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.


January 31, 2011

Embrace inclusivity for sustainable growth

Guest Post by
Chandra Shekar Kakal, Member of Executive Council, SVP & Global Head - Enterprise Solutions Group, Infosys Technologies Limited

I am on my way back from the World Economic Forum Annual Meeting at Davos. The mood there was upbeat. With the economic crisis behind us, there was optimism about making the world a better place for tomorrow despite the innumerable challenges ahead. Interestingly. most talks led to emerging economies in general, and India and China in particular.

What struck me from the deliberations at Davos is that sustainable growth is impossible without inclusivity. If we must create a better tomorrow, we need to include people with diverse genders, origins, financial backgrounds, colors, and abilities in the partner ecosystem. Without inclusivity, sustainable development will remain a dream and a topic of debate.

Continue reading "Embrace inclusivity for sustainable growth" »

The New Possibility, the New Truth

Guest Post by
S. D. Shibulal, Chief Operating Officer and Member of the Board, Infosys Technologies Limited

Companies must continue to focus on interconnectivity and uninterrupted flow of services and talent to realize the benefits of globalization, according to Shibulal. He discusses collaboration as the new reality for global growth.

Continue reading on

Reproduced with permission of

Social Contracts for the New World Order

Guest Post by
Subhash Dhar, Executive Council Member, Senior Vice President and Head, Global Sales,Alliances and Marketing Head, Communications, Media and Entertainment, Infosys Technologies Limited

Financial and social issues dominated yesterday's discussions. Between executive meetings, I participated in two very interesting debates.

The first one was on currency wars and devaluation of currency as a strategy to stimulate the economy. The panel comprised two finance ministers, two central bankers, the head of a leading bank, and an eminent economist. In the light of $800 billion currency printed by USA, the panel noted that while a healthy U.S. economy is in everyone's interest, we are left wondering if the United States is trying to stabilize the global economy or stimulate its own at the risk of others.

The other discussion I heard was on the need for a new social contract between governments, businesses and civil societies. Developed countries argued that their social contracts need to be re-looked as they face new economic, demographic and global realities. Emerging economies, on the other hand, submitted that social contracts being drafted by them could benefit from lessons learnt by developed countries.

The Infosys Friday evening reception is among the most popular networking events at Davos. Ten minutes into it, and we had no space to move around. The Indian fusion finger food prepared by Michelin-starred chef Sriram has many fans among WEF regulars.

New realities of the financial system need a holistic approach

Guest Post by
Subhash Dhar, Executive Council Member, Senior Vice President and Head, Global Sales,Alliances and Marketing Head, Communications, Media and Entertainment, Infosys Technologies Limited

After a snow-free day zero, the typical Davos weather is back. The overnight snow has brought back the Davos spirit in me. The theme of this annual meeting is 'the new realities'. And keeping with it, noted economist Nouriel Roubini has called the world economy a half-full and half-empty glass.

In his opening keynote address, the Russian President made a touching reference to the tragedy at Moscow. Global leaders who appealed for social causes in their address included Bill Clinton for the ongoing reconstruction of Haiti.

As the meetings of the day unfolded, it was clear that the new financial regulations were driving the most heated debates. Participants included bankers, non banking financial service providers, economists, and regulators. The popular opinion is that a holistic approach to reform the financial system is more important than regulating banks.

Meanwhile, the Indian story continues to march forward with the Indian lounge adda becoming a big draw for Indian and non-Indian delegates. A. R. Rehman was honored with the prestigious WEF Crystal Award for his distinguished contribution in field of art. The Bajaj nightcap is always well attended and this year was no exception.

Most of the attendees arrived today. By late afternoon, this small town turned into a large convention center. The WEF Summit has taken off in full swing. I look forward to the French President's address tomorrow.

January 28, 2011

Games-based learning for young business leaders

Guest Post by
Subhash Dhar, Executive Council Member, Senior Vice President and Head, Global Sales,Alliances and Marketing Head, Communications, Media and Entertainment, Infosys Technologies Limited

Day zero of the 41st World Economic Forum Summit started with some good news for Infosys. The Padma Bhushan award conferred on Kris is indeed a great way to kick off the leadership event. However, we have much to prepare for four days of plenary sessions, panel discussions, executive one-on-ones, and media interviews; celebrations must wait.

Continue reading "Games-based learning for young business leaders" »

January 27, 2011

'Collaboration holds the key to growth'

Guest Post by
B. G. Srinivas, Executive Council Member, Senior Vice President, Manufacturing; Product Engineering; Product Lifecycle and Engineering Solutions, Infosys Technologies Limited

Enterprise collaboration can address the imbalances in global business and ensure sustainable growth. B. G. Srinivas blogs on how the digital media has redefined globalization and why companies in the developed and emerging economies must collaborate.

- Build relationships to add value to consumers

- Collaboration is intrinsically related to our future

- Achieving Sustainability in a Competitive Green World

- Optimism for Balanced Trading Terms

Reproduced with permission of

Postcards from Davos 2011: A moment for reflection

Guest Post by
Kris Gopalakrishnan, CEO and Managing Director, Infosys Technologies Ltd.

Got news of the Padma Bhushan award while driving in from Zurich. I am thankful to the Government of India for this recognition. I thank all Infoscions and the Infosys leadership team for their support, without which I would not have received the honor.

This year, India is present in a big way at Davos. We probably have the largest contingent of representatives. The Confederation of Indian Industry (CII) has scheduled an India Inclusive program. One of the themes is 'Inclusive Growth', and India's growth story is a good fit.

All of us have a packed agenda for the next four days - panel discussions, media interviews and networking meetings. Facilities at the event are good, making it easy to schedule and manage meetings. Davos Congress Center, the main venue, has been renovated and can easily accommodate a large gathering. I attended the welcome party and the mood of the participants is more positive than it was last year.

November 12, 2010

Roundtable: Business Meets Governance at G-20 - II

Guest Post by
Kris Gopalakrishnan, CEO and Managing Director, Infosys Technologies Ltd.

  1. We had an active and fruitful working session with all the CEOs from the three working groups under the Corporate Social Responsibility theme. New ideas emerged including the role of social entrepreneurship in creating new jobs. Many in the room supported microfinance as a viable mode to address employment issues by creating small entrepreneurs. The need for creation of a "global resource center" or a "global clearing house" to act as a repository for best practices and pilots emerged through the discussions.
  2. The news that both France and Mexico plan to continue to host the G20 Business Summit has emerged-- what formats will be used are still unclear. The CEOs seemed to converge on the need for a process to continue this dialogue on an ongoing basis and did not want this to be seen as a one-off initiative. They also agreed on the need to define some process to review action arising from this session. A combined public-private taskforce may be a way to take this forward between G20 Summits. Many Heads of state participated in the G20 Business Summit at Seoul and gave their support to the processes defined here.

November 11, 2010

Roundtable: Business Meets Governance at G-20 - I

Guest Post by
Kris Gopalakrishnan, CEO and Managing Director, Infosys Technologies Ltd.

The Korean government needs to be congratulated for organizing a business summit alongside the G-20 Summit. As our experience suggests, significant progress can be achieved if the business community works closely with the government to generate jobs and create wealth.

The participation at the Summit is global, with representatives from most continents. Expectedly, Asia has a large presence.

The consensus is that the Summit will strengthen economic recovery by sustaining the coordinated efforts in stimulating growth and creating jobs. The working groups have put together preliminary reports. After tomorrow's discussions, we will present the final recommendations to the G-20 Heads of State. We look forward to our recommendations being taken forward and supported by governments.

It is encouraging to know that business summits will be organized at the G-20 Summits in France and Mexico.

October 14, 2010

Will QE2 sail...or sink?

A second round of quantitative easing in the US economy is not required, probably won't work, and may prove counter-productive.


Past weeks have seen the US (and world) financial media aflutter with talk that the US Federal Reserve will initiate a second round of Quantitative Easing (QE) aimed at boosting economic growth. This QE2 is generally expected to consist of open market operations such as purchasing financial assets - government bonds, mortgage-backed securities and corporate bonds. QE2 will be a bad idea.


Why would QE2 be a bad idea?

  • QE2 will weaken the dollar and hence raise oil prices (which are denominated in dollars). Costlier oil will act as a drag on growth. The Fed believes that the positive effects of a weaker dollar (such as cheaper exports) will outweigh negative effects, but this belief is not sufficiently grounded in empirical experience. 
  • Economists don't know enough about how QE affects inflation; such a policy may well cause inflation to surge
  • Easy funds arising out of QE2 will chase higher returns outside the US; the wall of liquidity already descending on emerging markets in the past few months is thus likely to grow even bigger. This will not only cause QE2's effects to leak out of the US economy, but will also lead to asset price bubbles in emerging markets. QE2 may well thus cause the US to export financial instability to the emerging world.
  • The biggest reason why QE2 will be a bad idea, however, is that there just isn't enough evidence to show that such a policy would work. Prior uses of QE include Japan during the early 2000s and the financial stimulus used in the US and Eurozone in the aftermath of the 2008-09 crisis (i.e., QE1). The Japanese experience was hardly edifying, failing to achieve either higher growth or deliverance from chronic deflation. In any case any extrapolation from Japan to the US would be inappropriate - the US is a far larger economy (almost 3 times the size of Japan), and is a far more diversified, open and vibrant economy, with a currency that is also the world's reserve currency.
Of course, it may be argued that QE1 should have been stopped owing to similar misgivings. However the situation was very different then, with most experts believing that economic armageddon was looming. It was a desperate measure, but the desparate situation called for it. And QE1 perhaps did work, at least in some measure (although there are many divergent opinions on this). Things are very different now. The US (and world) economies have been on the mend since the recession officially ended in June 2009 , and the dreaded "double dip" has receded to not much more than a theoretical possibility. As outlined above, quantitative easing in the current situation may well prove ineffective or even a setback. Today, the risks of further easing outweigh any possible benefits.

