Evaluating Significance of Marketing in Indian IT Companies Using DEA

Abstract

Information technology, and the hardware and software associated with the IT industry, are an integral part of nearly every major global industry. The information technology (IT) industry has become of the most robust industries in the world. IT, more than any other industry or economic facet, has an increased productivity, particularly in the developed world, and therefore is a key driver of global economic growth. Economies of scale and insatiable demand from both consumers and enterprises characterize this rapidly growing sector. This paper evaluates the relative efficiencies of various Indian IT Companies with the use of Data Envelopment Analysis (DEA) in the presence of different factors of marketing (Total Income & sales as output and Selling and Distribution expenses & Communication expenses as Input). The top 10 and bottom 10 companies are selected and two sample t-tests is applied to evaluate the role of no. of branch offices, no. of strategic partners and no. of vertical industries served in the future. Data envelopment analysis (DEA) is receiving increasing importance as a tool for evaluating and improving the performance of manufacturing and service operations. This paper aims to use DEA to categorize the Decision Making Units (DMUs) to two classes of efficient and inefficient units with two input factors and two output factors.