The business world is being disrupted by the combined effects of growing emerging economies, shifts in global demographics, ubiquity of technology and accountability regulation. Infosys believes that to compete in the flat world, businesses must shift their operational priorities.

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July 30, 2008

Wi-Fi On Steroids: The “White Space” Debate

I hear a lot about the lagging broadband internet infrastructure in the United States, a byproduct of the incredible amount of ground (literally) that needs to be covered in order to provide broadband for all.  This could begin to change in the coming years if the so-called “white spaces” are opened to unlicensed broadband users, providing a free network for anyone who wants to use it. 

So what are these “white spaces?”  According to Wikipedia, white spaces are the wave length frequencies which will open up because,  “analog television broadcasts, which operate between the 54 MHZ and 698 MHZ television frequencies, are slated to cease operating per a United States digital switchover mandate in February 2009.”  Essentially, they are unused airwaves which have a number of potential uses, one of them being wi-fi broadband internet.  

In previous entries, I have touched on the ubiquity of technology being a defining attribute of a flat world.  White space broadband could help to provide literal ubiquity, blanketing the United States in broadband coverage.  This is especially important to residents of rural and suburban areas who currently are limited to dial-up internet access.

If efforts in the United States are successful, one can envision a scenario where similar white spaces around the world are opened for broadband use.  Hard to reach areas of developing nations could then afford coverage that today is just not possible to provide. 

The future of the white space spectrum will be decided by the FCC, and a political war is being waged between the backers of the unlicensed use of white space—Google, Microsoft, Intel and others—and  their opponents, a group led by the National Association of Broadcasters (NAB).  The NAB and its coalition argue that white spaces cause interference with a number of devices, including TV sets, microphones, and even medical equipment.  Currently, the FCC is testing unlicensed broadband devices to measure any interference they may create. 

If you'd like to learn more about the white space debate, check out this article from Information Week.

PC magazine details Motorola’s announcement that white space testing has been successful.

Susan Crawford blogs about Google and white spaces.

July 28, 2008

Global Innovation through Collaboration - Coke Story

In a globalized market, product/service innovation has become a strategic weapon to remain competitive. There could be many reasons behind this mammoth investment in innovations; however the drivers can be summarized as followings-

  • Survive and thrive in a fragmented market
  • Growing customer demand for individualized experience
  • Demand from emerging economies for better offerings
  • Growing competition across borders and market expectations
  • And the last and most important one is the revitalizations and recreation of a Global brand- this is where Coke’s technology driven global innovation program is a classic case worth citing.

Coke story unfolds in recent edition of Information Week (click here for the article). If we look at the success behind such massive exercise, its technology based innovation infrastructure which stands out in bringing the Coke entities across markets in sharing their product/service innovations nitty-gritty. In global competitive landscape, collaboration is the key behind any successful innovation program. With Coke’s massive technology investment in this area, it could bring following changes to the way innovation is addressed-

  • Collaboration and social networking between different markets – US market shared its product/service details with Japan, so also European countries with others. It is quite possible that a product may not work in UK, but might be accepted in Germany. This platform brought such coherence and decisioning to maximum effectiveness.
  • Joint Innovation Program- Multiple markets can take a joint innovation effort which helped reaching to conclusion faster and at a lower cost- imagine the cost had those countries brainstormed separately. And also time to market for any innovative product / service is perceptively low.
  • Co-Creating with Partners and Consumers – Technology platform not only caters to internal entities, but also brought the bottlers, distributors and the consumers to a single pedestal. This has helped Coke getting the partner & consumer perspectives to this innovation exercise. Partners also saw great value in receiving a platform where they can directly dialogue with end users at a little cost (bottlers, distributors decided to share a pie of technology cost also). At the same time, supply chain business processes got standardized to single infrastructure during this innovation drive.
  • Reenergizing the Brand- Certain products in US may have failed, but works fine in Japan and so also certain service to partners may not be good for India, but makes sense to Australia. With a single platform sharing details about each new and existing product / service, it became easy for different markets to grab initiative at no time and took them to market. What resulted then? Coke financial results have been repositioned from US dependent mind-set to global market performance. All these have definitely rejuvenated the brand Coke at adverse market sentiments in most geography.

As we speak about Coke, nothing can deter the change product innovation has brought to brand TATA in global arena, ranked 6th among the reputation leaders of the world (refer the report from Reputation Institute Global Pulse 2008). Very few will deny the role “Tata Nano” (Rs 1 Lac / USD 2500 approx), the innovative venture from Tata Motors, played in catapulting the brand recognition to this level.
 