Prolonged easy monetary policy (in the US and elsewhere) in the aftermath of the early 2000s recession sowed the seeds of the 2008-09 financial crisis; easing monetary policy now may well sow the seeds of the next crisis.

The recession: a "surprise" ending

Neither the recession nor its end should have come as a surprise


I had written on this very blog in April 2009  that the US and global economies would begin their recovery from recession in July 2009. This opinion was based on five factors, all publicly known.


The opinion was considerably at odds with that of eminent economists and world leaders at the time: Uber-gurus such as Nobel Laureate Paul Krugman  and Robert Reich (a member of President Clinton's cabinet and ranked among America's Top Ten Business Thinkers) were predicting another Great Depression; the IMF and OECD were in March 2009 foreseeing a recovery for the world economy starting only in 2010  . President Bush said in his final press conference that his economic advisors believed that "the economic situation could be worse than the Great Depression". The US Federal Reserve warned in February 2009 that "the crippled U.S. economy would deteriorate throughout 2009".


Now comes heartening news: The US National Bureau of Economic Research (NBER)'s Business Cycle Dating Committee (which certifies the start and end of recessions in the US economy) said three weeks ago  that the recession ended in June 2009, and a recovery began that month. It also said the basis for this decision was "the length and strength of the recovery to date".


My analysis and opinion on the end of the recession have thus been proven remarkably accurate, despite having appeared outlandish, over-optimistic and contrary to prevailing expert wisdom in April 2009 when they were written.


Sadly however, it appears that in matters economic, we must continue to stumble from one surprise to another. Earlier too, in March 2007 and August 2005, I had written forewarning of an impending implosion of financial markets - here I wasn't alone but among an unheeded minority that had forewarned of such an eventuality.


A guest column I've written in CEO World magazine in February 2010 analyzes recent economic events and shows that neither the recession nor its end should have come as a surprise.


Of course many people don't believe a recovery has begun even now (some reasons in this blog post). Also, the above only means that the recession ended mid-2009 and the recovery began then - it certainly doesn't mean the US or world economies are perfect as can be. 


A few thoughts on longer-term structural changes (some rocky, some benign) in store for the world economy in coming years are this blog post. They include:


v      No lessons have been learnt from the recent financial crisis, and so there will be more crises.

v      As the world rebalances, global wealth distribution is shifting inexorably. In 2025 the world will look more like it did in the late 19th century (in terms of relative apportioning of wealth, not in terms of absolute standards of living or technological advancement) ! 



September 27, 2010

Postcards from Summer Davos 2010: Vertical Nation

Guest Post by
Ashok Vemuri, Senior Vice President and Global Head, Banking and Capital Markets; Strategic Global Sourcing, Infosys Technologies Ltd.

The Summer Davos was a roundtable on China. Delegates opined  (not surprisingly) that the country will shape and provide direction to the global economy. They also sounded a note of caution about writing off the United States - businesses are sitting on huge amounts of cash, capital expenditure has increased, consumer spending is being boosted by savings, and rehiring is gathering momentum. Unlike the Great Depression or the financial crisis in Latin America and Japan, where policy interventions were slow, policy makers in the U.S. have responded immediately and decisively.

The property bubble in China is a cause for concern. Growth will be dictated by trade between emerging economies. The rebalancing of the global economy will be disruptive, and domestic demand in emerging economies will drive innovation and the next technology breakthrough.

The Shanghai Expo was yet another event that confirmed the size and scale of the Chinese juggernaut. Let me share a statistic that sums up the China story: 10,000 high rises were built in Shanghai in the last 10 years - effectively, 3 structures built and functional, every day!

September 20, 2010

Postcards from Summer Davos 2010: A Master Class on Leadership

Guest Post by
Rangarajan Vellamore, COO, Infosys China

I attended a couple of sessions on leadership, specifically on building and navigating a company in the global economy.

Jack Ma, founder and CEO,, spoke about instilling a 'never complain' attitude and a mindset of 'independent thinking' across the company. He said that several multinational companies dump their products and solutions in China. According to him, this approach will not succeed as it does not respect the unique needs of local customers.

Kris focused on the importance of leadership and robust processes to establish scalable companies.

September 15, 2010

Postcards from Summer Davos 2010: A Champion Leads by Example

Guest Post by
Kris Gopalakrishnan, CEO and Managing Director, Infosys Technologies Ltd.

My first impression on arriving at Tianjin is of 'magnitude'. The city's administration is one of the four Chinese municipalities that enjoy autonomy. Scale sows seeds of progress. The infrastructure in China is world-class and drives economic development.

During my visits to China in the recent past, I have witnessed a grand display of the scale and efficiency of China's growth. I am impressed by the far-reaching, lasting change as China seeks its rightful place in the world economy. We have lessons to learn from the 'new champion'.

Postcards from Summer Davos 2010: A Super Power in a Big Hurry

Guest Post by
Ashok Vemuri, Senior Vice President and Global Head, Banking and Capital Markets; Strategic Global Sourcing, Infosys Technologies Ltd.

Today's discussions put the spotlight on China's economic power. The country's growing influence on the world economy is the outcome of leadership and commitment to sustainable development, environmental protection, labor practices, and education policies.

The planned development of the western provinces and investments in Tier 2 cities such as Tianjin are boosting China's growth. The country is focusing on innovation and the development of infrastructure at a rapid pace. I learn that the Meijiang International Convention and Exhibition Center was built in less than a year!

I attended a session on 'mixed reality' by fellow member from the Forum of Young Global Leaders (YGL) Prof. Adrian David Cheok. His introduction to the application of mixed reality in real life has rekindled my interest in artificial intelligence.

I look forward to Day 3 for refreshing insights into the state of the world economy and perspectives on growth.

Postcards from Summer Davos 2010: Asia, Take a Bow

Guest post by
Rangarajan Vellamore, COO, Infosys China

The 'Summer Davos' at Tianjin began with sessions focused on the growth story of Asia. The consistent growth of Asian economies in the last decade heralds Asia's century of economic growth. During the global financial crisis, the growth in China and India helped stabilize the global economy. It is indeed a remarkable achievement.

We can expect the Global Competitive Index (GCI) of Asian countries to grow by attracting investments, developing a rich talent pool and driving innovation. I attended an interesting session on building talent pools across Asia and developing Asian leaders to champion growth. The key takeaway was that growth must take place in a sustainable manner so that it does not put a strain on existing resources.

Postcards from Summer Davos 2010: Sustainability Lessons from the Game of Chinese Checkers

Guest Post by
Ashok Vemuri, Senior Vice President and Global Head, Banking and Capital Markets; Strategic Global Sourcing, Infosys Technologies Ltd.

Business leaders of the Forum of Young Global Leaders applied their minds and discussed sustainability - defining, understanding and analyzing corporate responsibility.

Interesting facts emerged from our discussion: We consume natural resources that need to be replenished by up to 1.4 times. Almost 14% of U.K.'s energy consumption is accounted by washing machines. Contrary to popular belief, China is emerging as the 'clean tech lab' of the world. Of the US$ 520 billion invested in global sustainability initiatives, a staggering US$ 200 billion was spent in China!

In my interactions with Chinese policy makers and businesses, I sensed that China is not willing to compromise on the living standards and needs of its people - the community always plays a significant role in decisions at all levels.

The holy grail of sustainability is to reduce the ecological footprint without compromising on human and economic development. The world needs change agents to achieve sustainable growth. Global companies can realize sustainability through effective change management.

March 23, 2010

Lessons for aspiring internet censors

What we can learn from Google's China experience (and China's Google experience).

Google has as of yesterday pulled the plug on it's search service in China. Whether this is a good move for Google from a long-term perspective remains to be seen. Google may endear itself to younger Chinese by this move, but also runs the considerable risk of leaving the huge Chinese market for internet search(the world's largest) to larger rival Baidu. And Baidu has proven to be a formidable rival to Google in China, cornering about 57% of the Chinese market for internet search revenues, to Google's 35%. This market share will of course only go upward now. And who knows - first China and maybe then the world? It is difficult to tell whether Baidu can translate its excellent performance into the English internet, but maybe that's not as difficult as it looks. Stranger overthrows have happened in business.

As I see it, the Google-China episode reveals the risks inherent in trying to set up an elaborate infrastructure for censoring something as intrinsically free as the internet. In particular, it holds two sobering lessons for such aspiring internet censors. Read those lessons in my post on the Fast Company blog:  In a hubless world, there's little room for hubris

December 23, 2009

How (not) to save the world in 12 days

Climate change may or may not be a certainty, but efforts to curb it are an important barometer of human cooperation.

Was the just-concluded Copenhagen summit on climate change really an initiative to save the world, as some expected?  Probably not, for reasons I enumerate below. Nevertheless, Copenhagen mattered – not to stave off the impending disaster of global warming, but simply as a test case for humankind’s ability to solve complex problems thru cooperation.
First, let me list the reasons why I believe COP15 (the Copenhagen summit on climate change held from Dec 7-18, 2009) should never have been expected to deliver the world from a death-by-warming fate. 

