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August 28, 2014

Connecting Digitally: Let Us Count The (New) Ways

Posted by Amitabh Mudaliar (View Profile | View All Posts) at 5:29 AM

Biz Stone: Twitter's Lessons Help Spread Jelly [Source: https://www.youtube.com/watch?v=3OXQXJ_UulE]

Twitter's co-founder Biz Stone is working on a new project - a search engine called Jelly. Part of Stone's reasoning is that the basic way we get answers to our online queries hasn't changed that much in the past 15 years or so. You type something into the search engine, hit return, and view the list of suggested matches. That's an eternity in digital time.

So what will be different about Jelly? Well, Stone says that he's envisioning what the world has become - a very tight conglomeration of digital consumers who are in close contact with each other. Now imagine taking all the 'stuff' from all of your social media networking - the photos and the maps and the messages and the locations - and combining it all to create a mega-social network.

When you ask that mega-network a question, it's using everything at its disposal instead of the way search engines used to operate long before there were social media sites. Instead of making friends on a popular social media site, maybe there are people who are as curious about certain aspects of the world as you are but outside your social network. By the nature of your queries, you're connected to these people because they have the expert answers. So your search becomes more efficient and less social.

Essentially, we as digital consumers are rewriting the book on what a network is and what its strengths are. And because of that, entrepreneurs like Stone are coming up with more optimal ways of tapping into these networks.

One of the digital companies that appears to understand this new paradigm is Alibaba. I'm watching its expansion very closely because the way it does things is different from any other web retailer. It might provide tantalizing clues as to the future of digital commerce. Its initial public offering in the United States is scheduled for sometime in the near future and is rumored by Wall Street analysts to have the potential of surpassing Facebook's $16 billion IPO in 2012. It recently unveiled a new site aimed at its new North American audience, 11Main. Experts are abuzz wondering how 11Main fits into Alibaba's plans for expansion because a customer needs an invitation from the site to join.

Think about every other mass web retailer. All you've ever needed is some proof that you'd be able to pay for their merchandise online. Yet 11Main isn't dedicated (not yet, at least) to the prospect of a mass shopping extravaganza. Perhaps Alibaba's slow and steady unveiling of its web site for Americans is to gauge their interest by putting the ball in their court. Their movements, such as requesting an invitation from 11Main, can tell a Web retailer a lot about consumer behavior.

One analyst criticized the secretive nature of 11Main's invitation list. But I wouldn't be so quick to criticize. Remember, in former versions of web commerce, the retailer was acting solely on strong ties to appeal to consumers. Now we're entering the era in which enterprises are investing to learn about their consumer base and further align interests.

I go back to Biz Stone's neat new thing - Jelly. He said that in the first 24 hours after its launch, the site had twice the number of accounts that were created in Twitter's first year. Word of mouth, he has rightly said, used to be word of mouth. Now everything is digital with people passing information to each other in an instant.

Not surprisingly, new web retailers are also launching in new markets with methods that perplex those with a command primarily of the traditional way of doing web commerce. Any way you slice it, digital commerce is moving faster than ever before. That's why retailers need to know what kinds of questions to ask consumers in that rapidly evolving space.

August 26, 2014

New Races For New Digital Platforms

Posted by Suryaprakash K. (View Profile | View All Posts) at 6:45 AM

In conversation with Asim Warsi from Samsung India  [Source: https://www.youtube.com/watch?v=JrIiWcvMRL0]

I was thinking about the waxing and waning of the digital technology sector's often-uneasy alliances the other day.

Look at what's happening in India. It is the single-most important and untapped market for consumer technology. And because of its sheer size, even a small percentage of the population doing something (like, say, purchasing a smartphone) is the equivalent of a far larger proportion of the population of just about any other country.

So it is with intense interest, that I've been following Google's latest campaign to market its new Android One telephone in India. Experts describe the move as ambitious. Because India is a challenging and a unique market for any enterprise, even the homegrown ones. And yet, if Google can make a go of it in India, I suspect the payoff would be huge.

Here's where Google's latest foray becomes interesting. One of the company's current alliances is with Samsung - perhaps its most effective Android partner globally. But according to some reports in the business press, there are some strains rippling right under the surface when it comes to the ongoing relationship between these two tech giants. Apparently, Google's strategy in India involves partnering with local technology firms to expand in a move that could conceivably take market share away from the Korea-based Samsung.

India is part of Samsung's vast, and familiar Asian turf. That's why Google, as large a global enterprise as it is, is partnering with it to help it navigate the market's complicated waters. Nobody ever said doing business in India, especially on a grand scale, is easy.

There's yet another aspect to the Google story that absolutely fascinates me. I'm enthralled by the company's long-term business strategy because of how it is able to seemingly peer into a crystal ball and see the emerging desires and expectations of the global marketplace. Along those lines is its US $1billion purchase of Twitch. This website/service is dedicated to streaming video games of other people. There is growing talk in the tech world that just as billions of people sit in front of a television screen every evening to watch their favorite shows, in the not-so-distant future, that same kind of audience could watch other people duke it out in the video game realm.

