Hence it is very interesting to see that Apple the maker of cool tech products, has a whopping 35% of the profits made in the PC industry, while it takes only 7% of the share of revenues! Now Apple is also seen as a company that appeals to people's sense of vanity!
Showing posts with label Business. Show all posts
Showing posts with label Business. Show all posts
Mar 24, 2010
Revenue vs Profit = Vanity vs Sanity
Someone somewhere said, "Revenue is vanity, Profit is sanity". So true for any company, small or big. I am a keen follower of this conversation at various places.
Sep 21, 2008
"Go Kiss The World"
Two books in a month is fast reading when compared to my regular pace. It also means that my regular spend on money is actually yielding some returns.The latest book i managed to finish is another biography, written in a friendly and fast pace. In 'Go Kiss the World', Subroto Bagchi writes about his life, what has shaped him and shares several useful nuggets for any young person.
Several things about Subroto and his book immediately struck a chord as i share the same background or context. I too spent most of teen years in Orissa, changed four schools and loved the experience. The open spaces at our township in Paradip, my schooling at Kendriya Vidyalaya, the library that exposed me to great English novels which eventually helped me crack b-school exams with ease. I have sometimes wondered if that was a blessing or a curse since I was not exposed to enough competition that led to spectacular failures in competitive exams right after my Class XII. Fortunately things turned for the better once a stint in big city academia and the ruthless competition there exposed all my weaknesses. I think most people who grow up in small towns indulge in this self doubt.
Bagchi admits that he was not cut out for a military career and though he was selected as the best NCC Cadet in the country, stayed away from it. He was fortunate to get some frank advice from a military person he later calls an angel. Later his first job was as a Lower Division Clerk (LDC) in the Orissa government. If not for some perhaps misplaced overconfidence, I too would have ended up as an LDC in my first job. After my own experimentation with a military career, one of my relatives was keen that I take up some job and sent me several application forms for exams conducted by the government for selection into LDC positions. I promptly said No, though at that time i was not aware of what i would end up doing. I had no angel like Bagchi's when I was teenager and ended up wasting a couple of years of my academic career! But I found my angel later in final year of graduation (one Capt. Parthibhan of Pentafour Software in 1995), and this man who had then just returned from Singapore pointed me in the right direction. The book underscores the need to find good mentors and also be available to others as a mentor.
On a TV interview I happened to see while reading this book, Bagchi answered to a question, that one company that he really admires is Infosys. He calls Infosys an institution and not just a company. Building a company is not a big deal, but building an institution is! I couldn't agree less having seen this company for quite some time now.
One of the things I liked is the perspective of a career spanning thirty or forty years and not a few years or the current job. I found myself giving similar advice to a group of youngsters couple of days ago! He also debunks the romantic myth several IT professionals hold about early retirement; I take that as a timely advice. I really wish I had read a book like this before I started my career - could have done a few things differently.
Aug 4, 2007
Business of Law In India
As the Indian economy integrates more and more with the global economy, the demand for skills in the Legal arena is sky rocketing. I got to see this first hand yesterday.
I enrolled for a proximate education program with the NALSAR University of Law Hyderabad, one of the Top 2 Law Schools in India. The course is a PG Diploma in Internet/Cyber Law and funnily out of the 50 people who turned up, only two persons were from the IT industry - a Security Specialist from Wipro (who was also a lawyer) and myself. There was a third person, a lady who just completed her MCA and took the course because her husband was in Law; so I wouldn't count her. There were a considerable number of women in the group, about 40% - a reflection of the growing presence of women in Indian academia and soon industry too!
Coming to the point, a law graduate may earn Rs 5000 per month in Hyderabad at the entry level and perhaps upto Rs 25000 per month in a place like Delhi which is the legal capital (being the political capital) of India. Graduates are choosing between a cushy private sector job in non-litigation vs. the rough and tumble of litigation in courts, which pays less (numbers mentioned before) but hones the person much better for the long term. A litigation expert will go on to then earn huge sums once he is established and makes a name for himself, say Rs 2.5 million for a mere appearance in the court. Corporate jobs on the other hand pay more in the beginning but the career path usually hits a glass ceiling. Now in the US that need not be the case, there are several corporates especially in Insurance Industry where lawyers have gone on to become CEOs.