1. Humanly-induced climate change is hardly the cast-iron certainty it is frequently made out to be. The climate is a humongously complex creature, determined by the intersection of phenomena as diverse as solar variations, earth orbital perturbations, variations in the behavior of oceans, the atmosphere, tectonic plates, etc. Each of these – let alone the interactions between them – is too poorly understood, and it will take several years before climate modeling becomes sophisticated enough to begin to definitively answer questions relating to climate change*. For some very thought-provoking arguments as to why human-induced climate change should not be taken as a given see here, here, here, here and here.

2. Even if global warming is assumed to be a reality, it is hopelessly optimistic to believe that placing national emission caps will work to curb it. Such quotas are fiendishly difficult to monitor – countries fiercely resist monitoring attempts as an infringement on their sovereignty. In addition, each country believes some other country / countries should bear a greater load in terms of curbing emissions. Thus, the developed countries believe the emerging economies should do more and vice-versa. Countries that are seen as most affected (e.g. the Pacific Islands) believe everyone else should do much more. Such intractability is typical of a tragedy of the commons situation, of which this is a classic example.

3. People (especially Governments) are not very good at getting together to solve complex problems. Such concerted action is inevitably fraught with distrust, veiled self-interest and political machination. If this were not the case, the United Nations should have consigned armed conflict to the dustheap of history decades ago.

Program and Risk Management 101
Thus at the very least, the Copenhagen summit should have been preceded by far greater preparation. A basic tenet of Program Management is that enlisting the collaboration of all stakeholders needs hard work and can hardly be taken as a given. Beginning months in advance, countries known to be recalcitrant including the emerging economies and the G77 should have been brought round through extensive socialization. The organizers appeared to be taken by surprise at the confrontational stance taken by the emerging economies and the G77 a few days into the summit. Surely this was a risk that should have been anticipated and prepared for. Similarly, the integration of the Kyoto Protocol should have been well thought out, rather than having to be brought up almost as a surprise element (even a deal breaker) well after the summit was under way.

Continue reading "How (not) to save the world in 12 days" »

October 17, 2009

Will social networking work in risk management?

End of 08, when the crisis was showing its worst fear and we all were simmering in the lay-off storm, my partner in Infosys consulting who also heads GRC practice asked me a pertinent question - " Will social networking work in risk management?" Being a devoted risk practitioner, my immediate counter question was - "do we have a valid business case?" I was all in the negative of the existence of this concept in risk world. Social network / commerce etc was to me the world of facebook, twitter and at max it has relevance to the realm of wealth management. Risk mgmt, a blunt "NO". But I was wrong.....Foot in mouth

Continue reading "Will social networking work in risk management?" »

August 12, 2009

Divining the economy on Logistics demand pattern

While "worst may be behind us" and the "economy is pointed in the right direction" are optimistic rhetoric based on encouraging data around reduced unemployment rate, unemployment claims and related labour data, a key parameter that has historically been a reliable barometer of the future of the economy is the logistics demand pattern. Transportation business is a lead indicator of the economy as the industry in primarily involved in shipping basic raw materials to finished goods.

Continue reading "Divining the economy on Logistics demand pattern" »

May 15, 2009

Bank Stress Tests - Not so Stressful?

Released last week, the long-awaited results of the “Stress Tests” conducted under the direction of the  US Treasury Secretary, Timothy Geithner,  have since been picked, prodded, lauded and criticized.  Pundits from the right, left and the center have unleashed a torrent of mixed opinions into the media and blogosphere.  With a week gone by, I thought I would table a few questions which I envisioned might strike up a lively debate:
·         Were the Stress Tests stringent enough?
·         Rather than a true test of bank health, were the Stress Tests instead a means to boost confidence in the banking system?  
·         Will the U.S. Stress Test model be emulated by other countries, especially in Western Europe?

Continue reading "Bank Stress Tests - Not so Stressful?" »

April 27, 2009

Oracle's Sun Buy: Eclipsing the Competition?

As a mammoth union changes the technology landscape, a few things to watch for

By embracing Sun, Oracle gains huge heft and extends its shadow to cover a wider swathe of the technology industry. The two companies clearly have significant synergies. But where do these synergies lie, and how will Oracle capitalize on them? Here's an analysis of a few elements of Oracle's strategy, and some implications for the industry, that any observer of the technology industry should track over the next year or two.


Oracle's Server Strategy

The buy gives Oracle an entree into the server business, a space where it lacks a footprint. However the server business has been getting increasingly commoditized, and this trend will accelerate as Cloud Computing gains traction. This is because Cloud Computing (CC) is inherently a large-scale operation, and CC service providers tend to be behemoths that buy up servers on a humongous scale. Oracle's server business will thus see its customers' bargaining power grow, and watch its margins being squeezed. These dropping margins and Oracle’s inexperience in the hardware business have prompted several observers to speculate that Oracle will jettison Sun’s server business. However Oracle is unlikely to do any such thing. In fact, this is where Oracle can exploit one synergy : its flagship product, the Oracle database has for long been tightly integrated with Sun's Solaris, which Larry Ellison calls "the heart of Sun's business". Oracle will need an astute bundling of servers, OS (Solaris), database and Apps to pull back margins somewhat in the non-CC market.


Oracle's Cloud Computing strategy

Oracle may also perhaps become a Cloud Computing provider itself, although there is no indication of such a move yet. Sun has a fledgling CC service called Sun Cloud (a title that appears oxymoronic until you realize that Sun, with characteristic flair, has given it the ingenious tag line, "Behind every cloud, you'll see the Sun" !! ). Oracle may choose to develop this service, but will have to reckon with the formidable Google, Amazon, IBM and Microsoft which are already striding this space. If it does decide to throw its hat into the CC ring with Sun Cloud, Oracle may have an advantage in that Sun Cloud is touted as being much more open than rival CC services. This will help assuage the concerns that many prospective CC customers have, of being locked-in by CC vendors. However this openness may sit uncomfortably with Oracle, which has neither shown much predilection nor strategic commitment towards openness thus far.

Ironically, buying Sun may be sending Oracle deeper into the clouds. But a strong foray into Cloud Computing may be what it takes to put the competition in the shadow.

Oracle's strategy for MySQL

Continue reading "Oracle's Sun Buy: Eclipsing the Competition?" »

November 30, 2008

Mark-to-Market Rules - Worsening the Credit Crisis?

With Citi being forced to seek the help of the U.S. government once again, it is apparent that banks will continue to feel the effects of a deteriorating housing market for some time to come.  While the viability of Citi’s Universal Banking model is being debated, it is becoming increasingly clear that, regardless of Bank-type, mortgage-backed securities are drowning our financial institutions in a sea of red ink. 

Many question whether this deluge of losses is actually necessary.  Bankers are pressuring regulators and lawmakers to make adjustments to FAS 157, the mark-to-market accounting rule in the US.  Put in place in response to the Enron crisis (Enron overvalued its assets to the point of bankruptcy) mark-to-market accounting requires corporations to value assets at their "fair value"; the price the asset would command on the open market. 

Continue reading "Mark-to-Market Rules - Worsening the Credit Crisis?" »

November 25, 2008

Offsetting the Rhetoric Against Offshoring

A new take on making the outcries against outsourcing less worrisome

The past few years have seen mounting trepidation over job losses in the US, particularly to developing regions such as India and China.These have been accompanied by sporadic outcries againt outsourcing and offshoring of jobs, which the ravages of the current financial crisis will only accentuate. With large banks collapsing and General Motors, once the mightiest corporation in America, sending out frantic distress signals, the crisis has brought the unthinkable to pass. These traumatic events are hardly likely to make Americans –whether government, intellectuals or the public - more tolerant to the steady outflow of jobs from the economy.

Now come two substantial new arrivals - a book and a study - that should go a long way towards allaying any backlash that may be brewing in the ateliers of the protectionists.

The book is a thoroughly researched, eloquently argued and highly persuasive piece, titled The Venturesome Economy - How Innovation Sustains Prosperity in a More Connected World. It's central thesis is that technological innovation is a complex, multiplayer game in which America still leads the world by a long way. American scientific, technological and economic pre-eminence are thus not going away anytime soon. The book goes on to argue that "neo-protectionist" fears are unwarranted, and shows how they will probably undermine America's economic might in the long run.

The book comes with impeccable credentials. It is authored by Amar Bhide, the Lawrence D. Glaubinger Professor of Business at Columbia University. Prof Bhide is also a co-researcher of Edmund Phelps, 2006 Nobel Laureate in Economics who is an authority on, among other things, the relationship between investment in education and research on the one hand, and economic growth on the other.

And Prof Bhide could hardly have chosen a better time to weigh in, as anti-offshoring rhetoric can be expected to rise over the next few months. It must be noted that the primary purport of the book is not to support outsourcing or offshoring,and I am sure nothing could be farther from the author's mind than to be painted as a torchbearer for the outsourcing brigade. Nonetheless, the arguments presented therein can be read as making a substantial case for a more liberal approach toward outsourcing.

The author marshals an astonishing array of evidence in supporting his thesis, stitching together data and information from diverse disciplines. He presents data to show that protectionist  fears in  the 1980s that the US would soon be overtaken by Germany and Japan, which focused on rigorous planning  of their scientific manpower, proved baseless as  the US prospered while  the ostensible aggressors largely floundered.  He says things are no different this time, with China and India.