For years, Google and Samsung have had a very lucrative alliance. Remember the ancient saying that the enemy of my enemy is my friend? Well, when you throw Apple into this three-way mix, you can see why Google and Samsung have worked well together. But with the emergence of new platforms (Twitch is only part of the mix) and new, virtually untapped markets (like India), perhaps one of those three enterprises is seeing the limits of its past alliances and is instead concentrating on forging new ones.

Sources tell me that Google plans to spend 'several hundred million (U.S.) dollars' in its promotion and marketing of Android One in India beginning this fall. My hunch is that you will start to see new battle lines formed in the quest to bring digital technology to a fresh, young market.

August 22, 2014

Cloud's Future Is About Freedom of Choice

Posted by Saju Sankaran Kutty (View Profile | View All Posts) at 11:41 AM

9 Cloud Trends for 2014 by Infosys [Source: http://www.youtube.com/watch?v=WuumIUXt8wU]

We know the old adage: Don't put all your eggs in one basket. It seems that global enterprises are overwhelmingly using this maxim when it comes to adopting a robust cloud strategy.

They are accomplishing what I like to call a cloud 'freedom of choice.' That is, first adopting the appropriate hybrid clouds for their organizations and then choosing multiple clouds among those hybrid models. Such a multi-faceted strategy is not surprising when you consider the fact that spreading your enterprise's data and operations exposure to multiple sources reduces risk and creates many lucrative business opportunities.

Beware of fragmentation, however. Imagine storing your eggs in various baskets, but the different basket owners won't let you transfer eggs between the baskets. They're cajoling you into using one, overarching Cloud service (their service, of course!). Well, that defeats the point of enjoying Cloud diversity and freedom of choice. The dangers of fragmentation are why organizations need the right Cloud Ecosystem Integrator. That way they can leverage multiple, hybrid Clouds and maintain compatibility between all of them, regardless of the Cloud provider.

What's most exciting is that we're only at the beginning of this story. Within just three years, according to analysts, hybrid clouds will emerge as the preferred model for about half of all large companies. That prediction comes on the heels of a prominent survey that revealed three in four companies will make the hybrid strategy their core focus over the next five years. Depending on the industry and sector, corporations treat the Cloud with varying degrees of acceptance. In the realm of financial services, for example, banks want to know not only where their data exists but what other company (or companies) is sharing that space on the Cloud. The multi-tenant concern is a cultural norm among banks. Organizations in most other industries tend not to fret about with whom they're sharing a Cloud. That's why the mix-and-match nature of multiple hybrids keeps an organization's data in enough different places so that they're not wedded to one data neighborhood.

The major advantage of multiple hybrids, of course, is cost. An enterprise can address its unique needs along the entire cost-performance-risk matrix. Doing so forces vendors to remain competitive in terms of pricing and features. Organizations that once built and maintained enormous in-house data warehouses are enjoying an entirely new paradigm when Cloud vendors jockey for their business. They end up saving millions of dollars in storage costs over the long haul. Big companies actually leverage this competitive tension into the fabric of their Cloud ecosystems. Their goal is to form an architecture and environment that is always up for bids. The enterprise - and not the Cloud vendor - remains in the driver's seat. Why would any organization want to continue to deal with expensive, unwieldy, legacy data warehouses?

To be sure, plenty of challenges await organizations that are shopping around for the right Cloud combination. In the long run, make certain that these challenges play out so that your organization ends up with the most optimal Cloud set-up. For instance, as Cloud architecture becomes an intricate and fragmented network of solutions, managing this dynamic and complex environment will become one of the biggest challenges for CIOs. No longer is IT architecture governed by one comprehensive set of policies. Enterprises can use the fragmented collection of services and the distinct operational nuances that come with them to their advantage - provided, or course, that they have the right Cloud Ecosystem Integrator.

That's why so many enterprises are embracing a solution that can address the tensions between the IT and business sides and between multiple Clouds. As it stands now, there are all sorts of mandated processes that have been instituted for a traditional environment and that a company must reconfigure. As such, the business side (that is, the non-IT side) will continue to view Cloud options and challenges as being prone to entropy - or, at the very least, inefficiency.

Suppose your organization has three different applications on Salesforce.com, Amazon Web Services, and on a private cloud. Those apps should be able to avoid fragmentation issues and talk to each other, right? Companies naturally want to move seamlessly between Clouds by shifting data, workloads, and applications across different computer environments. That's why the right Cloud Ecosystem Integrator works so well. This solution balances the dynamics of multi-cloud consumption and hybrid deployment in order to create an environment that is, well, you name it: elastic, flexible, agile, interoperable, and contestable!

Moreover, a potent Integrator can de-link organizational policies and processes relating to security, management, and delivery from those of the individual Cloud service providers. Imagine creating a virtual layer that resides between your company and the Cloud so as to filter out unnecessary Cloud processes while serving up only enterprise rules to your end users. That's a lesson in efficiency. Your end users shouldn't be saddled with redundancies served up by your data host.