Talking about Innovation, can’t forget to mention the new book of Prof C.K. Prahalad and Prof M.S. Krishnan called “The New Age of Innovationwhere they have reinforced on two fundamental principles for continuous business innovation – N=1: “value is based on unique, personalized experiences of consumers” & R=G: “In order to achieve N=1, organizations have to reach Global eco-system to get Resources, not necessarily own them”. Next age innovative companies will have to have above two so that a flexible, resilient business process can be built where enterprise information architecture will work in tandem with managerial competency and behavior. In order to understand more, please listen to Prof Prahalad in conversation with Business Week (Part1, Part2).
 

Being the 14th most reputed organization in the world (refer the report from Reputation Institute Global Pulse 2008), Infosys innovation program reflects most of these above points. To know more about it, read the recent presentation by Balaji Yellavalli in “The National Academies” last Sept.

 

Nice Op Ed Article by Thomas Friedman in The New York Times

To those of you who follow Tom Friedman (I am one!), here is a great article from the past weekend's New York Times, titled Texas to Tel Aviv.

Tom profiles two entrepreneurs from diverse walks of life,  who are creating sustainable business models to tap renewable sources of energy. This struck a chord with me personally as I had written about it in my November 2007 post, "The Next Big Innovation in the Automobile Industry". Nice to see that Shai Agassi's electric car venture is actually taking off!  

July 27, 2008

Me, Myself and My Shopping

The grocery industry didn’t convince the American consumer that maximum return on stimulus checks could be achieved right in the supermarket aisles," says Precima General Manager Brian Ross

He should know for his firm just published a survey of 1,948 consumers to find that while 89% shoppers continue to remain loyal to their neighborhood grocery store of choice, as many as 72 percent said they’ve made fewer trips to buy groceries in the past six months.

The problems for Grocery Retailers however may just be getting worse with what the Minneapolis Star Tribune calls "trading down" by the value conscious shopper who is

buying cheaper, generic products instead of the more expensive national brands .... also buying more items on sale, and using more coupons.

The SuperValu's Jeff Noodle speaking to the same newspaper had this to say on how his firm intends to attract the Value Conscious Shopper back to the Supermarket Aisle

the company is working more closely with food manufacturers to design innovative promotions and coupons.

So how can Retailers like SuperValu engage shoppers innovatively with promotions and coupons ?

Can technology make a difference ?

Shopper strategy consultancy TNS Magasin conducted a multi country survey on how consumers shop and how retailers can engage shoppers.

the report reveals that a majority of online consumers in every country surveyed, except Japan, believe that networked shopping will be available by 2015

And what exactly is networked shopping ?

technology will be able to monitor the products household members use, create shopping lists and even communicate with other networked devices to arrange deliveries.

But why exactly should "me" the shopper have to wait for the Networked Fridge in 2015 to improve shopping?

Is there not technology that can innovatively engage "my self" based on the knowledge of "me" and my "shopping needs" ?

There is technology but it is all online. The Pittsburgh Live had this story on how Ralph Stores had changed its coupon policy much to the annoyance of its shoppers. But there was something more interesting in the story that caught this blogger's attention.

When I read that claim I quickly went to the online grocery coupon database at my Web site, www.CouponMom.com and analyzed the coupons issued by the Los Angeles Times over the past four weeks. In fact, there were 527 grocery coupons issued in the SmartSource, RedPlum and Procter & Gamble coupon circulars over the previous four weeks. Only 13 percent of the coupons were valued at 50 cents or less. I imagine the coupon use at Ralphs reflects the coupon distribution in the major newspapers

CouponMom.com has 700,000 members and promises to cut the grocery bill by half.

What if I had the power of a CouponMom.com on demand in the super market aisle as I make my shopping decision ?

Wouldnt that be a paradigm shift ?

Well change maybe coming soon, much sooner than 2015, keep an eye on this blog.

 Also read

Are you being served ?

Curious George walks the aisle

If you stock they will come

Interchange Fees – No Small Change?!

If you ever take a road trip through the American West, you’ll notice a lot of things.  Beautiful mountains, endless prairie, and arid deserts all provide a stunning backdrop.  Enough time on the road, and you’ll eventually start to notice something else—cheaper gas if you pay with cash.

Truck stops and gas stations along major highways have something in common, they prefer cash.  Each time you swipe your credit card, your bank charges an interchange fee to the gas station’s bank.  This cost is then passed onto the gas station, and often is quite significant, relative to the overall margins the station operator makes.  The National Association of Convenience Stores estimates that credit card fees average around 10 cents a gallon and end up costing gas stations, convenience stores, truck stops and other retailers thousands of dollars a month. 

 

High gas costs, increasing consumer awareness, and a strong push by merchant coalitions brought the issue of high interchange fees to Congress.  The result:  last week the US House (of Representatives) Judiciary Committee approved the Credit Card Fair Fee Act of 2008.  The goal of the act is to provide retailers the opportunity to negotiate these fees (which are currently non-negotiable except for the largest and most powerful retailers) with credit card issuing institutions.