Continue reading "Offsetting the Rhetoric Against Offshoring" »

November 10, 2008

Innovation through Collaboration: Addressing Flat World Challenges in the Hi-Tech Industry

The world of business has never seen such fierce competition. Neither has it seen such an abundance of information or opportunity! This creates the perfect recipe for “Collaboration 2.0” – which can give organizations that competitive edge, while also offering the world better products and services – practically created by the consumers. Read more about this trend here. I shared my thoughts on this at Oracle Open World. You could also view my presentation here.

October 31, 2008

Now Showing: Government vs. Free Market

In the aftermath of the financial crisis, the lines between government and free markets are being fundamentally redrawn. As a new world financial order emerges, laying down some objective principles will help.

On November 15th, leaders of the world's top 20 economies will meet in Washington, D.C. to decide what financial regulation will look like in future. The creation of this new world financial order is at once a historic opportunity and a task of immense responsibility. People are already referring to the Nov. 15th summit as Bretton Woods II, thus equating it with the conference that created the post-war world financial order that endures to this day.

With the notable exception of the US, almost all the leaders who will be in attendance have already weighed in in favor of greater regulation of the financial markets (see, for example, here, here, here, here and here ) and so we are inevitably entering an era of increased regulation. In this 2-part essay I will analyze past trends in financial regulation, and outline some principles that a financial regulatory regime must adhere to. I will revisit this topic after mid-Nov. and evaluate the outcomes of the Nov. 15th summit in the light of these principles.


Continue reading "Now Showing: Government vs. Free Market" »

October 15, 2008

Bail Out Blues

I was teaching my 6 year old a new nursery rhyme the other day, in keeping with the times…!

Baa, baa, Paulson, have you any bail out?

Yes Sir, Yes Sir, 700 billion of tax payer loot

Some for the Big Banks, some for Wall Street

And some for the Congressmen (and women)’s gravy train

But none for the poor man (and woman) who foreclosed down the lane!

Seriously speaking, the US Treasury-led bail out has generated very lively debates across academics, economists, columnists and the entire political spectrum. The fact that there is a Presidential election looming in less than 3 weeks adds to the fireworks!

When the Emergency Economic Stabilization Act of 2008 (a.k.a the "bailout plan") was signed into law on October 3rd, reaction was mixed.  Various opinion leaders (notably Warren Buffett and George Soros) had differing viewpoints—many of them critical of the plan’s ability to achieve the intended goals.  The market didn’t react as hoped and what followed was a massacre that the global stock markets had not witnessed (especially, the Dow Jones Industrial Average in the US) in a generation  

Following UK Prime Minister Gordon Brown’s lead, on Tuesday October 14th, the Bush Administration changed course and announced what was tantamount to a partial nationalization of large U.S. banks - essentially forcing nine of America’s largest banks to accept funds in exchange for an equity stake.  The markets around the world anticipated this coordinated action and responded by opening the week with one of the highest single day gains in history.

I think that the biggest conflict facing the implementation of any bail out plan is really the toss-up between protecting tax payers’ interest and the need to thaw the credit markets by freeing up the Banks’ tangle of toxic assets! I am probably reducing the challenge to a very simplistic proposition, hence I am keen to hear your views.

I have also put together a links page, polling opinions of noted economists, columnists and academics.  If you have the time, click to read the extended entry below and let me know what YOU think about the bailout plan, the nationalization of banks around the world and the future of the global economy. Of noteworthy mention is Economics Nobel Prize winner, Paul Krugman’s column in The New York Times on Gordon Brown’s "equity injection" plan.

Continue reading "Bail Out Blues" »

September 23, 2008

A Firewall for Wall Street

When death-defying daredevilry goes awry

What happens when you neglect an engine that is long overdue for an overhaul? Answer: It breaks down, perhaps bringing an aircraft crashing down to earth.

And in recent days Wall Street, the engine of the world financial economy, has sadly shown that it is far from immune to the banal real-world constraints that the rest of the world is routinely accustomed to living with.

Owing to a heady and overpowering mixture of high expectations and sheer exuberance, many financial industry players were convinced they could defy the mundane aspects of the real world, such as gravity. But magic wands and pixie dust did turn out to be the stuff of fairy tales, after all.

As I wrote 18 months ago in The Long Arm of the Laws of Economics, risk in world financial markets has been underpriced by hiding it away, using increasingly arcane, complex and innovative instruments* such as Credit Default Swaps and Collateralized Debt Obligations. As I wrote,

"While underpriced (Cheap) risk is good for borrowers in the short term, in the long term it can undermine  the health of the entire financial system. Thus there are good grounds for apprehension as to the robustness of the world's financial markets."

Continue reading "A Firewall for Wall Street" »

September 19, 2008

Three Cheers to the Universal Bank!

On April 7, 1998 CitiCorp and Travelers merged, forming Citigroup.  Operating in both the investment and commercial banking spheres, Citigroup represented the reemergence of the Universal Bank, a Financial Services supermarket that was rendered extinct by the Glass-Steagall act of 1933. 

The Glass-Steagall Act was enacted in response to the Crash of 1929.  Large, deposit-holding commercial banks had waded into the booming stock market, underwriting issues and making risky loans (sounds familiar?).  When the market crashed and banks failed, deposits were wiped out (there was no FDIC, back then!), kick-starting the Great Depression.


Continue reading "Three Cheers to the Universal Bank!" »

September 9, 2008

Fannie Mae and Freddie Mac - Flattened by the Credit Crunch?

Life used to be very simple in small towns across the US before the so called "Credit Crunch" came forth…

Joe Buyer and his wife Kim Buyer have a kid and want a new house to raise a family.  On a Tuesday afternoon they meet with their local bank’s loan officer, who stamps his approval on a mortgage that Joe and Kim may or may not be able to afford.  The loan officer forwards the loan to his bank’s treasury department, which eventually flips the loan to the Federal National Mortgage Association (affectionately known as Fannie Mae).  The cash proceeds from the sale of the loan are used to make more loans to other Joes and Kims.  The profits from all of these loans are used to purchase “safe and stable” investments—like Fannie Mae preferred stock.

Continue reading "Fannie Mae and Freddie Mac - Flattened by the Credit Crunch?" »

August 25, 2008

Mobilizing Remittances for the Unbanked

Every year millions of people leave their home village, city or country in search of better opportunities. Often, family members are left behind and depend on periodic payments from loved ones abroad to survive. Conventional remittance programs are often expensive ($15 to $20 per transaction) and usually require a trip down to a money transfer agent like Western Union.

This traditional process works well and workers abroad are able to provide for their families back home. But I think the time is ripe for the remittances process to leverage cost efficiencies and ubiquity of mobile and internet technologies.

Continue reading "Mobilizing Remittances for the Unbanked" »

August 19, 2008

Cutting Carbon and Costs with Green Computing

The perception of Green initiatives, once considered “feel good” activities suitable for the occasional press release, have markedly transformed in recent months.  Now, organizations are keen to implement Green IT initiatives across the enterprise as going Green is both environmentally responsible and, more importantly, fiscally responsible.  Green IT efficiently utilizes computing resources meaning not only a reduced carbon footprint based on a reduction of energy requirements but also a decrease in total energy usage.  With the skyrocketing prices of energy, Green IT is a no-brainer for many organizations.

Continue reading "Cutting Carbon and Costs with Green Computing" »

August 13, 2008

Keep Your Head in the Clouds

You know the drill.  Buy (probably) expensive new software, download or insert into disk drive, install, and voila you now can crunch numbers, edit photos, create videos or do any number of things on your computer.  The key words there are “on your computer”, the software is localized—yours, and will be until you delete it.

Continue reading "Keep Your Head in the Clouds" »

August 6, 2008

A Green Challenge: Environmentally Friendly IT

A few years back, being Green meant you participated in recycling programs, commuted to work on your bike when the mood struck, and considered purchasing a hybrid but balked after filling up your SUV for a mere $50.  Now, in 2008, Green, once a buzzword, is a member of the world’s lexicon where the environmental impact of an activity is hugely important.  Too, with rising fuel and energy costs, going Green is not only an environmental choice but also a sound fiscal choice.

Continue reading "A Green Challenge: Environmentally Friendly IT" »

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. 

Continue reading "Wi-Fi On Steroids: The “White Space” Debate" »

July 28, 2008

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 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.

Continue reading "Sharing Best Practice in a Flat-World...." »

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.

Continue reading "Tantalized By Twitter" »

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.

Continue reading "SEPAration or Unification: The unfolding story of Single European Payments" »

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.

Continue reading "Will the 3G iPhone Mobilize Your Banking?" »

July 8, 2008

It's All Semantics: The Evolving World Wide Web

The other day I was on, 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?

Continue reading "It's All Semantics: The Evolving World Wide Web" »

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, 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!

June 25, 2008

You've gotta get it !

A modest stab at revisionism (with poetic license from Sir Paul)  

                                     You've gotta get it, mm-hmm
                                     You've gotta get it and you’ve gotta get it good
                                     And that's that,
                                     Unless the world is flat.

Thus sang Paul McCartney in his hit single Get it, released in 1982*. Sure enough, the world of the day was anything but flat. 