India is catching up in the legal space now and both the academia and industry are abuzz now with all the growth. Number wise, we still have a long way: 1 judge per 180 people (US has 1 per 30 and Europe 1 per 60); it still take 3-5 years for a case to settle (8 months in US and 18 months in Europe).
I enrolled for a proximate education program with the NALSAR University of Law Hyderabad, one of the Top 2 Law Schools in India. The course is a PG Diploma in Internet/Cyber Law and funnily out of the 50 people who turned up, only two persons were from the IT industry - a Security Specialist from Wipro (who was also a lawyer) and myself. There was a third person, a lady who just completed her MCA and took the course because her husband was in Law; so I wouldn't count her. There were a considerable number of women in the group, about 40% - a reflection of the growing presence of women in Indian academia and soon industry too!
Coming to the point, a law graduate may earn Rs 5000 per month in Hyderabad at the entry level and perhaps upto Rs 25000 per month in a place like Delhi which is the legal capital (being the political capital) of India. Graduates are choosing between a cushy private sector job in non-litigation vs. the rough and tumble of litigation in courts, which pays less (numbers mentioned before) but hones the person much better for the long term. A litigation expert will go on to then earn huge sums once he is established and makes a name for himself, say Rs 2.5 million for a mere appearance in the court. Corporate jobs on the other hand pay more in the beginning but the career path usually hits a glass ceiling. Now in the US that need not be the case, there are several corporates especially in Insurance Industry where lawyers have gone on to become CEOs.
India is catching up in the legal space now and both the academia and industry are abuzz now with all the growth. Number wise, we still have a long way: 1 judge per 180 people (US has 1 per 30 and Europe 1 per 60); it still take 3-5 years for a case to settle (8 months in US and 18 months in Europe).
May 6, 2007
SEZ Land Travails & Opportunity Cost
There is a heated debate going on in India about securing land for industry. There are those who really need land for setting up an industry, and there are also allegations that some are grabbing land in the name of industry. Business Today had a good piece on this in their latest issue. I have no comments yet on how much land an industry really needs. However I will hold as in an earlier post that we need to kick start large scale manufacturing that can employ millions. If a 50 sq km patch of land with no red tape and hassles lets us have it, then so be it!
What is more important is to understand the massive opportunity cost involved in these humongous delays the government is creating in closing the SEZ decision. We are losing crores of rupees by the hour and I am not exaggerating. Taking an example, Times of India reports that Infosys is being shown an alternate site for a new campus at Hyderabad; this is an year after they were originally allotted land at a site near the new International airport, but the government bungled big time and did not close the decision quickly. It is also reported that this new campus will accommodate 25,000 employees. Now a typical IT Services major can generate at least Rs 2500 crores revenues on such a base (being conservative). Take into account the multiplier effects, that is 100,000 more downstream jobs in the economy delayed by an year! Sheer profits wise that is at least Rs 500 crores in an year. The opportunity cost is criminal, which our politicians will not understand. They will be only too happy to take small time bribes to facilitate decision of much lesser consequence.
What is more important is to understand the massive opportunity cost involved in these humongous delays the government is creating in closing the SEZ decision. We are losing crores of rupees by the hour and I am not exaggerating. Taking an example, Times of India reports that Infosys is being shown an alternate site for a new campus at Hyderabad; this is an year after they were originally allotted land at a site near the new International airport, but the government bungled big time and did not close the decision quickly. It is also reported that this new campus will accommodate 25,000 employees. Now a typical IT Services major can generate at least Rs 2500 crores revenues on such a base (being conservative). Take into account the multiplier effects, that is 100,000 more downstream jobs in the economy delayed by an year! Sheer profits wise that is at least Rs 500 crores in an year. The opportunity cost is criminal, which our politicians will not understand. They will be only too happy to take small time bribes to facilitate decision of much lesser consequence.
Apr 6, 2007
Pre-Emptive Billing = Extortion
After the first sensual appeal of a new glittering car, everything financial about it after the purchase is murky. Have you ever dealt with a used car salesman or a glib car mechanic? We all know how much of a rip-off these encounters are.