The tendency for any technological improvement to an already sophisticated product is to move towards complexity. It's only natural. That's why the best Cloud Ecosystem Integrators are so innovative. They simplify and streamline what matters most to an enterprise - for both the IT and the business sides. The virtual layer they create is key. First, you overcome the fragmentation issue. Plus, your organization can strip away for the end-user everything he/she doesn't need to deal with so that the result is a focus on expanding your business and saving on operational costs.

August 20, 2014

Tech Adoption: A Business Imperative for Retailers

Posted by Dinesh Bajaj (View Profile | View All Posts) at 8:42 AM

Today, retailers are seeing consumer behavior and social expectations change on a vast scale. There is a confluence of forces in the global markets that make the era in which we're living a very important one to large retailers. Forces like omni-channel retailing, ability to understand and respond to the context of each and every consumer touchpoint, and a concerted effort to revamp the information systems--have created tremendous pressure on even the savviest of companies.

Best-in-class retailers are quick to adopt processes and models that cater to the new demands of the industry. That sounds fairly straightforward. However, rapid and steady adoption of customer-focused processes is the exception in the retail industry. It's an industry that's very traditional and doesn't exactly change direction easily (art vs. science), especially when technology is involved. Too often, decisions are made on the basis of 'gut feel', competitor insights and current trends, some of which are not destined to survive another purchasing season or two. Once these investments do not yield the desired results, retailers often struggle to justify their decisions. By that time, however, it's too late and the monies are already spent.

The strategy of winning retailers is to adopt and develop more of what they're good at. They know their value proposition and are constantly honing and perfecting it. They're always asking themselves how to help improve their best practices. They want to know what generates better return on capital. In the last few years, we've seen pure-play e-commerce shift to bricks-and-mortar multi-channel commerce. Who foresaw that physical stores would become an integral part of e-commerce? This is just one big trend impacting the retail world as we speak. A lot of players in the industry have built omni-channel capabilities. But, the very best retailers are going beyond that. Initially, it was solely about buying online and picking up at the store. Now, most of the big retailers have additional capabilities and are intent on personalizing customer interactions across channels. They're asking themselves how they can take those interactions and place them into their back-end systems to add value to their supply chains.

Finally, the crème de la crème of global retailers are already experimenting with three new technologies--3D printing, the Internet of Things (IoT) and wearable devices. They're at very early stages of evolution and have great potential to impact the industry as we know it today. For example, 3D is now facing the question of how and when it will become viable for consumers to use it directly. I suspect that within three to seven years, there is going to be an enormous adoption of 3D printing. It will fundamentally affect how your customers order goods and how they're shipped as well. As for the 'IoT', it means preparing for everything to be connected on one network. Retailers are already looking for ways to interact with consumers via the IoT. A simple coffee maker or other kitchen appliances will have sensors that convey to the retailer what the consumer is preparing - and therefore what he/she might need at the store! And we've heard a lot about smart watches and Google Glass. They'll not only be connected to a network but will also enable geo-location capabilities. Retailers know that they can potentially influence the purchase of goods and services at the point of purchase.

All of this is not going to happen tomorrow, but the work must begin now. Winning retailers are putting the consumer as the focal point of how they design their new strategies and services. To stay ahead of the curve, retailers are realizing that technological innovation is no longer a choice, but a business imperative that will drive business transformation in the near future.

August 18, 2014

Is There A Driveable In Your Future?

Posted by Vikram Meghal (View Profile | View All Posts) at 12:12 PM

Driver Awareness Research Vehicle (DAR-V) | Toyota [Source: http://www.youtube.com/watch?v=IpW7KH2PJ38]

A few weeks ago, Alan Mulally retired after a stellar run as chief executive officer of the Ford Motor Company. I would imagine many CEOs who step down from such a hectic job might have golf or other forms of recreation on their minds.

Not Mulally. One of the first things he did after retiring from Ford was to join the board of directors at Google. On the surface that might not seem like an earth shattering move. Some former CEOs like it best when they're still active with other companies as directors. But his particular choice of a board was what caught my eye. Google, you might know, is intent on creating and taking to market its own driveable computer platform.

Google wasn't even associated with the automobile industry five years ago. Yet today companies such as Google and Apple have platforms for cars and one is testing its own set of wheels. Plus Google just announced Android for car just last week at its annual developers conference. These are important milestones because it's getting to the point where automakers can't even keep up with the pace of innovation in their own ecosystem!

True, it's going to be up to Tier 1 auto suppliers as well as computer enterprises to define the aftermarket. There's already a terrific automatic device that plugs into the car's OBD port and provides an app that tells everything about a driver's behavior and related analytics. It retails for about $100. But it also helps having the recently retired CEO of one of Detroit's Big Three on your board of directors. Mulally recently blogged about his new position on the Google Web site: "I look forward to working together with the Google board and management team to continue to deliver their compelling vision," he wrote.