In fact, the concept of a flat world had been unthinkable, at least since the pre-Copernican Flat Earth notions had been firmly put to rest centuries earlier. The fall of the Berlin Wall and the forbidding Soviet socialist republic were a decade away. Deep in the throes of Cold War posturing, a hapless citizenry had come to distrust - even detest - technology. Perhaps most emblematic of technology in the popular mind of the time was each side in the Cold War boasting about how many nuclear-tipped missiles it had trained on the big cities of the other side.  The mere thought of such large-scale destruction was enough to break a cold sweat on the brow of the bravest among us. And it was deplorably wasteful that the best technology – whether hardware, software or brainpower - of the time should be devoted to war games that managed to be at once puerile and petrifying. 

Technology’s reputation was at its nadir. And so, it was hardly surprising that one of the big topics of public discourse during the year 1983 was George Orwell’s novel 1984, with its fictional tale of a totalitarian regime using technology to deny the populace the freedom of action or thought. It is a commentary on the mood of the times that people were almost convinced that those events would unfold the following year, and awaited the dawn of the year 1984 with great trepidation! 

Technology in the flat world: from pains to paeans
A quarter of a century later, technology - particularly information technology (IT) – has taken on much rosier hues. It has been both a cause and a beneficiary of the flattening world. To better appreciate just how technology has benefited everyday life, let us consider its impact on just one industry – in fact, Sir Paul’s own industry of musical entertainment.

Continue reading "You've gotta get it !" »

June 17, 2008

Second Life - Staying connected

Amy, from your Dallas office, is running late.  You look around the boardroom, nodding at the collection of figures around the room.  India, the U.S., the U.K., Brazil, Mexico, all are represented.  Amy finally strolls in, apologizes for being late, and begins a discussion on next quarter's sales forecasts.  Smiling you tug on your pajamas, take a sip of tea and relax comfortably in your home office, letting your avatar wear your suit for you.

Continue reading "Second Life - Staying connected" »

June 12, 2008

The flat world rebound effect?

While technology offshoring and outsourcing become mainstream for innovative companies and firms continue to push the envelope on the "more for less" mantra, I can increasingly see the pattern of the rebound effect playing out in the world of technology services sourcing. The rebound effect in economics theory argues that demand or consumption typically increases when efficiency improves and unit costs go down.

Continue reading "The flat world rebound effect?" »

June 11, 2008

Enterprise Risk Management- Where are we?

Few days back, I had the opportunity to attend one web-session on ERM where overall dialouge was based on the recent ERM - 2008 survey (click here for presentation). Organizations from different sectors had contributed to this survey. I was completely perplexed on some of the findings and could able to conclude why the corporate governace standards of many organizations are weak and fragile. If I look back at that one hour, there are three factors which seem to me the culprits behind the failure of ERM and subsequent governance debacle. I would call them as - Executive Block, Operational Block & Infrastructure Block.

Continue reading "Enterprise Risk Management- Where are we?" »

May 29, 2008

An Inexorable March Towards Simplicity

Technology makers continue to work hard to make their products easy to use

Humankind's innovative prowess, particularly in the technology space, has seen a peak in the current decade that is perhaps unprecedented in history. Whether corporate technology buyer or inveterate gadget freak, we have happily been inundated by a cornucopia of ever newer and more sophisticated products, delivered by the rich pipelines of technological innovation.

Much of this innovation is powered by the advances in electronic circuitry engendered by Moore's Law, which allows ever more functionality to be stuffed into ever more compact packages. This phenomenon is evident in just about every technology product, from cell phones to cameras to computers.

However, the above recipe does not automatically translate into ease of use. In fact, it may be argued that rising complexity and sophistication militate against simplicity. Wrapping ever-growing complexity in an envelope that is simple and easy to use is indeed a task of daunting proportions. The world has changed dramatically since the early 20th century playwright Bertholdt Brecht wrote, " is simplicity that is difficult to make", but those words echo as true as ever.

Yet, it is plain that simplicity and ease of use are values that every maker of technology products must diligently strive for. And there is good reason to believe that in a flattening world, the move towards simplicity is gathering steam.

As we have seen earlier, products that are truly born in the flat world are designed to fit in organically with the user's need. These products tend to be created via unplugged approaches to innovation such as co-creation, and are thus more intuitive and easy to use. The flattening world also brings in a large number of new users who are likely to be less sophisticated, and to demand simplicity and ease of use.

The speed of information flow in the flattening world too has a role to play here. Early users of a product quickly share experiences using blogs and other social technologies, and a few bad reports on any aspect (including usability) can sound the death knell for a new product. The channels thru which consumers hear about new products are faster, and those consumers are less willing to devote time to learning how to use a product.

Prompted by these realities, I had written elsewhere in January 2007 that the defining technology trend of 2007 would be simplicity. Let's look at a few developments in the technology world since then, and whether technology did indeed get simpler.

Continue reading "An Inexorable March Towards Simplicity" »

March 14, 2008

Born in the Flat World: Bringing new products to life in a hyperconnected world

Or: If you build it, will they come?

As I've written earlier, in the lexicon of modern-day business, innovation and isolation are firm opposites. The most successful companies have embraced unplugged approaches to innovation, which seek to allow the judicious flow of information, ideas and insights across what would conventionally be watertight walls.
Unplugged approaches epitomize how innovation happens on our ever-flattening and increasingly hyperconnected planet. Innovative new companies such as Innocentive have  even built a business model around helping such unplugged innovation thrive.

But let us pause to dwell upon the fate of the new products being birthed thus.
Across industries, the mortality of new products has traditionally been high (as high as 60%, or even higher depending on which source you consult). Clearly, new product innovation is fraught with risk.  Can unplugged approaches to innovation help ameliorate this risk?

I believe they can – particularly those that emphasize blurring barriers with customers, such as Co-creation and User-centric innovation.  These approaches to innovation posit that you should begin working with customers long before the new product is complete. They obviate the conventional need to have a complete product before coming to market, instead allowing the product to evolve in the direction of a more organic fit with customer needs.
In other words, rather than assume if you build it they will come, these approaches take the more pragmatic route of saying, if you invite them (customers) to help create the product, maybe they’ll use it!

Continue reading "Born in the Flat World: Bringing new products to life in a hyperconnected world" »

February 1, 2008

Mind the Gaps – 500 executives share Flat World insights

Infosys recently released a survey of 500 business executives on the impact of, and responses to, global trends. The report was written in co-operation with Economist Intelligence Unit. In case you have not read it, check out here

Continue reading "Mind the Gaps – 500 executives share Flat World insights" »

January 28, 2008

Big Opportunities

In his recent blog post from Davos, Nandan Nilekani stated, “Clean energy presents a big opportunity – you may even call it a profitable opportunity,” and that solving the issues will require public-private partnership.  He also highlighted that many of these issues are interrelated, so we have to think about them from multiple angles (such as biofuel demand’s impact on food prices). And Kris Gopalakrishnan shared his thoughts on whether Web 2.0 technologies have made innovation democratic, blurring company hierarchies and boundaries. 

Putting these thoughts together, what emerges is a case for using collaborative innovation for solving some of the biggest issues facing humanity – issues such as climate change, food security, basic health and education. 

As Kris pointed out, the advent of the Web 2.0 technologies is changing how we work and collaborate.  And as we master these collaborative technologies, it will be only natural, and expected, that we use them to help solve our biggest issues. 

As we design these collaborative mechanisms, we should keep three points in mind:

Continue reading "Big Opportunities" »

January 13, 2008

NANO - Innovation in Automobile

On 10th of Jan 2008 the world saw the launch of the cheapest car, not from Japan or Detroit (who are know as the technology leaders in automotive), but from India. This car is not only going to revolutionize the automobile industry, but also the entire manufacturing industry. This car is going to be an inspiration for many  and is the best example of Innovation and optimizing cost to fuel growth.

The company undertook the transformation journey few years back when it saw huge losses of $110 million in 2001 and today is set to change the rules of the game with the introduction of Nano. The learning from this is that Impossible is Nothing and companies need to constantly innovate.

Continue reading "NANO - Innovation in Automobile" »

November 5, 2007

The Next Big Innovation in the Automobile Industry...

I am not sure I need to contribute yet another piece on the 'greening' efforts of the Global Auto industry, but let me try!

We have read numerous news-articles on the efforts by the major manufacturers to launch hybrid cars over the past couple of years. I am aware of a few models from Toyota that have hit the roads and seem to have found a strong 'green' franchise. General Motors, the largest car manufacturer worldwide (yet, with Toyota nipping at its heels!), has announced grand plans to launch an 'unplug-and-drive' electric hybrid, aptly called the Volt.

Continue reading "The Next Big Innovation in the Automobile Industry..." »

October 2, 2007

Outsourcing Outsourcing - The World is Flatter than you think


The September 24th issue of New York Times was interesting and eventful. There were ofcourse detailed reports of all the happenings that day in the city and nation : the visit of Iranian President Mahmoud Ahmedinijad, India at 60 celebrations, the deepening mortgage crisis in the US, the usual political drumbeats before the 2008 elections,etc. But interestingly, the entire page 4 was dedicated to describing the Twenty-Twenty cricket world cup – a new brand of instant cricket that has become increasingly popular not only crossing countries in its entertainment value but also crossing genders. Yes, the women like this game as much as the men (as the article reported). Will it be successful in America? Time will tell. However, an even more interesting article was on the bottom of the cover page : "Outsourcing Works and So India is exporting jobs"

The author here described how companies like Infosys are having many American graduates fly in for a novel experience – A six month training in Bangalore followed by assignment options anywhere in the world including back in America.. AMR Research this week has written about Indian companies setting up numerous near-shore delivery centers in US time-zones. India is outsourcing outsourcing.

