Enabling IT as a
Competitive
Edge
Background
While the benefits of IT are well documented and despite India being the home to top IT talent, the level of information technology adoption in ACMA companies is subpar. Except for the large ACMA firms, most members have not capitalized on the benefits IT offers, to achieve their business goals. The firms are either not aware of the information technology solutions available or are not able to afford the solutions. Besides, lack of IT solutions specifically addressing the needs of ACMA firms and the inherent complexity and cost of involved in tailoring off the shelf solutions to specific needs has also kept many firms away. To add to the owes the best Indian IT companies have by and large neglected the fellow auto companies to focus on providing services to higher margin foreign clients. Such hurdles have discouraged the ACMA firms from leveraging information technology to its full benefit.

As a first step towards solving this challenge, ACMA and NASSCOM did an extensive study of the member community to understand the business issues and challenges faced in adopting information technology solutions. The study validated the premise that the adoption of information technology in manufacturing firms is low and adoption of IT can increase the potential of the firms. The study also highlighted that only a few ACMA firms have aligned their IT investments with business objectives and those that did not faced many challenges. Besides, the need of auto component firms to integrate various functions and processes has driven them to invest in IT, and as a result, in firms that have implemented IT, there has been a considerable increase in the productivity as well as revenues.

Some of the issues identified by the study are listed below –
  • Disconnect between business goals and IT initiatives.
  • Lack of real-time decision making systems.
  • Inability to access to various business information in a timely manner
  • Presence of ad-hoc sources of information exacerbating the problem of availability of accurate data.
  • Lack of information to ensure timely delivery of products with the best quality.
  • Lack of ability to track production costs.
  • Ignorance of data available in system leading to poor decision making
  • Deficiencies in IT infrastructure and lack of knowledge in migrating to new systems.
  • Inability to identify the right IT systems and lack of relevant market intelligence to negotiate with vendors.
  • Unrealistic expectations from managements and poor response from employees towards new systems.
To summarize IT adoption is low due to the following reasons
  • Low levels of awareness about the benefits IT can offer
  • Lack of expertise/skills within the member firms to capitalize on IT
  • High complexity of solutions resulting in poor implementation and realization of benefits
  • High cost of solutions making them unaffordable
  • Poor quality of IT providers who are servicing member firms
  • Poor solution fit to the needs leading to poor adoption
  • Poor IT infrastructure inhibiting growth and scalability
  • Lack of processes to evaluate benefits and ROI of IT investments
  • Not aligning IT plans with business goals
  • Lack of management priorities