BWI: MAIT-Emerson Study Reveals Power Downtime Costs India Inc over Rs 43, 000 crores in 2008-09

Press release from Business Wire India
Source: MAIT
Wednesday, May 27, 2009 05:15 PM IST (11:45 AM GMT)
Editors: General: Consumer interest, Economy; Business: Banking & financial services, Business services, Education & training, Financial Analyst, Information technology; Technology
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MAIT-Emerson Study Reveals Power Downtime Costs India Inc over Rs 43, 000 crores in 2008-09
Downtime Loses Double since 2003

New Delhi, Delhi, India, Wednesday, May 27, 2009 -- (Business Wire India) -- - Loss is close to 1% of India's GDP

- Infrastructure stress on power utilities - a key reason for downtime

- 78% feel that power scenario will improve only after a year; confidence lowest in Delhi and Pune, high in Chennai

- Contingency planning already a part of the Indian business psyche- over 95% firms have a power source other than grid supply

Manufacturers' Association for Information Technology (MAIT) the apex body representing the IT hardware industry in India and Emerson Network Power (India), the global leader in Business-Critical Continuity today announced the finding of their joint study on Network Power Downtime. The study, an in-depth analysis of the impact of downtime in corporate India due to high occurrence of power outages, scheduled as well as non-scheduled, revealed that India Inc lost Rs. 43, 205 crores in 2008-09. The amount of such direct losses has more than doubled since 2003 when these amounted to Rs. 22,000 crores.

With significant companies relying on IT infrastructure for automation, productivity and business management, employee productivity and customer management were severely impacted by such downtime. Among the various verticals studied, the manufacturing sector was the most adversely impacted.

The study, in its third round, to map the impact of network downtime in the industrial sector, was conducted by India's leading consulting firm M/s Feedback Business Consulting Services Pvt. Ltd in January 2009. The study covered around eight hundred firms across seven industrial centres namely Mumbai, Delhi, Bangalore, Chennai, Kolkata, Hyderabad and Pune. Detailed information on downtime experiences, typical causes & solutions adopted, reactions to uptime etc. was sought from senior executives across fourteen major industry verticals including manufacturing, electronics, telecom, IT services, IT enabled services, banking & finance, pharmaceutical, biotechnology, SMEs, retail, hotels, real estate, infrastructure and hospitals.

Mr. Vinnie Mehta, Executive Director, MAIT said, "Contingency planning is part of the India Inc. mindset, based on traditional experiences with infrastructure limitations. This trend will continue in the light of global power failures encountered in Western countries. Firms will need to pay more attention to maximizing uptime if they are to remain competitive in a globally networked economy."

Commenting on the findings of the study, Mr. Sandeep Nair, MD, Emerson Network Power (India) Pvt Ltd said, "In India, while the metros have a good power supply, the interiors reflect a different picture altogether. As one moves towards the hinterland, one realizes that there are frequent power cuts. The problem is further compounded by unclean power and other basic constraints like earthing, cabling and lack of a viable infrastructure. This has necessitated deployment of Business Critical Continuity solutions for growing businesses. Today, we are moving towards a borderless world and constant supply of electricity is crucial to stay connected 24X7."


Key highlights of the study:

- Nearly 62% of the firms polled were extremely dependent upon IT & Automation

- Power disruption frequency highest in Delhi followed by Pune and Bangalore.

- The average speed of restoration is 71 min, Bangalore most affected with high frequency and longer outages. In Hyderabad outages are infrequent but long

- Telecom segment had the fastest restoration, while it was slowest in pharma/biotech, hotels/hospitals and manufacturing

- Downtime losses, across all verticals averaged to Rs 54,434 per hour - highest in telecom and real state/infrastructure companies, lowest in the SMEs

- Major impact of downtime is employee productivity and customer management

- Companies, without alternative sources of power, were highly depended on the grid. Mumbai continues to be most depended on grid for power

About MAIT:

Set up in 1982 for purposes of scientific, educational and IT industry promotion, MAIT has emerged as an effective, influential and dynamic organisation. Representing hardware, training R&D and associated services sectors of the Indian IT Industry, MAIT's charter is to develop a global competitive Indian IT Industry, promote the usage of IT in India, strengthen the role of IT in national economic development and promote business through international alliances. For more information on MAIT please visit www.mait.com.

About Emerson Network Power (India) Pvt. Ltd.:

Emerson Network Power (India) Private Ltd. is a wholly owned subsidiary of Emerson Electric USA, the Indian subsidiary was set up in September 1993, and is an established market leader in the power protection solutions and precision air condition segment. It manufactures & markets Uninterruptible Power Supply (UPS) systems; Climate and Environmental systems (PAC); DC power systems; Automatic Transfer Switches (ATS) and power distribution catering to major industries such as Telecom, Infotech and Process Control among others. More information on Emerson Network Power, its services and products is available at: www.emersonnetworkpower.co.in.

About Feedback:

Feedback Business Consulting Services Pvt. Ltd. (Feedback Consulting) is a eighteen year old research based consulting firm, specializing in assessing opportunities across the Indian and select global markets. Apart from conventional business-to-business (B2B) research, FEEDBACK specializes in strategic consulting, and evaluating opportunities across diverse businesses. Feedback consults primarily on client specific studies. For more information on Feedback Consulting please visit www.feedbackconsulting.com


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