As luck may have it, this week, I was called by our academic relations team to present to the students of Georgia-Tech, a top engineering university in Atlanta, US and talk about the same program referred to in the article above on why it would make sense for these students to consider Infosys as a career option for internships or full-time assignments. We presented on how the world is flattening and it is important for the students of today to get India/China assignments early in their resumes. The audience itself was an equal mix of students of Chinese, Indian, European and American origin. At the end of the presentation, one of the American students walked upto us and enquired about full-time positions for Americans in our China office. He mentioned that he had already done 3 years of undergrad in China, completed his graduation in the US and wanted to go back to get some experience in China, India, East Asia and Australia before coming back to the US. The experience he said would be invaluable for the rest of his career. We had all along been preaching to the choir! I don’t know if Georgia-Tech was the exception but students today are gearing up fast to deal with the flat-world. Programs like the one Infosys has instituted is accelerating this awareness.

Coincidentally, one of my clients, a senior business-IT executive of one of the most successful CPG companies in the world was visiting Georgia-Tech along with his CEO to deliver an inspirational talk to the students there on how compelling their value proposition was for potential career aspirants. He mentioned that even they could not beat the Infosys proposition of providing emerging markets and global delivery experience early in the career in capsules like we had structured.

This CPG company is a true flat-world company and the senior IT executive felt that emerging market and global delivery experience was an imperative for all their leaders, not optional at all. Young students and progressive companies are all adapting fast to the flat world, faster than you think. They are getting ready for the future. Are you?

September 27, 2007

Information (a)symmetries in new product introduction

by Kannan Amaresh

I was encouraged by the responses to my earlier post to share further views on the subject of new product introduction, especially those focused on individual consumers. It's about "information asymmetries".

In a flattening world, one of the aspects we talk about is how information asymmetries are going away. If as an enterprise you are clued in to this aspect, you will realize that even your prospective customers are watching your product launch, reviews and so on. Increasingly enterprises will find it difficult to take advantage with information asymmetries even though the product was marketed to a particular geographic or market segment.

We all know how that iPhone introduction was watched on the web by millions of prospective clients. Now with the price reduction done, perhaps without sufficient substantiation [you can read Apple's open letter and make your own conclusion], it looks like a perfect mis-reading of the market, by those who are already iPhone owners and the prospective ones.

Here is my thought – assume I want to buy an iPhone for $399.  At what level of confidence will I be buying this, knowing the established precedence of a potential price reduction of another $100 in about 3 months?

Continue reading "Information (a)symmetries in new product introduction" »

September 20, 2007

New-economy products with old-economy mindsets

by Kannan Amaresh, Banking Domain Competency Group 

Two recent news items caught my attention.  One, new product introduction of a $20 multimedia handset for Indian Market by a firm from Netherlands and the second one, about Apple iPhone price reduction in the US. While these two may not appear to be connected, they are. For one, Apple, though being a new-economy company, appeared to be following an old economy style of product introduction – initially skim the market with novelty and charge huge premium.  Then with the first round of skim over, push the product broader market to sustain demand.  On the other hand, here is a Dutch firm at the outset bringing out a product for $20 – imagine the potential of marketing this in developed markets for, lets say $50 or so – what will be their margins? Of course this is a very simplistic comparison.  However it brings out the point that enterprises in todays world (more of a flattening world) need to price their product and services while taking global demand and market into account. No longer can you adopt such skimming of the market technique and wait for the consumer base to be loyal to you.

I also went into a lengthy discussion with one of my colleagues around various hypotheses on cost and value curves and how an event like a sub-$25 multimedia handset can trigger cascading impact. Little did I realize that Google, without being in telcom space have revolutionized search marketing and now seen as a powerful mover of consumer business -- imagine if the hardware is this cheap, what would be the potential?  No wonder Google wants to get into the Spectrum business.

Introducing Kannan Amaresh

I have asked Kannan Amaresh to share his thoughts on this blog.

Kannan heads the Banking Domain Competency Group at Infosys.  He has over 14 years of professional experience in the field of banking and financial services.  He has been a consultant with some of the leading banks in the US, Canada, Germany, UK and Australia.  Kannan is the author of several thought papers and has been an invited speaker several prestigious industry events hosted by the Financial Times and academic institutions such as University of Cambridge.

September 19, 2007

"Why Robert Reich is Wrong About Corporate Social Responsibility"

An interesting HBR viewpoint from Mark Kramer about CSR.

Mark Kramer is the co-author, with Michael Porter, of the McKinsey Award-winning Harvard Business Review article, "Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility." 

One of the reasons that CSR is different today than a few years ago is the availability and access to information.  Easy information access makes it easier for consumers to form opinions about responsible (or irresponsible) behavior of companies: Imagine all that gets written about known and "not so well known" corpororate activities in personal blogs and discussion forums.  

While only a small percentage of people will translate their opinions about companies into purchase choices, their opinions will have a substantial impact on the company's brand perception.  It would also have an impact on recruitment and retention.  It is never fun to have to defend your employer's behavior to your friends and family.  

Mark Kramer talks about direct business benefits of CSR and how it is a business reality.

Maybe a better word for "CSR" would be "Corporate Responsibility", because it is not merely "social" any longer.

August 13, 2007

Update on Innovations in Retail Banking and Consumer Lending

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. 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): 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, 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!

July 19, 2007

"The report of my death was an exaggeration"

So wrote Mark Twain after learning that a reporter was sent to investigate whether he had died.  I was reminded of this quote after reading the latest in a recent spate of articles predicting the decline of India as the leading global sourcing destination.

Citing unnamed "experts" the article, like others of its ilk, blamed wage inflation, hidden costs, and rising demand for skills as the reasons why companies are pulling out of outsourcing relationships or shifting offshore operations from India to "newer" locations. 

There are a number of problems with this line of reasoning.  First, it assumes that global services market is static and cost-obsessed and that the labor arbitrage model will always rein supreme. 

Certainly, cost reduction is and will remain a principal goal driving companies to move IT and business process activities to offshore locations.  But, it is not the only reason.  Establishing market presence or supporting local business activities in emerging economies are among the others, as is the need mitigate geopolitical risks.  Companies also look to different locations for local knowledge and linguistic and cultural reasons, e.g., to serve East Asia markets from China or EU countries from Central Europe.

Continue reading ""The report of my death was an exaggeration"" »

July 16, 2007

Innovations in Retail Banking – Part 2

I was quite overwhelmed by the comments to my earlier post, here as well as offline! Most readers agreed that digital alternatives to cash are becoming prevalent. Many also alluded to the so called ‘unbanked’ segment of society and what service providers are doing (or need to do) to enlist them into the mainstream. That thought is an interesting lead into what I wanted to post as a sequel!

According to a 2004 Federal Reserve Board study, nearly 10 percent of American households are unbanked! One would assume that a developed economy like the US, with Banks at every street corner, would not suffer from such a glaring deficiency! It is this underserved segment that is now becoming the focus for some of the large financial institutions.

Continue reading "Innovations in Retail Banking – Part 2" »

July 5, 2007

Outsourcing Myths and Secrets

by Stephen Lane

I've been thinking about a recent Wall Street Journal article titled "Seven Myths About Outsourcing" (subscription may be required).  Basically, it is a cautionary tale that's been told many times in outsourcing circles.  Last year an outsourcing advisory firm also wrote a report along the lines of something like "the seven secrets of successful outsourcers".
Five years ago the authors could have written the same article about CRM and before that ERP.  We all know quite well that every business/IT trend follows the same path.  Gartner hit the nail on the head when they came up with their Hype Cycle.

True, vendors sometimes over-promise, but the problems in many outsourcing cases are due to failure to properly plan by the outsourcer -- that and a lack of dedicated program management.  Many first time outsourcers jump onto the bandwagon with visions of huge cost savings.  What they fail to realize is that if they don't have a good sense of their internal operations, they won't know what they are outsourcing and can't manage it well enough to get the desired savings. 
The moral of the story is that outsourcing is a strategic activity, one that requires planning, partnering, and a strong sense of internal processes and costs.  It also requires executive leadership, stakeholder buy-in, and dedicated ongoing management, which is the same for any strategic undertaking.  In raising these points the article is actually quite positive.  If anything, we and the other offshore vendors should be thanking the authors for pointing out what to most experienced outsourcing practitioners is obvious. 

The main problem that I have with the WSJ article is that it follows the recent trend of using the terms outsourcing and offshore interchangably.  The same myths have been and continue to be applied to domestic outsourcing, e.g., the old "your mess for less" approach that led to headlines a couple of years ago about dissatisfaction with outsourcing in general. 

True, the offshore approach does include a cultural wrinkle, which is one reason, but not the only reason why some our most advanced sourcing clients travel to India and other sourcing locations between 3-5 times annually to meet with us.  That kind of dedicated management and attention to relationships yields results.  So does experience, which is another point the authors make. 

June 19, 2007

Innovations in Retail Banking – Part 1

I have been having conversations with many Banking Industry executives on the Retail side of the business over the past couple of weeks. I was struck by two industry innovations, at either ends of the spectrum – one, impacting sophisticated and well heeled customers; the other, addressing the traditionally underserved segments of the market. I will talk about the first trend here today and cover the second one in a subsequent blog.