 

The Credit Card Fair Fee Act has yet to be voted into a law (it still has to pass through the Senate and be approved by the President), and chances are,  it may never be.  Opponents, like the American Bankers Association (ABA), have a strong belief that the current system is competitive and efficient.  Says Edward Yingling, President and Chief Executive of the ABA:

 

“[The ABA] is very disappointed that the House Judiciary Committee voted today to move forward with legislation that is anti-competitive and interferes with the smoothly functioning electronic payment system that currently works to the benefit of consumers, businesses and the broader economy.”

 

The benefits of credit cards to merchants are many - customer satisfaction, guaranteed payment, theft prevention, improved efficiency and so on - but it is obvious that the value of these benefits is up for debate.  Disruptive technologies and business models are challenging the status quo – I have written about alternative payment methods earlier (recent post on Bill Me Later and last year’s piece on Innovations in Retail banking.)

As technology becomes ever more ubiquitous, the ability to pay electronically will be a key sticking point for consumers.  Mobile payments, touch-pay systems, and other innovations will only gain traction if they offer a sustainable value proposition to all parties involved in the transaction.  The Credit Card Fair Fee Act draws attention to the issue, and hopefully the two sides will start to work towards an amicable, mutually beneficial solution to interchange fees.

For an always informative look at how the Interchange system works, visit Wikipedia. 

For thoughts on the payments sector, visit author Aneace Haddad’s blog. 

A more detailed analysis of the proposed bill is available at WashingtonWatch.com. 

To find out what else is happening in the payments world visit Payments News. 

 

July 22, 2008

Sharing Best Practice in a Flat-World....

Though each one of us understands the importance of sharing best practices in this globalized environment, very few are open and ready to bring that to task. As the gap between east and west receding & the emerging market tigers resurging, business models are converging towards a single pattern. Enterprises can't just swarm around in Americas or Europe, they have to expand world-wide to retain their top & bottom-line position and competitive advantage. As the model of operation is truely getting global and the impact of east affecting west & vice versa is visible, it is necessary for organizations to collaborate on processes which have systemic significance - that means, share your best practices. My observations in a worldwide risk management conference attainded recently has propelled me to discuss this topic at a wider horizon on a flat-world stand point.

Before I give a glimpse of my experience, let me briefly jot-down the meaning of "Best Practice" -

"Best practice is defined as the most efficient (least amount of effort) and effective (best results) way of accomplishing a task, based on repeatable procedures that have proven themselves over time for large numbers of people." (vist the wiki section for detail elaboration)

Over time, Oragnizations have taken steps to share the best practices internally to ensure efficiency and effectiveness in operation, strategy execution. However, very few would have imagined the growing need to share best practices externally to a wider audience. We may have plenty of examples on internal best practice sharing excellence (Don Higginson's blog on UPS best practice sharing story can be refered here), however I have little access to literatures on sharing in external world.

One of the prominent sectors which has been forth-right in bringing each entities within to a standard forum for sharing best practices is "Financial Services Industry" though we can't under-sight the role of regulators in this movement. Be it any business process, financial services fraternity will have world-wide forums to interact, dialogue and learn. However, one area that stands out in the bunch is risk management. It's no more the individual enterprise risk management, but the onus of each entitiy within financial community to address its risk concerns in collaboration with other members. This has been widely successful with the formation and operationalization of Basel committee (http://www.bis.org/). As observed historically, collapse of an individual financial services player creates ripple in markets world-wide (recent Bear Stearns turmoil can be envisaged here). That's the power and eminence of risk management in wider external world. As the financial services players grow their foot-print by expanding across geography, markets drivers are getting clutched geographically, sectorally- that means, it's no more Asia catches cold if US sneezes, but US gripped in fever if Asia on heat-stroke. Now that shows how important for markets in west to share best practices with east and the other way, especially when one talks about risk management in a wider horizon.

Under above observations, I was completely perplexed with my experience in this global risk management conference. The congregation was to debate and understand the future of "Buy Side Risk Management" in five years down the road. Eminent panelist, mostly CROs of top asset management firms of Wall Street, participated. When they were asked to share best practices in buy side risk management, each one of them sort of duffed the question with some vague reason. Some of the firms representing in the podium were known for their elite risk processes world-wide, however they were not ready to divulge anything. That's when I felt the tweak in my brain to understand "Why this secrecy?". I believe the following ones could be the reason:-

  • Fear Of Loosing Competitive Advantage- In this credit market turmoil, some firms have stood up to market expectations due to their superior process administration, risk management. Executives from those firms were representing the forum and they had this internal concoction that if they share best practices, competitive advantage might be marred- how ridiculous this thought in a flat-world environment.
  • Scant respect to Globalization- This is a world wide forum with representations across markets. If best practices are shared, will help entities in other geographies and that's the essence behind this forum. Looks to me that firms have embraced the impact of globalization theoritically, but have not yet internalized to process. Serious change in mind-set is required.
  • Killer of Their Own-  Global players have expanded their reach to all parts to grow their business and improve their financial numbers. If I speack on behalf of the financial services Co perspective in a globalized context, the expectations and demand from clients across region have numerous commonalities and so also the commonalities observed in market drivers. That means we are heading towards a truely global open market with minimal fundamental difference. In this background, if west won't share its best practices with east and vice versa, it's basically killing it's own family- to illustrate, Goldman in US has to be aligned to the world of Glodman in Europe or Asia in terms of process excellence, similarly markets of US should be aligned to markets beyond Atlantic. All this can be possible with both internal and external best practice sharing. By clobbering within your own nest, organizations are definitely creating a 'Hornet's Nest".