Yesterday I gave my car for servicing to Malik Motors, a dealer for Tata Motors at Tolichowki, Hyderabad. Obviously they offered all sorts of additional services beyond the basic oil check, fluid refills. And after servicing the car billed me a fuel performance product without even checking with me, the customer. They just assumed that I will buy it given its touted benefits since it just cost another two hundred rupees. Now rolling back that transaction in their billing systems took them another 30 minutes when I was really hard pressed for time. The added assumption here was given the difficulty of reversing the transaction, the customer would meekly accept it and fork the additional money.
Yesterday I gave my car for servicing to Malik Motors, a dealer for Tata Motors at Tolichowki, Hyderabad. Obviously they offered all sorts of additional services beyond the basic oil check, fluid refills. And after servicing the car billed me a fuel performance product without even checking with me, the customer. They just assumed that I will buy it given its touted benefits since it just cost another two hundred rupees. Now rolling back that transaction in their billing systems took them another 30 minutes when I was really hard pressed for time. The added assumption here was given the difficulty of reversing the transaction, the customer would meekly accept it and fork the additional money.
I noticed they were using a sophisticated real time customer relationship system deployed by Tata Motors to track the history of each car that has ever rolled of its stable. However the aggressive and preemptive billing behaviour was anything but sophisticated. There is a thick line dividing proactive customer service and extortion. Too bad they found it an easy jump across.
ps: This happens to be my first post from a mobile phone (edited later on Blogger)Apr 1, 2007
IT Services Or IT Products Or Something Else?
There is an interesting debate going on a couple of blogs about what India needs most today to power economic growth. Is it IT Services Or IT Products? Which one should the enlightened pursue harder and which has the potential to contribute better to economic growth? Sramana argues for products while Basab defends the IT Services story.
It is now a well established fact that the downstream impact of the IT-ITES industry on the Indian economy is manifold. NASSCOM recently released the results of its study on the multiplier effects. Here is a quote from the indianeconomy blog:
While the case for IT products is also undeniable, India first needs more of labor intensive industries, preferably the manufacturing types that employ low skilled labor more than it needs IT products. That alone will establish a large industry base that when maturing will generate demand for IT products - yes, you need to first serve local markets before taking on global ones like every successful product major. Look at who the successful Indian companies are buying IT products from? If you take the case of India's incredibly successful telecom sector as an example, most of the top players (Bharti Airtel, Idea, Hutch Essar) have engaged IBM for its products and platforms (services too).
In addition to the direct contribution to GDP a manufacturing base will also generate demand for Indian IT products. Most companies often cited (the likes of Microsoft, Nokia) catered to local markets first before going global and increasing their revenues per employee (Microsoft is more than half a million per employee and Nokia is closer to a million per employee). A solid manufacturing industry base will also guarantee that more low skilled people will get lifted out of poverty and thus ensure political stability leading to continued reform which will in turn create the right ecosystem for generating Intellectual Property. Today's well known constraints that inhibit this include a hamstrung archaic labour laws, VC ecosystem, overloaded judiciary etc.
Once you have sufficient milk in the vessel, churn will automatically happen to produce cream! As Indian industry matures, IT product companies that cater to them will mushroom and then blossom to take on the world! So let us first help by pushing the Indian establishment to organise reforms that spur low skill intensive manufacturing. Products will take care of themselves.
It is now a well established fact that the downstream impact of the IT-ITES industry on the Indian economy is manifold. NASSCOM recently released the results of its study on the multiplier effects. Here is a quote from the indianeconomy blog:
* For 1 job created in IT-ITES, 4 jobs are created in rest of the economy
* Re 1 spent on OPEX generates additional output of Rs 0.9 (Multiplier 1.9x). Re 1 spent on CAPEX generated additional output Re 1 (Multiplier 2x)
* Re 1 spent by IT-ITES professionals generates additional output of Rs 1.1 (Multiplier 2.1x)
* In terms of potential impact on the economy by 2010, total economic output could be as high as $120 billion, while jobs created (direct+indirect) could cross 115 million
While the case for IT products is also undeniable, India first needs more of labor intensive industries, preferably the manufacturing types that employ low skilled labor more than it needs IT products. That alone will establish a large industry base that when maturing will generate demand for IT products - yes, you need to first serve local markets before taking on global ones like every successful product major. Look at who the successful Indian companies are buying IT products from? If you take the case of India's incredibly successful telecom sector as an example, most of the top players (Bharti Airtel, Idea, Hutch Essar) have engaged IBM for its products and platforms (services too).
