adopted by a researcher in studying his research problem

along with the logic behind them. It is necessary for the researcher to know not only the research

methods/ techniques but also the methodology. As far as this project is concerned, the

predicament under study is the acceptability of the outsourcing by the companies in the

pharmaceutical sector.

4.3 RESEARCH TYPE:

The type of research used in this study is Descriptive Research. This research is the most

commonly used and the basic reason for carrying out descriptive research is to identify the cause

of something that is happening.

4.4 DATA COLLECTION METHOD:

Data are of two types. They are

Primary data

Secondary data

For the purpose of this project, data were collected from both primary as well as secondary

source.

Primary data:

Primary data are those data that are collected afresh for the first time and which seem to

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be original in character. Primary Data for the purpose of study was collected through

questionnaire, one-to-one interviews and telephonic interview with CIO/IT head/IT Managers.

Secondary data:

Secondary data were collected from internal and external sources. Internal sources

include information from company records and the company magazine. External sources are

internet, text books and through web sites.

4.4 SAMPLE DESIGN

The purpose of sample design is to give an accurate picture of some aspect of the

marketing environment. Sample design is a definite plan for obtaining sample from the sampling

frame. Sample design includes Sample unit, Sample size and Sampling technique.

Population of the Study

All the pharmaceutical companies in the Bangalore city was selected for the study. A

total of 78 companies were listed.

Sampling Unit

The sampling unit consisted of the pharmaceutical companies in the Bangalore city.

Sample Size:

Samples were collected from the fifty pharmaceutical companies in the Bangalore city

Sampling Technique:

The sampling technique used is Judgment Sampling. In judgment sampling, the

researcher or some other "expert" uses his/her judgment in selecting the units from the

population for study based on the populations parameters.

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4.6 TOOLS FOR DATA ANALYSIS:

The tools used for data analysis are

Simple percentage analysis

Correlation

Simple Percentage Analysis:

Simple percentage is also used for this study. This method is nothing but the average of

collected frequency. It is one of the simple and prominent methods used for analysis.

Correlation:

Correlation is statistical tool used to find out the significant association between two

variables. It is also used to find out whether the variables have negative or positive relation.

4.7 LIMITATIONS OF THE STUDY

The information provided by the CIO/IT Head/ IT Manager may be biased.

The study was conducted only in Bangalore.

The study was conducted only for a period of 3 months.

The sample for the study was only 50 there may be some changes in the results if the

sampling size was increased.

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The responses to questionnaires sent via emails were vague and the process was time-

consuming as the respondents hardly sent back their feedback within the expected time

period.

CHAPTER V

ANALYSIS AND INTERPRETATION

5.1 PERSONAL INFORMATION ABOUT THE REPONDENTS

The respondents for the study were the IT heads of the different pharmaceutical

companies in Bangalore city. Information about the companies are given below

Table 5.1.1

Table showing number of employees working in the company

no of employees working

8 16.0 16.0 16.0

17 34.0 34.0 50.0

11 22.0 22.0 72.0

8 16.0 16.0 88.0

6 12.0 12.0 100.0

50 100.0 100.0

>100

100-500

500-1000

1000-5000


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Chart 5.1.1

Chart showing the number of employees working in the company



100

Percent

40

30

20

10

0

INTERPRETATION:

The above chart shows that out of 50 companies 16% of the companies have >100 employees,

34% have 100-500 employees, 22% have 500-1000 employees, 16% have 1000-5000 employees

and 12% have


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Table 5.1.2

Table showing the annual turnover of the companies

annual turnover of the company

9 18.0 18.0 18.0

11 22.0 22.0 40.0

12 24.0 24.0 64.0

10 20.0 20.0 84.0

8 16.0 16.0 100.0

50 100.0 100.0

>10cr

10-100cr

100-500cr

500-1000cr


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INTERPRETATION:

The above chart shows that out of 50 companies 18% of the companies have the turnover less

10Cr, 22% have 10-100Cr, 24% have 100-500Cr, 18% have 500-1000Cr and 14% companieshave a turnover of more than 1000Cr.