It's clear that a good part of that "compelling vision" involves the driverless car. It's going to happen someday -- sooner than you might think. The connected car is in some ways is the basic ingredient to get us to a driverless car. The elements required for driverless automobiles are a combination of short- and long-range connectivity. The ability to sense what is around you (stop signs, parking signs) from your car's perspective. Then there's the dedicated short-range communications protocol comprised of radars and sensors.

The processing of all that data has to be real-time because driving requires split-second decisions. For example, as it stands now, data from a car conceivably travels to a cloud. Then the cloud must shoot back newly analyzed information telling the car to activate the brake pedal to avoid hitting a pedestrian. The time it took for all that data to travel back and forth would mean bad news for that pedestrian. The processing of the data needs to happen within the car for split-second, driverless maneuvers. The cloud will still be used, but for things like distance traveled and gas mileage. All this connectivity has gotten us thinking about the changing nature of the automobile and how it affects the safety of drivers and passengers. At Infosys, we figure that the same technology that makes a car a flashy Cineplex on four wheels (everything but a popcorn machine!) can be used to better protect its inhabitants. Enter Toyota's DAR-V, or Driver Awareness Research Vehicle, a concept that the world's biggest carmaker is taking to auto shows and receiving rave reviews from the press and consumers alike.

Making a connected car as safe as possible requires that we innovate with the Internet of Things (IoT) in mind. The connected car as an integral part of the IoT is an essential first step to creating an entirely new paradigm in the not-too-distant future: the driverless car. But for that to happen, safety technology that keeps drivers safe must take center stage. That's one reason why the Toyota DAR-V is so promising. Its gesture-controlled dashboard is designed to keep drivers from looking at and touching all those potentially distracting infotainment functionalities that are de rigueur for today's passengers. Perhaps the neatest feature of the DAR-V is where driveable meets wearable. Using the Pebble smartwatch that's integrated into the Android-enabled dashboard, a driver can start and stop the car, unlock doors and trunk, turn on headlamps, and even initiate a panic mode in the case of a fender-bender.

I would gather that the past couple weeks have been as important to the continuing development of the automobile as any other in the past century. A former head of Ford is working with Google. And right here at Infosys we're partnering with a host of technology and automotive firms to make the move from the connected car to the driverless car that much quicker.

August 14, 2014

Vertically Disintegrated? We Have Solutions For That.

Posted by Kumar Paramasivam (View Profile | View All Posts) at 10:09 AM

The Evolution of IT Outsourcing [Source: http://www.youtube.com/watch?v=mOF54rIIw0Q]

Today, a manufacturing firm can confidently stride across the globe, set up plants, distribution centers, storage facilities, and whatever else it wants with the utmost organizational precision. That confidence - as well as a global footprint - is rooted in the knowledge that the firm has at its disposal an endless array of great software. Whether MRPs, ERPs, demand forecasting, or logistics & supply chain management, there are endless options to ensure that the modern manufacturing company utilizes IT to enhance operations and boost margins.

Every sector and industry should be so lucky. You see, the overarching phenomenon that is offshoring or outsourcing (or whatever you'd like to call it) affects each industry differently. Whereas the aforementioned manufacturer has an IT suite that allows it to reap the efficiencies of having storehouses in Malaysia, a stamping plant in Switzerland, and a sales office in Uruguay, other sectors haven't been as successful. I'm speaking, of course, about the professional services field. Woe to the project manager whose task it is to keep a global operation running seamlessly with the most rudimentary set of IT tools.

Indeed, it's a matter of corporate culture that some sectors have benefited extensively by the colossal shift in how specialization, labor arbitrage, and skills availability are leveraged across the globe - and how others have not. The IT outsourcing/offshoring phenomenon has grown in leaps and bounds over the past three decades and has created a mammoth industry in and of itself. What followed has been the phenomenon known as 'vertical disintegration' in areas like tax preparation, engineering, medical transcription, and a slew of other services.

What's curious, of course, is the realm of professional services. Vertical disintegration, in this space, has primarily been supported by rudimentary spreadsheets and project planning software. Don't get me wrong: The right team in the right organization can accomplish quite a bit using only spreadsheets and project plans. But there's been a technological limit placed on the distributed development and delivery of professional services. If there is to be a surge in the adoption of the disintegrated model and associated growth in the volume of professional services and offshoring locations, there has to be more focused IT offerings to help enterprises go to the next level. Regulatory requirements concerning data protection and privacy will make it difficult for companies to manage service delivery with rudimentary tools.

India used to be the primary destination of choice for companies that were looking to take advantage of the so-called disintegrated model. Several other locations, including South America, Eastern Europe and the Far East have also emerged as options. A company chooses which parts of its various services get delivered from which locations, based on the availability of skills, capacity, cost, and compliance. That's why things have worked out so well for many manufacturing companies. They decide where to source components and where to have them assembled. They base their decisions on everything from lead times, shifts, factory capacity, and availability of raw materials all the way to their proximity to ports. Likewise, an integrated services company that provides a one-stop service will find that engineering can be sourced from India, design from Europe, and post-production formalities for the same from the United States.

