Think Flat

On 15th August, India celebrates 60 years of independence. India gained independence in 1947 as a unified nation after an intensive struggle for independence. As you probably know, India is the second-most populous country in the world with an estimated 1.19 billion people in 2006.

The Indian software industry has grown from a mere US $ 150 million in 1991-92 to a staggering US $ 39.6 billion in 2006-07. No other industry in India has notched up similar growth or had such a progressive effect on India’s economy.

Driving the industry in the future to a $60 Billion in FY09-10 target  will be the following factors:

·      an addressable global market opportunity of around US$ 300 billion

·      growth in existing businesses and new services lines

·      India’s status of “most preferred destination for global IT sourcing”

·      The country’s talent pool, top-quality management and security and quality focus

So why is this important for Global CIOs. The last 10 years in particular have seen India emerge as the favorite destination (65% share of the global offshoring market) for CIOs worldwide. CIOs who were stuck with lack of scale, talent-crunch, flexibility and high costs suddenly found an avenue for success. Most of them actually succeeded in leveraging Indian talent successfully. Most of them found freedom and independence.

Moreover, as a result, India gave birth to several successful global multinationals including Infosys ofcourse, that went on to establish a strong presence in multiple countries and established themselves as global leaders. Large Global IT Services giants in the last 10 years have suddenly discovered India as a hub for their operations as well.

While the future outlook for the Indian services industry appears bright, the sector will need to grapple with certain short- to medium-term challenges such as the appreciating rupee, paucity of “suitable, employable,” talent, infrastructure development and sustenance of a positive policy/regulatory environment. These require timely, consistent and continued effort from all stakeholders including the industry, government, and academia.

As far as the next agenda for the same CIOs: After successfully using the “value for money” wage arbitrage advantage and then making the transition from on site to off shore delivery through the perfection of high quality processes and the ability to migrate technology development and business process management to Indian centres, the third wave of success for these CIOs may well come from innovation using the global delivery model again leveraging India and other emerging economies successfully.

Cheers to 60 years of India's independence and 10 years of Global CIO's independence. Cheers to the Global Delivery Model.

Posted by Sandeep Dadlani at 02:04 PM | Permalink | Comments (5) | TrackBacks (0)

Subsequent to my earlier posts, there have been further developments in the areas of consumer payments and consumer lending that I thought I could share with you.

Amazon.com has announced its intentions to jump onto the ‘consumer payments’ bandwagon by offering payment services, like Google and Paypal, to its customers. Many online sources report that  Jeff Barr, Amazon’s executive who heads their Web Services Group apparently wrote in a company blog last week, ‘Since we've been processing payments for over 10 years, we have a really good understanding of the cost and fee structures which are associated with each type of payment method.’

I reiterate what I had opined in my earlier post – that companies like Amazon, Paypal and Google will become the primary owners of the retail customer and quite literally, of the customer’s wallet! And my prediction is that Amazon will develop a robust web services platform for processing payments and establish that as a salient infrastructure foundation in the transaction processing arena - like it successfully institutionalized the virtual shopping mall concept for other Retailers to display products, ranging from apparel to electronics! Further, going by the theme of Sandeep Dadlani’s recent post, Amazon is fast evolving from being a B2C play to a true ‘B2X’ play! It will effectively leverage the best practices and its core experience of delighting customers like you and me, to offer cost effective transaction solutions for businesses – and lead the Web 2.0 revolution in the B2B space. Obviously, Amazon’s clout in the Retail consumer market has helped in offering better alternatives in the ‘wholesale’ payments area, currently dominated by MasterCard, Visa and the large Banks.

On a related note, there have been a few comments to my earlier posts, decrying the excessive focus on innovation in service delivery as opposed to service creation. While I agree in some part to that point of view, I also believe that in a Flat World, execution excellence is what will differentiate the winners from the also-rans; and execution excellence is about delivering not-so-innovative concepts in a rapidly scalable and cost effective manner to the market. Paying for purchases is not necessarily an innovative area; but bringing in efficiencies to offer superior ‘one-click’ experience at better cost structures is something that has changed the way the world shops! And the capabilities to execute on such initiatives are not necessarily born out of 'legacy' retailing or banking experience, but from a better understanding of how customers behave and the ability to model their adoption of newer technologies.

The other update on innovations in consumer lending (Read my older posts here): Prosper.com announced last week that it will take its peer-to-peer lending model to Japan through a joint venture with a local financial services firm (I could not find the original press release on Prosper’s website, but here is a related report). This follows Zopa.com, another UK based peer-to-peer site, announcing its US foray and UK’s Virgin Group investing in an emerging US peer-to-peer lending site. In the context of the ongoing happenings in the global credit market, it is interesting to see that on the one hand, while Central Banks across countries are challenged to walk the delicate path of restoring order to the financial system, peer-to-peer lending sites are quietly expanding their reach! I am not attempting to strike a comparison, given the magnitude of the larger global crisis, yet, I strongly feel that peer-to-peer sites offer a lesson to those clamoring for safety-nets to irresponsible lending (and borrowing) behavior!

Posted by Balaji Yellavalli at 05:13 PM | Permalink | Comments (3) | TrackBacks (0)

 

A lot has been said and written about Web 2.0 and uniquely defining the consumer experience on the web. Most of us have read and experienced Web 2.0 features at several consumer websites. The last two CIOs I met had unique challenges relating to Web 2.0 which I thought should be shared with this audience.

The first CIO belongs to a B2B distribution company. Corporate customers log on to a secure website and place orders for several items/services while this company delivers those items and servies through a fantastic distribution network across North America. The strength of this company traditionally has been its distribution network. Recently they launched a program to overhaul their B2B ordering site to make it more feature-rich. But as they tried to understand the features they needed, they encountered an identity crisis. They were selling to corporate customers, buyers stationed all over the globe who had the authority to purchase products for their corporation. Should this B2B company start using B2C features on their website? Should they put in cool Web 2.0 features, build social communities, blogs, product comment features,etc…the kind you see on popular sites like Amazon and others. Should they offer a free itunes download with each purchase? What are the implications? If they do offer these features, can they open up their business to retail consumers? Who should they really try to be?

The second CIO belongs to a successful retail company that also runs a good B2B distribution business with the same products. This company is also struggling to see how Web 2.0 features can improve both their retail business and their B2B business. They are figuring out how to use cool Web 2.0 features to help their business customers personalize and configure their product purchases on the web…and then use the same platform in the store for consumers that walk into their store. Cool functionalities being considered include drag-n-drop product configurators, virtual rooms, touch-screen kiosks for the stores with I-phone like finger-touch functionality. The interesting trend here is that the Web and specifically Web 2.0 is breaking old business models and challenging companies to rethink their identities, what they want to be and who they want to sell to. B2C and B2B consumer experiences are converging into a fairly consistent expectation of consumer experience. Internal organization structures are hence being challenged and broken down more rapidly than ever. The converged multi-channel B2X organization is soon arriving if it has not already arrived. The CIO is in the middle of this revolutionary storm and has to think of all the questions and most of the answers.

 

 

Posted by Sandeep Dadlani at 06:01 PM | Permalink | Comments (2) | TrackBacks (0)