 

Tantalized By Twitter

I’m tantalized by Twitter.  Okay, I have yet to “Tweet”, but it seems like everywhere I turn I hear about the potential of Twitter and its fellow microblogging sites.  From mobile payments to micromarketing, the possibilities of the short-message based, social networking site seem endless.

Whether the many ideas thrown out about how to best utilize the power of Twitter actually come to fruition (and profitability) remains to be seen.  Even so, microblogging, and its “normal” blogging cousin, has already begun to reshape the way many companies do business.

Imagine this scenario:  Joe Microblogger goes to a local sandwich shop for lunch and orders a turkey sandwich.  He takes a bite, but for some reason the turkey in his sandwich smells funny to him.  While eating, he Tweets into his Blackberry:  “Am at Susan’s Sandwich Shop, the turkey smells funny today”. 

The 250 people who receive his Tweet read the message.  How many of those people are heading to Susan’s Sandwich Shop for lunch today?  Fairly or unfairly, people may start to avoid Susan’s delicious deli sandwiches, just because of one comment from Joe Microblogger.

Now, extrapolate this scenario to a global company.  Ten years ago, the impact of a dissatisfied customer was limited to his or her extended network of friends and family.  Today, one blog entry or tweet from the same disgruntled customer can turn into a PR fiasco for even the most reputable of companies.

To combat this cyber-negativity, companies have begun to form marketing teams whose primary duty is to monitor blogs and Twitter-like sites.  Many use websites like Tweetscan, which provide a searchable breakdown of company-related tweets.  Some even have Twitter handles to respond to complaints.  For example, Comcast uses the handle ComcastCares to respond to negative tweets, often expediting service to satisfy the customer. 

The old adage “Knowledge is Power” has never rung more true.  Due to the ubiquity of the internet, consumers can now broadcast their thoughts about a product or service to the world.  Other consumers can use this information to make purchase decisions, and, in turn, broadcast their own experiences. 

For a corporation this should be viewed as an opportunity rather than an obstacle.  The immense amount of customer feedback which populates the web essentially provides free market research.  This information can be used to quickly uncover defective products, and incorporate customer suggestions and desires into future offerings.  In the end, everyone benefits—the customer vents, the corporation responds, and a better product or service hits the market. 

For a good article on Comcast’s Twitter strategy check out this article in the Boston Globe.

If you want to learn more about Twitter visit Wikipedia.

Or head to Twitter.com.

July 21, 2008

Master Card, Visa or...Bill Me Later?

My wife has found a new way to shop online!
No, this is not yet another stereotype about the shopping habits of my better half - to be honest, I am more of a compulsive (and impulsive) shopper than she is! She recently found a payment option called "Bill Me Later" while checking out on an e-tailer's site and I thought that was a concept worthy of some discussion on these pages!
I had posted a piece about settling personal IOUs on the web earlier, here. Similarly, Bill Me Later is the more institutionalized form of paying for one's purchases without the traditional plastic instrument that we have all grown accustomed to use.


Bill Me Later offers US customers of most major online merchants Walmart.com, Overstock, and most recently Amazon the chance to make online payments sans a credit card.  After selecting the Bill Me Later option, customers simply enter the last four digits of their (US) social security number and their date of birth.  Those with qualifying credit scores have an account created in their name.  This account tallies purchases made using the Bill Me Later option.  Payments can then be made on the account using traditional (read safe) “snail-mail” methods like a check, or online at BillMeLater.com.
So why has Bill Me Later gained salience with so many leading online merchants? 
In a recent survey conducted by TNS Sofres, a media analytics organization, 44% of Americans stated that they were worried about using their credit card to make online purchases.  Cyber ‘Phishing’, hackers and identity theft horror stories all play on the fears of those who are considering making online purchases. 
You can imagine the frustration of online merchants who consistently find that a large percentage of their potential market consists of consumers who are afraid to pay.  You can also imagine the opportunity that this creates for alternative payment methods like PayPal, Google Checkout and Bill Me Later. 
By providing consumers one account to shop with, Bill Me Later (like similar services from PayPal and Google Checkout) consolidates payments. This consolidation minimizes the chances of credit card fraud, and increases the confidence of fraud-wary consumers in online payments.  Another benefit: Bill Me Later offers lower fees to merchants, often undercutting credit cards by as much as half a percent. This last point is particularly critical, given the recent US Federal Ruling on providing more bargaining powers to Retailers over credit card interchange fees (Read related article here). It points to a weakening of the stranglehold that networks like Visa, Mastercard etc., have on the consumer payments segment.
Alternative payments services also combat shopping cart abandonment.  Research by Marketing Sherpa estimates that 53% of online shoppers fill up their online shopping cart, only to navigate away from the web page and not follow through with the purchase.  Bill Me Later, PayPal and Google Checkout simplify the checkout process, reducing abandonment and increasing conversion rates.
As E-Commerce continues to grow in popularity and scope, expect online payments to grow more convenient and secure.  Alternative payment services will play a big role in what I term, "creative discontinuity", providing better options to merchants and consumers; along with Regulation, this will push credit card networks to innovate, which will ultimately benefit the consumer.
To stay in tune with what else is happening in the Payments world, be sure to check out the next issue of FINsights, Infosys’ Thought-Leadership journal on the financial services industry; for past issues, click here.   .