Now imagine the plight of the program manager who is tasked with ensuring that the services are delivered on time and on budget with high quality to the client organization. How can this person exercise the right amount of visibility and control? Take the case of the person running the service delivery office out of India, Europe, or the United States. Does that employee have the ability to track the demand for various skills, assess existing capacity, and plan for requisite adjustments in staffing levels? Can you imagine a project manager or heads of the service delivery centers trying to reconcile these global issues with a spreadsheet and a project plan? Hardly. Those are tools for simpler times.

If a professional services firm is going to orchestrate a vertical disintegration on par with, say, a savvy manufacturing company, it needs a robust system with built-in workflow, collaboration, resource, demand, supply, and project management functions. I have some advice for professional services firms looking for such a system: Don't bother shopping for an 'off-the-shelf' solution. It won't be worth the time and expense. You're better off working with an enterprise that has mastered the development of high caliber software solutions that can address the complex requirements of professional services firms. Use the right tools for these times.

August 12, 2014

Business Platforms Fueled By The Internet of Things

Posted by Suryaprakash K. (View Profile | View All Posts) at 5:42 AM

Marshall Van Alstyne at Emerce eDay  [Source: https://www.youtube.com/watch?v=BBf1OorPg3Y]

Ask yourself why a product like the iPhone has been such a commercial success. Since its introduction, Apple has produced millions of them. Is it the sleek, minimalist design? Is its success because of the ability to get them in different colors or even sizes? Maybe its because they're just trendy.

Well, if your response to these questions is "none of the above," then you're thinking like a true innovator. And I suspect you're going to be quite comfortable in the global economy that will exist in, say, five or 10 years from now. The answer I'm looking for is that the iPhone has been wildly successful because it created its own platform economy.

I was recently reading about a brilliant economist who is making the distinction between traditional "product" companies and innovative "platform" companies. The latter are good at facilitating networks that use an item for any number of innovative uses. This particular economist pointed out that when Apple introduced the iPhone, the company wasn't doing so with the sole intention of allowing millions of people to develop really neat apps for it. But the company did allow that platform to evolve - and now it receives a nice income from those apps in its apps store.

Other companies that produce nice, easy-to-use products should emulate what a company like Apple has done; that is, be thinking of ways of creating communities around their products. That's why the Internet of Things is going to be so huge. It's not just the fact that "stuff" will be connected to other "stuff" via the Internet. It's what people - or, more precisely, communities or networks of people - decide how to leverage that stuff.

Think of it this way: About a century ago, a man named Henry Ford produced a reasonably priced, well-built automobile when just about everyone in society was walking or riding around on horseback. There were some networks of people who knew the car's engine ran on a derivative of oil. Others realized that the car would do better on paved roads than dirt paths. Still other communities - bankers - designed financial products called car loans. And don't forget the insurance companies who rightly predicted that accidents would happen when enough cars started taking to the roads.

Those networks not only made the automobile wildly popular, but they created incredibly lucrative businesses that utilized the horseless carriage. Had none of those communities sprung up around the product, there would be no platform. I gather we'd all still be riding around on horses. Without a steady supply of fuel, a huge network of fueling stations, and paved roads, you can't get very far with a car.

The same goes for what's happening today with the Internet of Things. Product companies need to begin thinking of themselves as platform companies. This is some of the innovative thinking coming from Prof. Marshall Van Alstyne, who is on a one-man mission to urge product companies to be open to the different possibilities of how their products can exist in an ultra-connected world. He mentioned a fascinating example of a lighting company that is implementing application programming interfaces (APIs) to their high-tech LED lighting. The idea is that you can create apps that make mood lighting or that track the time of day. It might be an app as simple as making a set of lights brighter if clouds roll in.

The point here is that the applications are endless. This lighting company is rightly anticipating that to be successful in a new economy that's governed by the Internet of Things, it has to do more than just manufacture and sell light bulbs. It must foster platforms on which other people and businesses can connect and create value.

We talk a lot about the business of creating value. When every gadget connects to the Internet, how will enterprises that create those gadgets be creating value? I can assure you that value will not come from the quality of the gadget alone. It will come from how those companies and connected enterprises create networks of value. Uber adds value by connecting drivers with nice, clean cars to people nearby who need a ride. It's a nice app, but the value is in how it makes connections.

Is it any wonder why the innovative online retailer based in China, Alibaba, has bought a stake in Lyft, a car service not unlike Uber? Alibaba sees value in creating yet another community: not of people who need a ride home but people who have just ordered something from its online store and want that item delivered quickly. How exciting it is to watch these networks play out. Suppose you take the same principle of drivers in available cars and apply it to people who need to get to a hospital. The health condition might not merit an ambulance, but maybe that person is elderly and/or doesn't want to get behind the wheel of his own car to get to a doctor.

Of course, I'm just thinking aloud. Maybe healthcare connectivity is going to develop in a radically different way. My point is that the possibilities of the business networks created by the IoT are endless.