In addition to the direct contribution to GDP a manufacturing base will also generate demand for Indian IT products. Most companies often cited (the likes of Microsoft, Nokia) catered to local markets first before going global and increasing their revenues per employee (Microsoft is more than half a million per employee and Nokia is closer to a million per employee). A solid manufacturing industry base will also guarantee that more low skilled people will get lifted out of poverty and thus ensure political stability leading to continued reform which will in turn create the right ecosystem for generating Intellectual Property. Today's well known constraints that inhibit this include a hamstrung archaic labour laws, VC ecosystem, overloaded judiciary etc.
Once you have sufficient milk in the vessel, churn will automatically happen to produce cream! As Indian industry matures, IT product companies that cater to them will mushroom and then blossom to take on the world! So let us first help by pushing the Indian establishment to organise reforms that spur low skill intensive manufacturing. Products will take care of themselves.
Mar 31, 2007
"Guru Is A Sh** Film"
'Dhirubhaism' a book on the late Dhirubhai Ambani (founder of the Reliance group) authored by AG Krishnamurthy (founder of Mudra Communications) has been recently released. Mukesh Ambani provides a foreword. The book is a short swift read and is excellent value for money.
Crossword a leading bookstore hosted the author for a talk on the book today evening at Hyderabad's City Centre Mall. The author spoke in glowing terms about Dhirubhai, his vision, audacity to dream big etc. The book may not be voluminous but it has fifteen short and simple chapters each explaining Dhirubhai's remarkable work philosophy in fifteen bullets ('Roll up your sleeves to help', 'Think Big', 'Change your orbit constantly' etc).
To a question on whether the movie Guru really reflected Dhirubhai's life, the simple answer from the author was: "Guru is a sh*t film". RK Narayan the celebrated author also had similar feelings about the film version of his successful book 'The Guide'. Now both Guru and Guide were reasonably big hits at the box office. Wonder what happens when an original work gets crafted into a film version aiming to appeal for the masses.
Crossword a leading bookstore hosted the author for a talk on the book today evening at Hyderabad's City Centre Mall. The author spoke in glowing terms about Dhirubhai, his vision, audacity to dream big etc. The book may not be voluminous but it has fifteen short and simple chapters each explaining Dhirubhai's remarkable work philosophy in fifteen bullets ('Roll up your sleeves to help', 'Think Big', 'Change your orbit constantly' etc).
To a question on whether the movie Guru really reflected Dhirubhai's life, the simple answer from the author was: "Guru is a sh*t film". RK Narayan the celebrated author also had similar feelings about the film version of his successful book 'The Guide'. Now both Guru and Guide were reasonably big hits at the box office. Wonder what happens when an original work gets crafted into a film version aiming to appeal for the masses.
Mar 28, 2007
HYSEA's Technology Day
Today at the Hyderabad Software Exporter Association's Technology Day, there were a few interesting talks.
IT Services
Sudin Apte of Forrester opined about the rapidly polarising IT Service's industry. The Top 3 players are growing rapidly (40-50% CAGR) while the smaller companies are getting left behind. The rest of Top20 grew at half the Top3 rate and have profit margins in the 18-19% range compared to 24-25% of Top3. The rest outside the Top20 had margins in the 12-13% range. Three years ago the Top3 were 26% of the industry but now they are 41%. The ABN Amro deal made big news last year with TCS and Infosys winning huge chunks but it is a less known fact that six smaller Indian firms got kicked out ABN at the same time. The smaller companies look set to be vaporised by the bigger ones without even too many acquisitions owing to trends on the demand side and supply side!
The so called 'Billion Dollar babies' - companies which recently grossed $1B in annual revenues - HCL, Satyam, Cognizant will have an year ot two before they either graduate to bigger league or stagnate and lose industry position. A Tier-2 player just cannot aim to succeed by attempting to be a mini-TCS or a mini-Infosys, offering all kinds of services to a small set of clients. The IT services industry has just gotten tougher to enter and a startup cannot achieve unless it executes to a carefully nurtured niche.