For more information on how Bill Me Later works, check out their FAQs page here.  I realize that most of my narrative is US-centric and I am keen to hear more from you on what is going on in other global, emerging markets. Of particular interest to me is the whole area of mobile payments, given that mobile phones are probably becoming (if not already!) the most ubiquitous consumer product (Refer to Mohit Joshi's post earlier, here)!

July 17, 2008

If you stock they will come

New York City, 5th Ave: 4 to 5 hours
New York City, Soho: 4 hours
New York City, 14th St.: 3.5 hours
Beverly Hills, CA: 30 minutes to 1 hour
Seattle, WA: 3 hours (out of stock)
Knoxville, TN: no line (out of stock)
Honolulu, HI: 20 minutes (out of stock)
Minnetonka, MN: 1 hour (out of stock)
Glendale, WI: 10 to 15 minutes (very little stock)
West Des Moines, IA: no line (very little stock)

If you are wondering what that was all about, the DVICE had this wonderful piece on the lineups for the 3G iPhone from Apple which now, we are reliably told, is out of stock with atleast a 12 day lead time for delivery.

 

The exotic apple iPhone is not the only product out of stock this week, the Morning Sun had this rather grim story of the Central Michigan Chapter of the Red Cross food pantry being out of stock.

The out of stock problem assumes significant proportions if one were to take a broader view of the Retail Industry. In a white paper on "Winning at the Shelf", Shirley Jackson from O4 Corporation frames the problem eloquently

All investments in marketing plans, advertising campaigns and trade promotions are worthless if the product isn’t there when the consumer reaches for it on the shelf

But then hasnt the industry been trying to solve the out of stock problem for decades now ?

What is the missing piece of the puzzle ?

Once again Shirley Jackson puts it very well

To win at the shelf and turn a purchase decision into a purchase, leading CP companies are recognising the need for more immediate insights into the particular circumstances in each store. Swift decision making based on direct and specific information is the best way to ensure constant presence on premium shelf space.

"Direct" and "specific" are the operative words here.

So how does one get "direct" and "specific" ?

The white paper talks about a Mobile Handheld solution, but there is something more profound here that is being suggested

small, sharp, smart technologies are the only way to win at the ‘moment of truth’: when the shopper enters a store or stands at the shelf ready to make a purchase.

When we started this series of blogs we posed the question on what disruptive innovations can unravel the mind of the value conscious shopper. Subsequently we also posed the question on how these disruptive innovations could provide a corral to checkout view of the value conscious shopper's activity in the store.  What this white paper is suggesting is to take this 360 degree view beyond the Shopper's pedestrian activity to shine some light on which shelves and displays attracted her attention.

So what small, smart and sharp technologies are out there to accomplish this ?

Item Level RFID Tagging is not going to happen anytime soon, atleast not on low value grocery products.

Are there non-RFID disruptive innovations out there that can provide "direct" and "specific" information on how shopper "interest" in a product at an endcap or promotional display converts into an actual purchase ?

How can these disruptive innovations also help Retailers and CPG Manufacturers prevent out of stocks of while ensuring compliance during high opportunity cost promotions ?

July 16, 2008

SEPAration or Unification: The unfolding story of Single European Payments

The Eiffel Tower, the Riviera, the Canals of Venice, the Beer of Germany (well, Belgian Beer may be!) - come to mind when one thinks of Europe. I love to travel and the sights and tastes of the great continent are arguably, among the best in the world.

Another reason to love the EU: the Euro. It is so convenient to be able to carry one form of currency while visiting so many unique locations. While the Euro does wonders for the traveler, it also makes life much easier for businesses across the European Union.