August 8, 2014

A Brush With Evolving Retailers

Posted by Amitabh Mudaliar (View Profile | View All Posts) at 9:27 AM

The Alibaba I.P.O., Explained | The New York Times [Source: https://www.youtube.com/watch?v=2c1od68RiDU]

Why the sudden rush to buy The Everything Store - a great new book about one of the master innovators of our age, Jeff Bezos - the founder of Amazon.com? Well, it seems that the new CEO of another mega-retailer, Wal-Mart, is urging every top executive at his company to read the book about the founding of Amazon.com. Doug McMillon wants his colleagues to learn about the brilliant mind and business strategies of Bezos. The 47-year-old McMillon is on a one-man mission to reinvigorate Wal-Mart amidst a rapidly evolving retail industry.

When enormous, established players like Wal-Mart begin studying Web retailers like Amazon.com, it's safe to say that the retail sector is in flux. Wal-Mart had been accustomed to being so big and so influential that it moved markets. Now, with new entrants beginning to disrupt the retail space with an array of digital innovations, it seems that even Wal-Mart is back at the drawing board.

One of the most interesting aspects of Wal-Mart's reinvention is an acknowledgement that bigger isn't always better. That's another way of saying that the mega-store model that Wal-Mart perfected is experiencing some fatigue among consumers. That's why Wal-Mart's McMillon wants the company to investigate new store concepts that include - smaller, more intimate stores. That's an absolutely radical idea! Sam Walton built his retail empire by leveraging the scale of his superstores. He could undercut just about any competitor's price AND provide everything from bed linens to car batteries under one roof. In fact, in some rural communities, Wal-Mart has become the de facto town center, where people gather to eat, to socialize, to do their banking, and to shop.

The fact that Wal-Mart is acting and thinking in such nimble and savvy ways suggests that the company is intent on remaining No. 1 for a long time into the future. The store has reportedly poured half a billion dollars into a digital commerce program and has opened no less than three online fulfillment centers in Silicon Valley with 1,000 employees. Wal-Mart has adopted what it calls a dynamic pricing system that determines the prices of merchandise based on real-time consumer data as well as how digital retailers are pricing similar items. That's a winning strategy from the digital retail playbook.

If you don't think this is exciting enough, add to this situation that China's mega-retailer Alibaba is entering the North American market this year. Alibaba's online-to-offline strategy could be a huge game-changer in the North American market. It's already a success in China. If it succeeds in a new market, then it could very well give Wal-Mart an advantage of sorts. That's because Wal-Mart already has stores in every major metropolitan area across North America. Maybe, just maybe, the attention that Wal-Mart is giving its online strategy in Silicon Valley is a preemption of the Alibaba strategy. If consumers become more engaged with a re-vamped Wal-Mart Web site and can pick up products (or have them delivered) within the hour, then it could be a full-scale demonstration of the Alibaba online-to-offline model at work. Think about it: Wal-Marts are everywhere. What a customer buys online could arrive at her doorstep within a half-hour.

Here is one prediction I know will become a reality: The current scramble to dominate the retail industry - the one I've just described - will be written about in business school cases and studied for decade to come. We are in the midst of an amazing industry transformation.

August 6, 2014

Consumer-Focused Utilities? You Bet.

Posted by Ashiss K Dash (View Profile | View All Posts) at 4:31 AM

8 Utility Trends for 2014 by Infosys [Source: https://www.youtube.com/watch?v=FeaVo_UZodU]

The other day I saw a billboard that read something like this: You book your flights online, so why do you still use your telephone to order take-out food? It's a clever advertisement that challenges digital consumers to give up some of our in-grained, old-economy behavior.

Think about it: It's easier to access an online menu from your favorite corner restaurant and place your order. Everything is done over your smartphone or tablet. There's no fishing around for a paper menu in a kitchen drawer and then using your landline to call in the order. Once you place the order online, you can either pick it up or have the restaurant deliver the food.

All things are relative, which is why casual-dining restaurants appear to be light years ahead of businesses in other industries. Take, for example, the utilities industry. Only lately have most utilities been using the term "customer" to refer to the head of a household or business that pays for electricity, gas or water. In the recent past, they were known simply as "ratepayers."

How things have changed today! Utilities are intent on changing their corporate cultures and are among the latest companies to foster a customer-focused approach. This newfound emphasis on customer retention and loyalty comes as a result of decades of de-regulation and consumer advocacy. As evident in many States, Utilities will compete in three distinct areas: generation, transmission, and retail.

Depending on what line of business (or combination of businesses) your utility is in, you might be facing stiff competition from other firms. This free-market atmosphere means that utilities in many parts of the world are now fighting to retain and attract new customers. And that's a good thing for everyone. Competition is raising the bar in terms of corporate development, customer service, flexibility and pricing.