Web 2.0
Ramesh Loganathan of Pramati gave an excellent post-lunch talk on Web 2.0 and later ended up giving a pitch on his companies new Web-Desktop integration offering Dekoh ('look' in Hindi). The product sounded cool but there was nether a live demo nor a canned demo. Later I checked Pramati's website and they actually have some cool Web 2.0 demos but no mention of Dekoh.
IT Services
Sudin Apte of Forrester opined about the rapidly polarising IT Service's industry. The Top 3 players are growing rapidly (40-50% CAGR) while the smaller companies are getting left behind. The rest of Top20 grew at half the Top3 rate and have profit margins in the 18-19% range compared to 24-25% of Top3. The rest outside the Top20 had margins in the 12-13% range. Three years ago the Top3 were 26% of the industry but now they are 41%. The ABN Amro deal made big news last year with TCS and Infosys winning huge chunks but it is a less known fact that six smaller Indian firms got kicked out ABN at the same time. The smaller companies look set to be vaporised by the bigger ones without even too many acquisitions owing to trends on the demand side and supply side!
The so called 'Billion Dollar babies' - companies which recently grossed $1B in annual revenues - HCL, Satyam, Cognizant will have an year ot two before they either graduate to bigger league or stagnate and lose industry position. A Tier-2 player just cannot aim to succeed by attempting to be a mini-TCS or a mini-Infosys, offering all kinds of services to a small set of clients. The IT services industry has just gotten tougher to enter and a startup cannot achieve unless it executes to a carefully nurtured niche.
Web 2.0
Ramesh Loganathan of Pramati gave an excellent post-lunch talk on Web 2.0 and later ended up giving a pitch on his companies new Web-Desktop integration offering Dekoh ('look' in Hindi). The product sounded cool but there was nether a live demo nor a canned demo. Later I checked Pramati's website and they actually have some cool Web 2.0 demos but no mention of Dekoh.
'Let a Million Markets Bloom'
IBM in collaboration with the Economic Times organised a session titled "Let a million markets bloom: How Innovation is Fuelling India’s Growth Engine” last week in Hyderabad. It was ostensibly aimed at CEOs and CIOs but the audience had just a few of them. However it was impressive to see first hand IBM continue its juggernaut in India, reinforcing its branding around the Innovation theme. No wonder IBM is snapping up huge billion dollar plus deals with Indian Telecom Companies (Bharti Airtel, Idea and now even Hutch). All this while the Indian IT service players still struggle to strike large ($100+ million dollar) deals in the global arena. And did you know that IBM shares revenues with Airtel? It is accountable for its client's business outcomes! Something that the Indian IT players are only now talking about for their Fortune 1000 customers. IBM is coming into India in a big way, building a huge Indian work force and winning Indian business.
IBM showcased its recent study on innovation trends across the globe and a speaker shared the findings which were threefold:
The subsequent panel discussion was a very good one. Sivaram Tadepalli (IT Lead for the GMR International Airport at Hyderabad) did a good job explaining how technology integrates with their business. He later explained how the new airport is rapidly getting built and was excited about the outcomes. Sangeetha Reddy of Apollo Hospitals made some good comments and IBM's India Head Nipun Mehrotra provided a good summary. So in all a good event despite the live cricket telecast they briefly showed of the India vs Srilanka match which India ultimately lost and got kicked out of the Cricket World Cup.
IBM showcased its recent study on innovation trends across the globe and a speaker shared the findings which were threefold:
- Business model innovation matters (focus on products, services, markets & operational innovation). CIOs should plan for scalability of IT to match and promote business growth.
- External collaboration is indispensable. CIOs should plan for applications which facilitate internal and external collaboration.
- Business & Technology integration is imperative.
The subsequent panel discussion was a very good one. Sivaram Tadepalli (IT Lead for the GMR International Airport at Hyderabad) did a good job explaining how technology integrates with their business. He later explained how the new airport is rapidly getting built and was excited about the outcomes. Sangeetha Reddy of Apollo Hospitals made some good comments and IBM's India Head Nipun Mehrotra provided a good summary. So in all a good event despite the live cricket telecast they briefly showed of the India vs Srilanka match which India ultimately lost and got kicked out of the Cricket World Cup.