How you pay for your purchases - whether at the neighborhood grocery or at a restaurant for that fancy Saturday evening dinner or even online, buying your favorite pair of jeans - has profound implications on the entire transaction value chain. The ‘consumer payments’ area, which is industry jargon for what I just described, is ripe for change!

What we all know: Over the past decade, cash ceded its preeminent position to credit, particularly for large-ticket transactions – there have been varying adoption rates of credit cards across countries, but they are here to stay; in the past 5 years, debit cards have seized significant turf from credit cards and have penetrated what the industry calls the ‘micro-payments’ segment, which are in the nature of smaller, diurnal transactions we make for ‘convenience’ purchases!

Continue reading "Innovations in Retail Banking – Part 1" »

May 28, 2007

Network Based Business Models: Another Step Further

Kris Gopalakrishnan, CEO Designate of Infosys, recently observed: "The computing horse-power within the largest of firms has been outpaced by what is today available collectively at the fingertips of individuals." A testimony to true democratization of technology! In Kris' view, it is going to be a challenge for firms to catch-up; further, given security and confidentiality concerns, it may be a while before Web 2.0 applications (Read my previous blog here) are adapted to an "Enterprise 2.0" framework.

An ex-CIO Client of mine who is now examining independent business ventures told me that the Software-as-a-Service (SaaS) business model could accelerate adoption of Web 2.0 by Companies. SaaS is about hosting business critical IT applications off-premise, outside the firewall of a Company and charge based on usage or transaction. SaaS can bring all the latest and innovative Web based applications developed for individual use, into the enterprise mainstream by distributing (and thereby reducing) adoption and ownership risks.

Continue reading "Network Based Business Models: Another Step Further" »

May 25, 2007

Shrinking the expanding supply chain

By Badri Devalla, Sr. Principal, High-Tech and Discrete Manufacturing

Supply chains are lengthening as everyone knows - we are connecting far removed markets and suppliers, moving far more information (buying a car at a dealer in your zip code vs viewing models and building a personalized car online), and moving a lot more inventory over larger distances (So much so that there’s a Think Local movement gaining root in the left coast of the U.S.)

Continue reading "Shrinking the expanding supply chain" »

Analytics and Supply Chains

Badri Devalla, from our high-tech business unit, was recently discussing how the use of information in supply chains is changing. So I've asked him to share his thoughts on this blog.  

Badri is a Senior Principal for Infosys solutions for the High-Tech and Discrete Manufacturing industries.  He holds a Ph.D. in Computer Science from Texas A&M.  He is particularly interested in how companies use consumer information for better product, supply chain and customer operations.

May 24, 2007

Intuition vs. Analytics

Sandeep Dadlani's previous blog generated quite a bit of discussion (some on the blog and some 'offline') about relying on inuition vs. analytics to make decisions. In business, as in life, you never have perfect information (by that I mean complete and accurate information about everything you need to know to make a particular decision).

Whether you're trying to figure out your way through unfamiliar streets or trying to trade-off new product features, you are forced to make do with imperfect information. It could be that the needed information simply does not exist (or more accurately, it is not captured anywhere), or you don't have the resources to collect/analyze the information or you don't have the time to do it.

What if I were to restate Sandeep point: when does it make sense to seek (and invest in) better information and when does it not? IT professionals are adept at putting together 'business cases' for IT investments. What about business cases for information analytics? And how do those business cases change if the cost and management attention required for analytics becomes a fraction of the original estimate through the use of global resources and advanced technology?

May 15, 2007

Web 2.0 and The Network Based Organization

My previous blog on Customer Relationship (CRM) and Customer Data Integration (CDI) generated some interesting comments. While many industry insiders did agree on the importance of CDI and “putting the cart before the (CRM) horse”, there was healthy skepticism around the effort and investments involved in a potential CDI implementation – is it again one of those big, hairy, audacious monsters which puts organizations at risk during implementation?

Well, to answer that question simply, no, it is not. But let me not get into a spiel on CDI implementation; instead, let us take a detour and touch upon technological developments in the flattening world around us, which if leveraged in an organizational context, can significantly bring down the implementation efforts, costs and risks for complex technology programs.

My long time friend and colleague, Sandeep Dadlani wrote a blog recently, right on these pages, extolling the virtues of 'Linked In' and how it can jump start networking and collaboration even within a large and rapidly growing organization. Think about it, networking and collaboration tools on the Internet have figured out the art and science of connecting and integrating public data across a mass of individuals. These tools seamlessly and silently update, in real time, any changes in people's professional or personal lives, based on individual preferences. And here, we struggle to link silos of customer, employee or any other business critical information, when everything is right under our noses, within the firewalls of the organization!

Continue reading "Web 2.0 and The Network Based Organization" »

May 7, 2007

LinkedIn across the Extended Flat-World Enterprise!


“What if we had LinkedIn within the enterprise?” – asked the CIO of a large CPG company. Three different Fortune 500 company CIOs in the past two weeks have approached my team for help in the area of employee productivity, internal communications, company-wide collaboration,etc…. Coincidence? Lets look at similarities in these companies. These are large, high growth, successful companies who continue to add employees by the thousands every year, in different parts of the globe, organically and through acquisitions….The nature of their business (Retail / CPG) is such that the employees are operating in distributed locations. All three companies are known to be very employee-friendly.

So why did these companies simultaneously have the same problem to solve? Why the CIO?

Continue reading "LinkedIn across the Extended Flat-World Enterprise!" »

April 30, 2007

Cars: "Some assembly required"?

by Ajai Vasudevan, Automotive Solutions Practice Leader

When we sat down for lunch that day, it wasn't exactly the initial topic of discussion. But given the pressures on the North America auto industry, it was only a matter of time before the topic came up.

"How do we enhance our product development capabilities while speeding time to market and reducing cost," asked the engineering director of a venerable Detroit based Automotive Tier-1 supplier. While this happened several days ago, the words are still ringing in my head.

This is obviously the holy grail of automotive product development.

Maybe a day will come when customers will design their own cars - like they today happily "assemble" IKEA furniture at home.

That will effectively take care of at least part of the problem. However till that day of product development nirvana comes, more mundane solutions need to be found. Mundane? Very well! 

The Product Development process remains one of the most complex automotive business processes. It is everything that automotive manufacturing is not. It is iterative, it branches out and congregates, it runs over an extended period of time. In short, it is quite different and hence requires a different approach. 

The rapidly flattening world is opening up new vistas to innovate the product development process. Take Toyota as an example. While common wisdom conveys that there is an outflow of engineering jobs from the US, Toyota is turning the logic upside down. Its Design center in Detroit is hiring locally and growing fast. Toyota and Honda are opening new plants in the US and recently Kia announced opening a new plant in the US as well. It is remarkable that organizations based in developed economies are opening an engineering center in another developed country. What’s attracting Toyota? Talent. Experienced engineers who have spent a lifetime in automotive product development.

Another route is to leverage the global talent pool. Thanks to availability of connectivity, workflow tools and product data management systems it is now possible for an extended global team to pretty much act as one. This opens up the route to tapping a lower cost talent pool, running an extra shift and allowing the core team to focus on innovation.  And, in the process, if the team comes up with new product ideas for the global markets. Now that’s a way to the holy grail!

CIO performance criteria and product development

In the previous blog, Sandeep Dadlani talked about the need for CIOs to articulate a clear vision, to build a good team and build credible relationships with business.  Romil Bahl, Managing Director of Infosys Consulting, articulated similar sentiments when he said that newer parameters of CIO performance are increasing in importance while some of the traditional ones (such as technology expertise) are decreasing in importance. (see Role of the CIO in the Flat World).

Next, let me introduce Ajai Vasudevan, who is the the Automotive Solutions Practice Leader.  He has over 12 years of experience as a consultant, engagement lead and development executive for automotive and manufacturing companies, including a DSP, and Big 3 automotive major and a big 5 consulting firm.  Ajai holds a BS and MS in Mechanical Engineering and an MBA from the University of Michigan - Ross School of Business.

April 27, 2007

Flat-World CIOs need not understand technology


Marcus Buckingham, the author of the best sellers “Go Put your Strengths to work” and “Now, Discover your strengths”, was the opening keynote speaker at Sapphire – SAP’s annual event for customers and partners this week in Atlanta,GA. It was a packed keynote with no standing space left and it seemed that over 10,000 people were crammed in into Georgia World Congress’ main hall in downtown Atlanta. Marcus argued that individuals, teams and companies spend too much time focusing on improving on their weaknesses. What they should be really doing is focusing on their strengths and leveraging them instead. His study revealed that one question above all is key to determining the difference between successful teams and unsuccessful ones…. “Do you get the opportunity to do what you do best every day at work?”….If the answer is yes, then your team is likely to be successful. Marcus also argued that as children we already develop core strengths and weaknesses that are difficult to change so its best that we continue to work in areas that are best suited to our strengths.

Now lets apply this concept to the CIOs of Retail and CPG corporations. The question to ask is “What strengths do successful CIOs, lets call them Flat-World CIOs, bring to the table in todays dynamic enterprise ?”  What strengths are most needed in the job in the ever-changing flat world? Based on my conversations with several of these CIOs it all boils down to three core strengths

1. The ability to articulate a vision : For example, this successful CIO was promoted to run a business function, came back in 4 years to become CIO once he saw the IS organization falling apart. He articulated a clear vision to where he wanted to be in 2 years and has made such rapid progress towards his goals, he is regarded as a turnaround artist within his company. He could rally a fairly large IS team around him because of his vision

2. The ability to build a good team: This is not easy to achieve as most CIOs inherit a team already present. But one retail CIO has changed 18 of his 35 directors/VPs in the last 6 months in a frenzied movement to get top quality team members at the top. He strongly believes that a good team is the first step to getting anywhere with or without a vision. Jim Collins (Author of Good to Great) will agree.