One of my colleagues in the retail & consumer packaged goods practice at Infosys is known to lend his expertise to executives in, of all places, the financial services sector. Banks want to tap into his insights as to how best to focus on customers and learn about what we at Infosys like to refer to as the Consumer Genome. Like commercial banks, Utilities are becoming just as aware of how critically important customers are to their future success and viability. Pioneer powerhouses (excuse the pun - I couldn't help myself) such as Duke Energy and Northeast Utilities now have executives who are essentially Chief Customer Officers.

I recently came across a report in a trade magazine that features some of the best practices of North America's consumer-focused Utilities. Just as my colleague in the retail practice lets banks know how to structure their organizations around digitally savvy customers, so, too, are utilities taking a page from the retail playbook. Case in point: One of the utilities that was featured has the ability to send its customers a text message when they have been "bumped up" into a higher rate structure. That might mean a household that is using a lot of air conditioning during a heat wave. The idea is that the customer will know that she is now using a lot more electricity and will be billed for it. That text message is a heads-up. The customer might choose to tone down her air conditioning so that she remains in a lower rate structure. In either case, there are no surprises when she receives the monthly electric bill.

Even the concept of a monthly bill is changing. Some utilities are open to sending their customers updates during the middle of the month in order to give them a general idea of what their power use will be over the course of the entire billing period. Here's my favorite feature: Some companies are letting you know how your energy use compares to that of your neighbors. There's nothing quite like the concept of what economists refer to as "anchoring." If you know the houses on either side of your house are using half the energy you do, chances are you're going to lower your use to fall more in line with your peers.

From my office base in southern California, I've been able to witness firsthand the radical transformation of American utilities, a century-old industry. Given Infosys' focus on Utilities globally, I can compare and contrast the ageing infrastructure in America with, say, areas of south Asia where demand for power is growing in leaps and bounds - so rapid that they can barely build a brand new infrastructure to keep up with the demand. But no matter where there is a need for electricity, you can bet that utilities have turned a corner in their own development. Globally they are now hiring people with social media, analytics and customer service skills. They know that the coming century is all about the customer who consumes their product and likes to interact with them.

And why not? If I can track a package I've shipped in real time and can perform my personal banking with my smartphone, I should be able to expect a similar level of customer service from the company that's providing my business and my home with the most essentials of my household - electricity, gas or water!

August 4, 2014

Tired Old Branches Vs. Cool Technology

Posted by Rajashekara V. Maiya (View Profile | View All Posts) at 7:43 AM

Rise of online banking sees decline of physical bank branches in the UK [Source: https://www.youtube.com/watch?v=6c8nLrJaEXU]

It doesn't take a veteran banking analyst to predict the winner of the contest described in this column's title. Commercial banks, especially in the West, are saddled with a lot of real estate. Their branches are vestiges of how customers connected to their banks in the old days. They would stand in line and wait (and wait and wait) to speak with a teller who was behind a foot of bulletproof glass.

I, for one, am not lamenting the waning of the commercial bank branch. Given that the alternative is a lot of cool technology, more bank branches are going to be gone with the wind and few, if any, customers are going to take notice. They'll be too busy using their tablets and smartphones to open accounts, make deposits, wire cash, and apply for loans. Don't take my word for it. The chief executive officer of one of the world's largest financial services institutions, Bank of America, recently predicted that more physical branches would be closing under BofA's brand name because customers are realizing they carry a bank branch in their pockets.

According to Juniper Research, we're about to encounter a global explosion of online banking. In just five years from now, about one-third of the planet's adult population will conduct their personal banking over their mobile devices. Less than half that amount do so today.

Sometimes necessity is the mother of invention. A low interest rate environment is currently squeezing banks where it hurts. So they're looking for ways to streamline how they do business. The other main way they make money is to charge fees for various services. But customers have grown weary of what some see as an endless barrage of fees just for having an account with a particular bank. So if a bank keeps its overhead low by maintaining as few branches as possible and introduces more ways to bank electronically, you're going to see a rise in customer satisfaction.

The banks that are leading the way tend to be in the emerging markets. For whatever reason - and I can think of several - Western banks have enjoyed the status quo of maintaining plenty of physical branches. One of the reasons the West has lagged behind in the electronic banking revolution is that having physical real estate in every community used to be a sign of prestige and trustworthiness. You wanted to know your local bankers in the same way you got to know your barber or your grocer. But global banks swallowed up all the local firms, so there isn't a compelling reason anymore to have a branch on every street corner.

The bank customer has also changed habits, thanks mostly to the influences of other sectors. Because retail has been so out in front of digital commerce, consumers expect other institutions to be as well. Then there's legacy technology. Western banks have a lot of it, so turning on a dime isn't as easy as you'd think. It's one reason why the most nimble banks are not in the West - their customers can communicate with them on their mobile telephones. And then use those phones to conduct basic banking services as well.

Of course, banks are still wrestling with what other businesses do every day: whether, for example, to offer app versions of web services. And trying to determine the security risks associated with offering such services. Digital might become the undisputed king of banking, but it doesn't mean organizations have worked out all of the security risks so far.

