Press Release
Technology adoption drives logistics business success: Findings of TAIL report by Kale Consultants Ltd.

· Kale Consultants’ “Technology Adoption Index for Logistics” (TAIL) report reveals direct correlation between technology penetration, sophistication and maturity with business growth
· Five point increase in TAIL rating corresponds to double staff productivity.

Mumbai, December 16, 2009: Kale Consultants, the leading technology solution provider to the airline, Airports, logistics and travel (AALT) industry, today announced the launch of the detailed report on “Technology Adoption Index for the Logistics industry” (TAIL). The first-of-its-kind report, which includes a detailed study covering over 235 companies, is an attempt to arrive at a simple integrated measure of technology adoption in the Indian logistics industry. The index will now serve as an industry benchmark for logistics companies to derive their technology effectiveness and business competitiveness.

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

Kale’s ‘Technology Survey for the Indian Logistics Industry’ pointed out that only 0.26 % is spent on IT by the Logistics ecosystem as against the global standard of 2-3%. This low level of spend on IT is among several reasons for the high cost of running the Logistics business in India. The TAIL index focuses on the reasons behind the low spend (and the low level of IT adoption). The TAIL index goes a step beyond in relating the level of adoption to the business benefits that have been experienced by the Logistics industry. The TAIL index can be used as a benchmark by the Logistics service provider in ascertaining the quantum of IT spends and the benefit from the investment.

In the Indian Logistics Industry, only less than 10% of work is outsourced by the shippers and there lies a huge potential for improving productivity and hence the growth. Even more, less than 1% of the industry is organized and there is lack of industry-wide standards, processes, and established technology solutions that creates an opportunity to establish the benefits of technology.

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

Some of the key findings of the study are as under:

The Chartered Institute of Logistics and Transport (CILT) is a world-wide organization with over 33,000 members working in over 100 countries and holds unparalleled professional international recognition. Founded in London in 1919 by the principal transport interests in the United Kingdom, CILT was set up to promote the study of the art and science of logistics and transport in all its modes such as road, rail, shipping, civil aviation and pipelines.Technology adoption is much more skewed in non-asset based logistics service providers (around 15% above average TAIL score) as opposed to the asset-based players (over one-third above average of the group).

Technology adoption is much more skewed in non-asset based logistics service providers (around 15% above average TAIL score) as opposed to the asset-based players (over one-third above average of the group).

Asset-based players with an average TAIL of 52 are ahead of non-asset based players at average score of 45.

The industry has moved to a high level of usage although the range of processes covered by IT and the integration of discrete systems across the business is nowhere near optimal. There is a strong need felt for home-grown solutions that fit the needs of Indian players.

The industry sees IT as important to their operations (average criticality score of 3.77 on 5.0).

However, the low score for dependence on IT Criticality measures underlines the lack of a central role for technology as a business enabler.

Revenue, staff size and geographic spread of operations are all positively correlated with technology adoption (higher TAIL).

Age of firms has no relation to technology adoption. So there are large, established firms yet to graduate to increased use of IT and smaller firms too that are reluctant to use IT.

To receive the detailed report of the inaugural “Technology Adoption Index for Logistics Companies”, please write to info@kalelogistics.in.

For logistics companies wanting to derive their “Technology Adoption Index Score”, write to info@kalelogistics.in mailto : info@kalelogistics.in

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