Mar 8, 2007
Pushing Startups To The Fringes
In his latest Budget the Indian Finance Minister has proposed Fringe Benefit Tax on stock options that employees exercise starting April 1, 2007. Now it may appear a great way to collect additional taxes (assuming FBT = Marginal Tax of 33%), but the long term impact will be stifling innovation and increasing employee churn in the Indian economy. Startups will find it even more difficult to attract/retain talent with ESOPs as the net gains post exercise are diminished.
Employees with vested options are now forced to exercise them which means no more exit (quit) barriers. Though an option grant typically takes 4-5 years to vest, the total lifecycle is much longer. Vested options take another 5 years to expire which means a manager conserving cashflows will tend to stick around that much longer, almost a decade. Now a decade is a long time, and often committed managers is all that separates a stunted SME to one that really grows wings to become a bluechip. Just look at the number of 'major' IT Services companies in the early nineties, that have now fallen by the wayside.
For now, look for increased attrition at mid and senior levels across industries, rising wage inflation (employers will have to compensate for unattractive esops) and one more setback to the nascent startup-ecosystem in India. Unless the government realises the total impact and pegs FBT at a reasonable 10-12% range.
Employees with vested options are now forced to exercise them which means no more exit (quit) barriers. Though an option grant typically takes 4-5 years to vest, the total lifecycle is much longer. Vested options take another 5 years to expire which means a manager conserving cashflows will tend to stick around that much longer, almost a decade. Now a decade is a long time, and often committed managers is all that separates a stunted SME to one that really grows wings to become a bluechip. Just look at the number of 'major' IT Services companies in the early nineties, that have now fallen by the wayside.
For now, look for increased attrition at mid and senior levels across industries, rising wage inflation (employers will have to compensate for unattractive esops) and one more setback to the nascent startup-ecosystem in India. Unless the government realises the total impact and pegs FBT at a reasonable 10-12% range.
Mar 5, 2007
10x For A BlueChip Service Company
Last evening after a dinner at an upscale restaurant (part of a blue chip, publicly listed firm), I was surprised to see a line item in the final bill. Now I rarely visit a five star hotel for a personal appointment, but this was one of those rare occasions. So the matter of surprise was this - a plain bottle of mineral water, normally available in the market for Rs 10 was being charged almost Rs 100 tax included. The rest of the food was fine and I can make myself to understand value pricing and all that stuff. But 10x times for a bottle of mineral water?
Extend the argument to IT Services industry: new hires at entry level get paid an average of Rs 200,000 p.a. and given the offshore rates basically are billable at about Rs 2,000,000 (typical Tier-1 provider). So we have another 10x formula going!
Now I am not comparing fresh software engineers with mineral water bottles (some would argue both are commodities), but from a pricing standpoint we really have something going here. When you as a company, are able to charge customers 10 x times the input cost (thanks to all those intangibles), you have truly arrived as a Blue Chip!
Extend the argument to IT Services industry: new hires at entry level get paid an average of Rs 200,000 p.a. and given the offshore rates basically are billable at about Rs 2,000,000 (typical Tier-1 provider). So we have another 10x formula going!
Now I am not comparing fresh software engineers with mineral water bottles (some would argue both are commodities), but from a pricing standpoint we really have something going here. When you as a company, are able to charge customers 10 x times the input cost (thanks to all those intangibles), you have truly arrived as a Blue Chip!
Feb 22, 2007
Waiting for Orange Juice (Not From Concentrate) On Indian Retail Shelves
Ever since my R2I (Return to India for good, if you haven't heard this term before) last year, one thing I have missed is the sweet-tangy taste
of Orange Juice. It was a staple drink in those years spent in the United States. The ad of Florida's Natural OJ which showed consumers literally pulling the juice cans straight from the groves was a big hit. In the Indian context though such a pull is not easy, with the severe lack of cold storage chains connecting the farms to the marts. You will find many variants of the 'from-concentrate' OJ which do not need any refrigeration, but those I avoid. Instead I have resorted to eating orange fruits whenever I find them, but then they are seasonal.
A good development of late in India has been the opening up of retail in a big way. Reliance, Bharti-Walmart, RPG, Birlas, Tatas, you name it every big corporate house is venturing bigtime. ET reports Retail will jump from $12B today to $200B by year 2016! In most developed nations, organised retail is the economy's backbone emlpoying more people than any other industry. This is about to pickup in India with these companies making $30B worth of investments in linking the farm to the mart, triggering a new socio-economic revolution.