Still, you're probably going to see bank executives point more of their organizations' equity towards technology development than you will finding high-traffic spots for new branches. Cool technology is how financial services firms will distinguish themselves in the same way banks used the physical convenience of multiple branches to outdo smaller rivals.

August 1, 2014

The Great Divide: Myth or Reality?

Posted by Aruna C. Newton (View Profile | View All Posts) at 7:47 AM

Indra Nooyi says that women cannot have it all [Source: http://www.youtube.com/watch?v=h8yi5Cz2oH4]

Being a passionate professional, driving woman's leadership and empowerment, I am deeply interested in gender studies and movements. Did you know that India has 614.4 million women, which is roughly about 8.77% of the world's population and 300 million more people than the entire population of the United States of America! And, as a country, we have been ranked 101 out of 136 countries in the 2013 World Economic Forum (WEF) Global Gender Gap Report, which benchmarks national gender gaps on economic, political, education and health-based criteria.

According to a study titled 'Women in America - Indicators of Social and Economic Well-Being' by the US Department of Commerce, Economics and Statistics Administration in 2009, only 7 percent of female professionals in the country were employed in the relatively high paying computer ($1,253 median weekly earnings) and engineering ($1,266 median weekly earnings) fields, compared to 38 percent of male professionals. In 2009, nearly one-fifth of all women were employed in just five occupations: secretaries, registered nurses, elementary school teachers, cashiers, and nursing aides. The US ranks 23rd in the 2013 WEF report. Norway, which was ranks 4th in the same report, widely adopts an approach of Gender Mainstreaming that calls for the integration of gender perspectives into all stages of policy and processes − design, implementation, monitoring and evaluation − from government to private enterprises.

A company is only a microcosm of a larger social entity, and suddenly it is not so difficult to believe these telling statistics.

It was my fifth conference on the subject of diversity and inclusion. Predictably, the session started with 'sharing of best practices' which ran to "we know what our women need, so we have policies like flexi work hours, crèches/day care facilities, and many leadership programs for women, some of which are even facilitated by men!" Needless to say, this was followed by a round of applause!  In my opinion, this is a classic case of managing the over-representation at the bottom and under-representation at the top. In my opinion, there are two ways to compare different companies' gender equality policies. You could look at the number of women reaching positions of power, or you could look at 'current' policies. The two don't necessarily tell the same story.

Going back to the conference. Not to be outdone, a young lady from another organization got up and said, "We have a unique mentoring program for women.  In this program, women learn a skill they don't do very well--networking!" Another young lady from the audience stood up and said indignantly: "Are you suggesting that we start smoking and drinking to become part of the men's club? After all, all decisions of importance are taken in 'Smoking Zones' or over drinks in the evening!" There was a collective gasp from the audience who was predominantly women.

In truth, these conferences tell women what they already know.Well, there is nothing wrong with all these conversations. They represent a maturity of the journey that women have undertaken over the decades. Some resigned to their fate, others chafing at the bit and a few continuing, their energy unchecked.

Indra Nooyi, in a recent and candid interview said, "I don't think women can have it all." And suddenly there was food for debate! Or Sheryl Sandberg in Lean In said, among other things, 'don't leave before you leave' and don't get bogged down by 'the myth of doing it all' - and became an instant celebrity. As Polonius in Hamlet remarked, "Though this be madness, yet there is method in it."

In the world, today, more and more women are getting an education and opting for professional courses. It is no co-incidence that in an industry like ours about 55 percent or more of our new graduate hires are women. But, after that auspicious start, the numbers dwindle down quickly to about 25 percent for personal reasons like getting married or having a baby. More than 50 percent of these employees don't come back to work, ever! Now, that's a real shame.

What's not being studied enough is the speed at which the 25 percent that remains, dwindles to single digits in a couple of years and finally vanishes from the horizon, so that at senior management levels, you can actually count them on the fingers of one hand! And therein lies the problem.

Recent studies suggest women don't negotiate their salaries as hard as men do and maybe also their job roles (positions). An article in The Wall Street Journal in September 2013 suggests that women earned 76.5 cents for every dollar that men did last year, moving no closer to narrowing a gender pay gap that has barely budged in almost a decade. The Centre for American Progress in an article titled, 'Top 10 Facts about the Wage Gap' contends that if progress continues at the current rate, it will take 45 years to eradicate the wage gap. Over a 40-year working career, the average woman loses $431,000 as the result of the wage gap. What's even more intriguing is the observation that more than 40 percent of the wage gap cannot be explained by occupation, work experience, race, or union membership!

Well, these facts aside, I firmly believe that women are trying too hard. Trying too hard to get into male-dominated bastions, training ourselves to cope with it through building those 'otherwise deficient skills' and if that does not work, training men to cope with us under the label of 'sensitivity.'

Stop changing the rules! It's clearly time to change the game. I've often wondered what if women said they were not keen to engage with today's corporations but would work only if they got what they wanted on their terms. And the industry would try everything they could think of to get them on board!

If education drives economic growth and social development, the day is not far when women will be in the driver's seat. What do you think?

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