A common currency is great, but until recently credit, debit and other electronic transaction standards were different for every country. To fully take advantage of the common currency system, the Single Euro Payments Area (SEPA) initiative was launched in January.

SEPA’s goal: the creation of common payments standards, procedures, financial instruments and infrastructure for the Euro area. Soon it will be possible (proponents hope) for individuals and companies to make cross-border payments as quickly, safely and easily as domestic payments.

Though many in the payments and banking sector are excited about SEPA, Corporations have been slow to begin the conversion to SEPA formats. Why? At a conference in April, ECB board member Gertrude Tumpel-Gugerell spoke on the subject:

“So far, not many Corporates have actively started preparing themselves for SEPA, as for them, the precise impact of SEPA is not entirely clear. This is probably related to the initial reluctance of banks and software providers to communicate on SEPA, as some of their products are still in the pilot phase.”  (Read full transcript here)

In order for SEPA to be successful, it is important for banks to communicate effectively with their Corporate clients, the many benefits that the initiative brings to the table. Despite the IT costs that Corporations will incur during the migration to SEPA, it should be easy to convince Corporate treasuries that the initiative is in their best interest.

In short, SEPA will provide a new level of standardization, providing corporations the opportunity to automate reconciliation, consolidate back offices, and hold fewer bank accounts. In the long run, this should mean lower costs and increased efficiency.

SEPA also makes it much easier for Corporations to enter new markets and target customers across the European Union. Most importantly, the flattening of the payments space further integrates and strengthens the EU’s economy. So SEPA is both a "volume" and an "efficiency" play.

For a detailed analysis of the ever changing Payments sphere, be sure to check out the next issue of FINsights, Infosys' Thought-Leadership journal on the financial services industry; for past issues, click here.

To learn more about the current status of SEPA, check out another speech from Ms. Tumpel-Gugerell here.

For more information on SEPA, check out the Wikipedia entry here.

July 14, 2008

Will the 3G iPhone Mobilize Your Banking?

It is sleek and visually appealing (some may call it beautiful), easy to use, and now it is cheap.  The $199 3G iPhone debuted on Friday to much fanfare, and it likely marks the return of AT&T to top-dog status in the telecommunications industry.  But the impact of the 3G iPhone is hardly limited to Apple, AT&T and their competitors.  The debut of a more affordable version of the iPhone is also a boon to the fledgling mobile banking industry.

Mobile banking is what it sounds like—balance checks, account transactions, and payments conducted on a mobile phone.  These activities can be conducted via text-messaging, an online browser, or through a downloadable application.  Until now, this segment of the banking industry has been growing fairly slowly, but analysts expect mobile banking to take off in the coming years.  A study conducted by the financial consultancy Celent predicts that 35% of online-banking households will be using mobile banking by 2010.

 What does this have to do with the 3G iPhone?  Mobile banking is conducted easiest on a smart phone equipped with an advanced mobile web browser.  Right now, smart phones account for 15-20% of new mobile phone sales.  Because of its user-friendly features and stunning design, the iPhone is popular with segments of users who would otherwise not be interested in purchasing a smart phone.  As the latest faster, cheaper iPhone floods the market, more and more mobile phone users will have easy access to mobile banking technology.      

This is great for banks, great for Apple, and great for AT&T.  It is also great for users, especially those in countries where the mobile infrastructure is more advanced than the fixed-line infrastructure.  As mobile banking technology proliferates, Indian, Chinese, and Indonesian users who previously have had limited access to online banking will be provided a new way to bank.

Because they are so common around the world, mobile phones are a great example of the ubiquity of technology.  With this ubiquity comes unique, and often unforeseeable, impacts on seemingly unrelated industries and locales.  As we have seen, the 3G iPhone doesn't just provide another purchasing option for consumers in the U.S.; it also impacts banking strategies and the residents of emerging economies worldwide.                           

For more information on mobile banking, check out this very informative Wikipedia entry.

If you want to learn more about the 3G iPhone check out this story from the San Jose Mercury News.

July 10, 2008

Curious George walks the aisle

The City of Orlando it is reported is considering a new Shopping Cart Ordinance.

The city might consider requiring new stores with more than 20 carts to have a cart retention system. Customers of Big Lots, for example, must pay a quarter for a cart. At Wal-Mart, a digitally encoded locking signal prevents shoppers from leaving the parking lot with the cart

Orlando is not the only city complaining about Shopping Carts that show up at the most unlikely places. From Oceanside CA to Victoria Canada Shopping Cart Containment measures seem to be the flavor of the season.

With all this focus on stolen and abandoned Shopping Carts, Retailers maybe thinking containment and perimeter security, but what about the Shopping Cart inside the store.

In last week's blog it was clear that Retailers have very little knowledge of what happens in-store with Shopping Carts as the value conscious shopper walks the aisles.  But change is on the horizon with a few leading edge initiatives like Neilsen's PRISM, BestBuy's tests with Brickstream, Tesco's one-in-front initiative that uses thermal imaging.

