Abstract
The importance of manpower employed in IT companies is discussed and this factor is compared with top five IT Companies of India. Data for five years (from 2009 to 2013) has been collected and an analysis between Profit after Tax (PAT), and number of employees has been done. Thereafter, Data Envelopment Analysis between manpower and Profits has been done. The ratios of profitability efficiency have been calculated these figures have been compared and it has been shown that the number of employees has a very significant effect on profitability in IT companies. DEA models can generate new alternatives to improve performance compared to other techniques. Linear programming is the backbone of DEA methodology that is based on optimization platform. Hence, what differentiates the DEA from other methods is that it identifies the optimal ways of performance rather than the averages.
Highlights
The management of information technology (IT) has become one of the critical issues that managers need to address with great care
There is no major difference between Profit-before-Tax and Profitafter-Tax since they both indicate the same measure of profitability
The comparative study among top five India based IT companies clearly demonstrates that while manpower increase is related to increase in profitability
Summary
Traditional business rules become obsolete and outdated and are no longer applicable. IT necessitates the establishment of new competition rules that focus more on speed, quality, productivity, efficiency and customer orientation. An analysis of profitability for some Information Technology companies .one must first decide the measure to test profitability. In the annual reports provided by various companies, there are several heads under which performance can be measured. These are: ‘Profit after Tax’ (PAT), ‘Profit before Tax (PBT) and Assets created. Of these measures, there is no major difference between Profit-before-Tax and Profitafter-Tax since they both indicate the same measure of profitability. In our present case we selected “Profit after Taxes” in case of companies in India
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