And now the government has just announced incentives to companies in setting up cold chains with reduced import duties, interest-sops etc. That should reduce my wait for OJ (not from concentrate) considerably!
of Orange Juice. It was a staple drink in those years spent in the United States. The ad of Florida's Natural OJ which showed consumers literally pulling the juice cans straight from the groves was a big hit. In the Indian context though such a pull is not easy, with the severe lack of cold storage chains connecting the farms to the marts. You will find many variants of the 'from-concentrate' OJ which do not need any refrigeration, but those I avoid. Instead I have resorted to eating orange fruits whenever I find them, but then they are seasonal.A good development of late in India has been the opening up of retail in a big way. Reliance, Bharti-Walmart, RPG, Birlas, Tatas, you name it every big corporate house is venturing bigtime. ET reports Retail will jump from $12B today to $200B by year 2016! In most developed nations, organised retail is the economy's backbone emlpoying more people than any other industry. This is about to pickup in India with these companies making $30B worth of investments in linking the farm to the mart, triggering a new socio-economic revolution.
And now the government has just announced incentives to companies in setting up cold chains with reduced import duties, interest-sops etc. That should reduce my wait for OJ (not from concentrate) considerably!
Jan 23, 2007
'Two Swipes And A Lunch' - Antiquated, Yet We Persist
Today on the bus to work, I was watching several young 'knowledge workers' stand in the bus for an hour, and thought, "They are all travelling tens of kilometres every day, only to converge in a place called 'office' where most will soon get buried in their own cubicles in desk work or telephone calls. After two swipes and a lunch that mark and measure this work-day, they will once again battle massive evening traffic only to reach home exhausted and frustrated. "
Doesn't this sound insane? After all it is a fully wired world now, with monthly broadband bandwidth costs approaching that of an evening's worth of fine dining. The productivity loss of two hours of a single day's commute itself could easily pay for an entire year's bandwidth and electricity costs required for 'work'.
Before the Industrial Revolution, business was accomplished in close-knit communities that used to work and live together. Industrialization in the last two centuries gave rise to factories which necessitated workers to come to the shop floor to produce goods on a massive scale. Soon by the early 20th century, optimisation techniques thanks to the likes of Alfred Sloan imposed a 'modern workplace' regimen on the shop floor, of work package - time slice monitoring and time punch. Now time punches have 'technologically advanced' to time swipes.
However today with distances having been conquered by waves of tectonic transportation and technology developments (the latest one being the Internet), this model needs to be turned on its head. Unfortunately old attitudes die hard, and this modern-corporate-commute practice owes much of its identity to the century old regime. Corporates like the power they wield over the cubicled masses, and losing it to telecommuting may not be appealing. And how can desi software service firms addicted to hourly wages prove their wage bills are right without timesheets to back them up?
The future will eventually be one where technology gets us back to the olden (golden) times where people specialise in specific skills, the change being we are now globally connected. So one can enjoy a home view in say, Araku Valley and still participate in a sophisticated global supply chain. Technology will also enable people to meet co-workers on-demand and not all-the-time. In fact most co-workers will live around each other, just like the artisan villages of the past. New business models will evolve that will set up such a collaborate-on-demand infrastructure.
Indian firms are still mired in the Industrial Age mind-set and one hears about no new thinking, except may be some startups before they don the corporate avatar. IBM has done relatively well in having 30% staff (all are not just sales guys) working remotely. Best Buy has already started on this journey with its wildly successful Results Only Work Environment (ROWE) initiative. Getting there needs conviction and maturity. Let us hope the rest of the corporate world sees the light.
Doesn't this sound insane? After all it is a fully wired world now, with monthly broadband bandwidth costs approaching that of an evening's worth of fine dining. The productivity loss of two hours of a single day's commute itself could easily pay for an entire year's bandwidth and electricity costs required for 'work'.
Before the Industrial Revolution, business was accomplished in close-knit communities that used to work and live together. Industrialization in the last two centuries gave rise to factories which necessitated workers to come to the shop floor to produce goods on a massive scale. Soon by the early 20th century, optimisation techniques thanks to the likes of Alfred Sloan imposed a 'modern workplace' regimen on the shop floor, of work package - time slice monitoring and time punch. Now time punches have 'technologically advanced' to time swipes.