But here is the challenge for solutions focused on monitoring in-store shopper traffic.

A survey on Australian shopping habits revealed that shoppers were not only venturing to their local more frequently, but were spending more time browsing in-store.

the average female spends 12 months of her time on Earth in shopping centres hunting bargains and buying everything from potato chips to the latest must-have patent heels. It found that for men shopping was generally a chore. For women, it was a pleasure

So its no longer about driving traffic in to the store and measuring traffic it is about making the browsing a pleasure or less of a chore depending on the shopprer profile.

This is where current technology solutions from cameras to infrared imaging to thermal sensing fall woefully short for they may provide a measure of traffic concentration in a section of a store or the total footfalls through an aisle, but they do not provide any insight into the browsing experience of the Shopping Trip from start to finish.

Without this corral to check out view of a Shopping Trip, any data of in-store traffic is about as insightful in understanding how the female shopaholic browses the store as studying an in-store random walk by a Monkey with a homing device on its collar.

So how can Retailers and Consumer Product Manufacturers gear up to understand the female shopaholic better to make those 12 months of a lifetime of browsing a pleasure ?

What disruptive innovations are out there which can give a corral to check-out, 360 degree view of the Shopping Trip ?

Also see

If you stock they will come ?

July 8, 2008

It's All Semantics: The Evolving World Wide Web

The other day I was on Slate.com, perusing the Business & Technology section.  I came across an interesting review of a new search engine, Powerset.  Powerset is unique because it employs semantic technology, meaning that instead of searching for key words (think Google) it tries to actually understand what is written. 

Intrigued, I decided to undertake a quick demo of Powerset’s abilities.  My first question:  how many Infosys employees are there?

Powerset’s response:  91, 187.

Now for the control group, I decided to ask Google the same question.  Its response was much less direct.

As someone who uses Google hundreds of times a week to gather information, I know that eventually I will find how many people Infosys employs.  Even so, the capabilities of Powerset-like technology are compelling.  Currently, Powerset only searches Wikipedia and Freebase.  But don’t expect these limitations to last long—on July 1st, Microsoft announced its intentions to purchase Powerset for $100 million. 

Microsoft’s resources, coupled with its desire to gain a greater share of the search-engine market, should help push semantic technology into the forefront in the coming years.  For those who have followed the evolution of the Web, this is an “about time” moment.  Nearly a decade ago, Tim Berners-Lee essentially dubbed the Semantic Web as the “next big thing”, even going so far as to call it Web 3.0. 

Though many disagree with the “Web 3.0” assertion, the Semantic Web has a huge amount of potential.  While the Internet’s ubiquitousness is impressive, it has yet to reach its potential.  Right now, the web is a gigantic collection of documents and data.  Search engines use keywords to bring this data back to users.  From there, it is up to the user to filter and process the data.  In time, search engines will begin to take over this processing task, semantically filtering data into usable information. 

This ability to transform disparate data into useful information is one of the reasons that corporations around the world are investing billions of dollars into the technology.  For example, Citigroup is examining ways that Semantic technology can help its traders and analysts better respond to fast-moving market conditions.   A 2006 report by Mills Davis, at the consulting firm Project10x, estimates that the world-wide Semantic Web market could approach $50 billion by 2010.

Corporate interest in the technology isn’t a surprise.  Imagine being able to type “who has knowledge of X client’s account”, and getting back a response detailing anyone who has ever worked on that client’s account, how long they have worked on the account, and what their duties were.  A Semantic search engine could gather this information from HR, from Email-databases, and from Knowledge databases.  This ability would be an incredibly powerful tool for any organization.

The Semantic Web is just another example of a growing, technology-enabled, worldwide interconnection.  There are so many brilliant minds around the world, and technology like this provides a new tool which we can use to learn from one another.

If you’d like to learn more about the potential of the Semantic Web, I suggest you check out this great article in Business Week.

Also, check out Powerset’s website.

July 7, 2008

Update: Evolution of the Banking-Payments Space

Splitting up the bill—we've all done it. Whether at a restaurant, paying for rent or utilities, or any of the other possibilities that may arise out of daily transactions, dicing up the check is always a hassle. There is always someone who doesn't have cash, and as electronic and mobile banking proliferate, fewer people carry bank checks or cash.

I have blogged earlier about Peer-to-Peer sites and this is another evolution in the payments space. New methods to split the bill and pay-back friends, roommates and co-workers are starting to gain traction. Take, for example, BillMonk.com. Launched in 2006, BillMonk is a free service that lets friends track and settle expenses. It conveniently lets you record expenditures and details through SMS, making it easier to track expenses on long nights out or weekend trips.