Table 5.1.3

Table showing the number of the company locations

number of locations company have

22 44.0 44.0 44.0

12 24.0 24.0 68.0

11 22.0 22.0 90.0

3 6.0 6.0 96.0

2 4.0 4.0 100.0

50 100.0 100.0

>2

2-5

5-7

7-10


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INTERPRETATION:

The above chart shows that 44% of the companies have less than two locations, 24% of the

companies have 2-5 locations, 22% of the companies have 5-7 locations, 6% of the companies

have 7-10 locations and 4% of the companies have more than 10 locations.

5.2 ANALYSIS OF THE RESULTS THROUGH TABLES AND GRAPHS

Analytical tool: Simple Percentage Analysis

Table 5.2.1

Table showing the companies having outsourced and In-house IT infrastructure

outsourced or in-house

13 26.0 26.0 26.0

37 74.0 74.0 100.0

50 100.0 100.0

outsourced

in-house

Total

Valid

Frequency Percent Valid Percent

Cumulative

Percent

Chart 5.2.1

Chart showing the companies having outsourced and In-house IT infrastructure



in-houseoutsourced

Percent

80

60

40

20

0

40


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INTERPRETATION:

The above chart shows that out of 50 companies 26% of the companies outsource their IT

infrastructure and 74% of the companies have In-house IT facilities.

Table 5.2.2

Table showing the number of companies outsource partial and fully

partially or fully outsource d

8 16.0 61.5 61.5

5 10.0 38.5 100.013 26.0 100.0

37 74.0

50 100.0

partially

fullyTotal

Valid

SystemMissing

Total


Cumulative

Percent

Chart 5.2.2

Chart showing the number of companies outsource fully and partially

partially or fully outsourced

partially or fully outsourced

fullypartially

Percent

70

60

50

40

30

20

10

0

INTERPRETATION:

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The chart shows that out of 13 companies that outsource their IT services 62% have outsourced

partially and 38% has outsourced fully.

Table 5.2.3

Table showing the companies that have remote and onsite IT service

remote or on-site

29 58.0 58.0 58.021 42.0 42.0 100.0

50 100.0 100.0

on-site

both

Total

Valid


Cumulative

Percent

Chart 5.2.3

Chart showing the companies that have remote and onsite IT service

remote or on-site

remote or on-site

bothon-site

Pe

rcent

60

50

40

30

20

10

0

INTERPRETATION:

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The above chart shows that out of 50 companies none of the companies have remote

management, 58% of them have Onsite IT and 42% have both remote and onsite.

Table 5.2.4

Table showing the number of members in the IT support team

number of members in the IT support team

19 38.0 38.0 38.0

15 30.0 30.0 68.010 20.0 20.0 88.0

6 12.0 12.0 100.0

50 100.0 100.0

>10

10-20

20-30

30-40

Total

Valid


Cumulative

Percent

Chart 5.2.4

Chart showing the number of members in the IT support team.



30-4020-3010-20>10Percent

40

30

20

10

0

INTERPRETATION:

43


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The above chart shows that out of 50 companies 38% of the companies have less than 10 persons

in the IT support team, 30% have 10-20 members, 20% have 20-30 members, 12% have 30-40

members and none of the companies have more than 40 persons in the IT support team.

Table 5.2.5

Table showing the satisfaction level with the In-house IT facilities

satisfication with in-house it

34 68.0 91.9 91.9

3 6.0 8.1 100.0

37 74.0 100.0

13 26.050 100.0

yes

no

Total

Valid

SystemMissingTotal


Cumulative

Percent

Chart 5.2.5

Chart showing the satisfaction level with the In-house IT facilities



noyes

Pe

rcent

100

80

60

40

20

0

INTERPRETATION:

44


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The above chart shows that out of the 37 companies having In-house facilities 91.89% of them

are satisfied with the facilities and 8.1% were not satisfied.