However today with distances having been conquered by waves of tectonic transportation and technology developments (the latest one being the Internet), this model needs to be turned on its head. Unfortunately old attitudes die hard, and this modern-corporate-commute practice owes much of its identity to the century old regime. Corporates like the power they wield over the cubicled masses, and losing it to telecommuting may not be appealing. And how can desi software service firms addicted to hourly wages prove their wage bills are right without timesheets to back them up?
The future will eventually be one where technology gets us back to the olden (golden) times where people specialise in specific skills, the change being we are now globally connected. So one can enjoy a home view in say, Araku Valley and still participate in a sophisticated global supply chain. Technology will also enable people to meet co-workers on-demand and not all-the-time. In fact most co-workers will live around each other, just like the artisan villages of the past. New business models will evolve that will set up such a collaborate-on-demand infrastructure.
Indian firms are still mired in the Industrial Age mind-set and one hears about no new thinking, except may be some startups before they don the corporate avatar. IBM has done relatively well in having 30% staff (all are not just sales guys) working remotely. Best Buy has already started on this journey with its wildly successful Results Only Work Environment (ROWE) initiative. Getting there needs conviction and maturity. Let us hope the rest of the corporate world sees the light.
Jan 5, 2007
Linkedin Reaches Critical Mass
Linkedin the online networking site appears to be fast reaching a tipping point. In addition to growing number of users (has about 9 million members now), this Valley-Biggie-VC backed venture is also getting a lot of attention. Guy Kawasaki, wrote a good piece on his blog. I have liked and followed Guy since I read his book the 'Art of the Start' a couple of years ago. His blog reflects his thinking with its elegant design, easy to read fonts, easy-on-the-eye colors, simple layout, meaningful content and of course his witty remarks.
I have registered with Linkedin about an year ago and my network has just reached the magical number of one million people. No I don't know all the million, it just means I am directly connected to 166 people I know (colleagues, clients, classmates, friends etc) who know more people who in turn know even more. So it is a two-level connect. There is this well known saying that every person in this world is connected to another by seven links. Linkedin works on the same principle. At one point I was rapidly adding people to my network but now I am selective (Guy claims to have the largest 'pending invites' list on Linkedin). Like anything else, it is a choice of quality over quantity.
I have registered with Linkedin about an year ago and my network has just reached the magical number of one million people. No I don't know all the million, it just means I am directly connected to 166 people I know (colleagues, clients, classmates, friends etc) who know more people who in turn know even more. So it is a two-level connect. There is this well known saying that every person in this world is connected to another by seven links. Linkedin works on the same principle. At one point I was rapidly adding people to my network but now I am selective (Guy claims to have the largest 'pending invites' list on Linkedin). Like anything else, it is a choice of quality over quantity.
Dec 6, 2006
Action Item Jargon
Amusing take on the jargon we are all so used to in a day to day business setting. Thanks, Sanjay!
http://www.fatalexception.org/action_item.html
http://www.fatalexception.org/action_item.html
Dec 5, 2006
Walmart in India! Will it Succeed or Retreat?
Now Walmart is coming to India in a tie-up with Bharti, India's telecom major. It will be interesting to see how long they last (given their Germany, South Korea experiences) OR if they will be able to dominate the Indian retail market like they do in the US. Walmart statistics are always impressive (300b revenues, comparison with world GDPs, International trade figures etc).
India will be a tougher nut to crack as it is a much more diverse market than the ones where Walmart has apparently not succeeded. While huge scope for economies of efficiencies and supply chain improvements exist, same cannot be said for 'homegenising' the tastes of 1.2 billion people. Combining Walmart's worldclass backend with the knowledge of India's retail consumer which Bharti ostensibly has, will be the key to success. After all, Bharti has defined its core competency as marketing to the consumer, having outsourced the rest to third parties.
India will be a tougher nut to crack as it is a much more diverse market than the ones where Walmart has apparently not succeeded. While huge scope for economies of efficiencies and supply chain improvements exist, same cannot be said for 'homegenising' the tastes of 1.2 billion people. Combining Walmart's worldclass backend with the knowledge of India's retail consumer which Bharti ostensibly has, will be the key to success. After all, Bharti has defined its core competency as marketing to the consumer, having outsourced the rest to third parties.
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