Sounds cool, right? BillMonk is just the tip of the iceberg. What BillMonk lacks is a built in network of users. As large social networks like Facebook, Myspace and Twitter look to create new revenue streams, expect them to consider venturing into the mobile (or "stationary" for that matter) payments market. Nate Westheimer over at Silicon Alley has a nice breakdown here of how Twitter can leverage its popularity and create a successful Person-to-Person (P2P) payments network.

Social networks aren't the only players in the P2P payments space. Financial institutions have been in the business of payments for centuries, and have something which most social networks do not—consumer trust. This trust, combined with the growing popularity of online and mobile banking, gives banks instant credibility in the mobile payments sphere.

Banks and Telcos in the European Union are already teaming up to let customers pay grocery, restaurant, and other bills using their mobile phones - click here to read more. This is being spurred, in no small measure by "One EU" regulations like SEPA (more about that in a later post). As consumers grow more comfortable with bank backed mobile payments, and technology improves, banks will be positioned to grab market share in the P2P payments space. This penetration could occur through singular ventures, or partnerships with other P2P payments players.

To me, it is fascinating that banks and social networks are even considered possible competitors in an industry. It is apparent that as the world flattens, the leveling of the playing field doesn't happen only between countries. It also occurs across industries. And personally, speaking, the next time I am sharing a cab during rush hour in New York and do not have the cash to split the fare with my co-passenger(s), I know where to log on and settle the deal!

The next issue of FINsights, Infosys' Thought-Leadership journal on the financial services industry focuses on Payments and will look at the dynamics of this exciting industry segment. For the last few issues, check out here!

July 2, 2008

Are you being served ?

My neighborhood Wal-Mart Store is undergoing a major revamp. Aisles have shifted, products are being re-stocked, planograms are hanging off the shelves. Into this "work in progress" I waded the other evening with my 3 year old. The "work in progress" didnt quite matter to my shopping experience but all the workmen in their gear got my 3 year old terribly excited enough to lose the keys to the mini-van. The "work-in-progress" notwithstanding the Store Manager and his associates spent 45 minutes with us retracing our steps to finally help find the keys.

On my way out of the store I couldnt help wonder on the irony. Here I was a regular shopper to the Store, spending close to an hour in the store running up a basket total of about $125 and there was no trace of my presence in the store but for my transaction at the checkout register. Till I walked up to the Store Manager seeking help he had no knowledge of who I was, where I had been in the store and what I was trying to buy. The retracing was useful in more than one way to both of us. I got to pick a couple of alternatives for products that were out of stock while the Store Manager got to know that I usually avoid walking past the pallets with promotional products to avoid running into other shopping carts who have no view of incoming traffic.

This incident reminiscent of the British Comedy "Are you being Served" was another reminder on the scant visibility to what happens in-store with a shopper once he or she walks-in.

Shopping in-store continues to be holy grail of Retailing. Rowan Pelling writing in The Telegraph UK notes that a real shopping experience beats E-Bay anyday with his preference to

prod and squeeze a product like a French peasant sizing up plums.

Prodding and squeezing may not be the only things shoppers are looking to do these days. The Belfast Telegraph notes that Irish shoppers are looking for ways to reduce grocery bills.

In a report out today, it says almost one-third of shoppers spread their spending across a number of supermarkets.

Retailers are being setup against each other for a greater share of that monthly grocery basket by that value conscious shopper.

A recent report by Unilever titled "Winning Shoppers in Turbulent Times" throws further insight on how the value conscious shopper is changing habits.

The number and types of shopping trips are changing. People are combining errands to make fewer trips and they are buying more on each trip.

People are already employing savings strategies, such as clipping coupons, as they seek both quality and value

But what can the Retailers do about this value conscious shopper ?

They have no idea who she is most of the time, atleast not until checkout. They very rarely know what the shopper has on her shopping list while she walks the aisles. What is worse as she wanders around the aisles in search of value, they have no way of getting in front of her with the right messages.

What if one were to conjure up an innovation with the intelligence to not just divine what shoppers are interested in but also the ability to influence what they actually buy - will the industry embrace such an innovation ?

Conversations with Executives in the Retail and Consumr Packaged Goods on this question have revealed some predictable and some intriguing reactions.

This looks like an interesting idea but I don’t know if I am the right person to champion this within my organization ?

You have a cool technology but I need to understand what it will cost for me to deploy this across my business even before I decide if it is worth my time to experiment ?

But here is the challenge with Innovation that disrupts. It has a 360 degree impact on my organization. I don’t know how many different business cases need to be looked at to make a decision on adopting this Innovation ?

I don’t know how many different constituents or stakeholders I need to herd into a single room to make that leap of faith ?

Are traditional organization structures limiting Retailers and CP Manufacturers from taking the leap of faith to embrace disruptive innovations ?

What will it take to get Retailers and CP Manufacturers to think 360 to embrace such innovations, especially those that can help unravel the mind of today's value conscious shopper ?

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Curious George Walks the Aisle