Table 5.2.6

Table showing the major challenges faced by the In-house IT facilities

challenges faced in in-house IT

10 20.0 27.0 27.0

6 12.0 16.2 43.2

9 18.0 24.3 67.6

9 18.0 24.3 91.9

3 6.0 8.1 100.0

37 74.0 100.0

13 26.0

50 100.0

Attrition

Providing career growth

Non availablity of

industry best practise

Delay in

technology/Process

adoption

others

Total

Valid

SystemMissing

Total


Cumulative

Percent

Chart 5.2.6

Chart showing the major challenges faced by the In-house IT team



others

Delay in technology/

Non availablity of i

Providing career gro

Attrition

Percent

30

20

10

0

45


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INTERPRETATION:

The above table shows that out of 37 companies 27.02% have attrition as the main challenge,

16.21% have providing career growth as the challenge, 24.32% have non availability of industry

best practice, 24.32% have Delay in process adoption as challenge and 8.1% have other

challenges.

46


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Table 5.2.7

Table showing the benefits companies want while they outsource to an external provider

benifts expected while outsourcing to an external prov ider

10 20.0 27.0 27.0

13 26.0 35.1 62.2

7 14.0 18.9 81.1

4 8.0 10.8 91.9

3 6.0 8.1 100.0

37 74.0 100.0

13 26.0

50 100.0

Save cost of delivery

Implement industry

best practise

people management

Risk Management

others

Total

Valid

SystemMissing

Total


Cumulative

Percent

Chart 5.2.7

Chart showing the benefits the companies want while they outsource to an external

provider

benifts expected while outsourcing to an extern

benifts expected while outsourcing to an external provider

others

Risk Management

people management

Implement industry b

Save cost of deliver

Perce

nt

40

30

20

10

0

INTERPRETATION:

47


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The above chart shows that out of the 37 companies using the In-house facilities 27.02% of them

want to save the cost of delivery as the benefit to consider outsourcing the IT to an external

provider, 35.13% want to implement industry best practice as the benefit,18.91% want the

benefit of people management,10.81% want the benefit the risk management and 8.1% want

other benefits.

Table 5.2.8

Table showing the acceptability level to outsourcing if benefits are given

Acceping of outsourcing if benefits are giv en

30 60.0 81.1 81.1

7 14.0 18.9 100.0

37 74.0 100.013 26.0

50 100.0

Yes

No

Total

Valid

SystemMissing

Total

F requency Percent Valid Percent

Cumulative

Percent

Chart 5.2.8

Chart showing the acceptability level to outsourcing if benefits are given

Ac ceping of outsourcing if be ne fi ts are

Ac cep ing of ou ts ou rc ing if be ne fits are given

NoYes

Perc

ent

100

80

60

40

20

0

INTERPRETATION:

48


49/62

The above chart shows that out of 37 companies 81.08% of the companies are ready to accept the

IT outsourcing if benefits are given and 18.91% are not ready to accept even if the benefits are

provided.

Table 5.2.9

Table showing the opinion of IT heads about the option of IT outsourcing

opinion about outsourcing

39 78.0 78.0 78.0

11 22.0 22.0 100.0

50 100.0 100.0

yes

no

Total

Valid

F requency Percent Va lid Percent

Cumulative

Percent

Chart 5.2.9

Chart showing the opinion of the IT heads about the option of IT outsourcing



noyes

Percent

100

80

60

40

20

0

INTERPRETATION:

The above chart shows that out of 50 companies 76% of them feel that outsourcing of IT support

service is a good option for their business and 24% feel it is not a good option.

49


50/62

Table 5.2 10

Table showing the reason of IT heads for not consi

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A STUDY ON THE ACCEPTABILITY OF IT OUTSOURCING IN PHARMACEUTICAL SECTOR WITH REFERENCE TO WIPRO...

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