3. The ability to build relationships with business : Infact CIOs who come from business are beginning to enjoy a level of credibility with business and getting buy-in far more easily on key business-IT decisions. Its interesting to  see if this trend continues.

You must be wondering, but what about technology? What about the tech-savvy CIO? While that’s an important aspect of the job and has tremendous advantages, I would argue that CIOs with the three must-have qualities described above  have figured out a way to get the right advice on technology and prove that they are successful without really being tech-savvy. They are working on their strengths that are most suited for the job at hand. Hence, as Marcus argued, they are likely to be successful.



April 25, 2007

CRM: Putting the Cart before the Horse

by Balaji Yellavalli, AVP, Banking and Capital Markets

The other day, the CIO of a leading consumer automobile finance company (which also offers other diversified financial services such as credit cards, banking, mortgage loans, etc.) told me that they cannot pull the data on an existing customer, say, a credit card holder, when she approaches the firm with a new transaction, say, a home mortgage or an auto loan. Something we would assume as the most simple or obvious thing that one can do in a post internet, hyper-connected, Flat World! These issues may not manifest as tangible or substantial cost escalations in the short run, but ultimately they are bound to add up and bring down customer profitability.

Why is this concept so difficult to implement, if its benefits are so patently obvious to me as a customer?

I see two main reasons. One, we all know very well: Financial services firms have grown through mergers and acquisitions over the past decade, which have brought "legacy baggage" with them.  Business processes, technology infrastructure, organizational politics, turf battles and sometimes even genuine customer privacy concerns have come in the way of sharing data across lines of business.

The other reason is not so apparent: Ironically, it is the evolution of a discipline and function called Customer Relationship Management (CRM) over the past decade or so.

CRM was purveyed as a panacea for integrating all customer touch-points and provide insights into customer behavior. For sure, CRM streamlined customer interactions. The call center or customer contact center, became a ubiquitous part of our daily lives, whether we wanted to add on a new service or to find out why we have been billed erroneously. CRM provided the glue to unify the front-end experience across both these channels and of course any other physical channel, like a bank branch or an ATM.

However, in doing all that, CRM has created for the organization, two new challenges.

Continue reading "CRM: Putting the Cart before the Horse" »

April 6, 2007

Of IT Matters

Recently, Sandeep Dadlani had shared his views on Flat World CIOs who are increasingly focusing on improving operations through the use of technology or global sourcing.  This week on "IT Matters", Michael Taylor talks about the "business alignment" of CIOs.

According to him, "Despite the lofty intentions of seeking alignment, perhaps a more pragmatic focus is to make IT relevant to the business."  He cites the 2007 State of the CIO survey which shows that CIOs who are aligned with business are twice as likely to have created a new revenue stream.

There was also a recent survey by Saugatuch Technology and BusinessWeek Research Services of C-level executives of companies with revenues of billion dollars or more, that showed that a substantial gap in IT performance assessment by IT executives' themselves versus non-IT executives. (Survey link, registration required)

As Michael points out, IT organizations should ask what they can do to make other executives jobs easier and improve the bottom line.

Read Michael Taylor's full post

March 29, 2007

Anti-Money Laundering: Bridging Regulatory Compliance and Data Integrity

by Balaji Yellavalli

I got many interesting responses to my previous blog stressing the role of technology “engines” in meeting emerging regulations related to Anti-Money Laundering (AML) and illustrating the collateral benefits of such moves on customer experience.

I envision two critical “calls to action” especially in the context of regulations such as AML, Know Your Customer (KYC) and others that keep popping up every time a new and perverse way to engage in criminal activity is uncovered.

One, financial institutions need a strong “Unified Compliance Solution” (UCS) approach to integrate seemingly disparate compliance-monitoring activities across global lines of business. A UCS approach not only helps in linking apparently unconnected transactions to establish a potentially suspicious pattern and file a “Suspicious Activity Report “(SAR) with the regulators. It reduces time for investigation and focuses staff energies in going after the “bad guys” as opposed to disrupting genuine day-to-day transactions. A UCS also helps in integrating customer data which could help in gaining better insights into customer behavior, for improving customer experience and ultimately, customer satisfaction.

Infosys’ experience with leading financial institutions has borne out the fact that while Regulatory Compliance may be the impetus for a UCS, it is not the end game. A well-designed UCS can be leveraged for competitive advantage and ultimately, for winning in the turns, based on superior customer insight!

I know a top Wall Street Firm that consistently outperforms the competition by combining regulatory compliance initiatives with customer data integration. It is in an enviable position today because of investing ahead of time in aligning and unifying disparate silos of organizational information across their global operations. 

The second call to action: it is assumed, when we discuss such topics, that the quality of transaction data generated by a firm’s systems is clean and reusable for further analysis. Unfortunately, it is not always the case.

As the complexity of transactions, coupled with their global spread increases, so does the scope for errors in collating and reporting. Independent studies by leading analysts have estimated that the business losses due to poor transaction data quality are in the order of US$1 billion to US$ 1.5 billion on an annual basis. It is ironical that financial institutions are actually losing money due to poor maintenance of data and information within their organization, far from making money from information! Hence, it is important to install strong data quality systems as an intermediate step before building the UCS engine.

March 26, 2007

Anti-Money Laundering in a Flat World

by Balaji Yellavalli

Recently, I attended a conference on “Money Laundering” in New York. I was surprised to meet more than 500 people representing banks, financial institutions and government agencies on a cold Monday morning to discuss a topic that one would normally associate with the underworld! Well, to be fair, the conference was to discuss the emerging regulations to curb Money Laundering or “Anti-Money Laundering” (AML) as they are collectively known.

How is AML relevant in a Flat World? Well, just as there are benefits of the flattening world, there are unscrupulous elements in society that take advantage of business and technology advances to perpetrate financial crimes. Money laundering is potentially the tip of the iceberg – it may be a conduit that feeds into international corruption, drugs and in the post 9/11 world, terrorist financing. In other words, fraud can be an unanticipated outcome of the Flat World, if regulators and the private sector do not work together in a timely fashion to detect and weed out the bad elements of society.

Interestingly, this conference was the sixth or seventh in an annual series and elicited active participation from well-known top tier global banks and investment firms as well as US regulators from Washington DC. A leading Swiss Bank executive said on a panel that they use “Artificial Intelligence” based algorithms to sift through terabytes of customer transaction information to detect suspicious patterns and uncover potential wrongdoing. At the same time, the bank maintains the classic “Swiss” tenet of privacy and customer anonymity. Well, I can imagine how difficult and complex it can get!

I may be wiring some money from the US (where I live) to India (where I was born) to invest in a holiday home for the family. I may have done that after juggling my savings, e.g., selling a portfolio out of my retirement accounts or liquidating my time deposits held with US banks. So how do the regulators and banks ensure that this is a genuine transaction? Do they know that I am just an innocuous consultant working for a large global professional services firm or a front for some other suspicious person or transaction? Not to scare you, but it illustrates the challenge government agencies and financial institutions face in linking the myriad, seemingly ordinary transactions that people conduct in the course of their daily lives, to suspicious and potentially dangerous activities.

The challenges can be a minefield, fraught with financial risks for banks and financial institutions.

Now, going back to the Swiss bank illustration, it is about mining existing customer transaction data globally and across the enterprise to uncover patterns; how does one go about doing that?

Continue reading "Anti-Money Laundering in a Flat World" »

March 22, 2007

FlatWorld CIOs: Bringing Discipline to Innovation

Consider this: Apple is credited with one of the best product innovations: The IPOD. Apple has one of the lowest R&D spending as a % of sales. It prefers to keep $12 Billion in cash instead. Now consider this: several underperforming consumer product companies today directly blame their lack of performance to their lack of direct investments in R&D and Product Innovation. My friend and colleague Sanjay Saigal, ex-Unilever and Sr Principal in CPG Solutions says “It’s not about innovation, It’s about a process of disciplined and profitable innovation with a clear method of getting a healthy payback on the (total) investment”…..”Aha, I exclaim, I have met a few CIOs who have been doing this for ages!

The IT world has always struggled to articulate the value of its investments. CIOs have been beaten up by the CFO and forced to produce detailed business cases. “Why do you want to standardize the platforms? How much will that add to the bottom-line?“ – the CFO asks. At the same time, certain company CIOs have developed strong processes within the IT organization to justify investments in new business-technology ideas and gained the confidence of the CFO. These forward-looking CIOs, lets call them Flat-World CIOs, are defining a path of discipline in their own world of innovation. The business world, CEOs, COOs and CFOs should take a leaf out of our flat-world CIOs books on how to manage profitable innovation across the company.

The CIO of a large midwest-based retailer has instilled a rigorous discipline of business cases in every IT project that his large and extended IT organization undertakes… and I mean really elaborate business cases. Tremendous thought and brainstorming goes in with senior business and IT leaders in the same room in detailed debates on how to quantify benefits and costs of a particular initiative. So whats new?…it’s the rigor and discipline of filtering and managing Business-IT ideas. The sheer effort that goes into their projects is sometimes frustrating for the stakeholders involved (including us) but looking back at the projects undertaken there in the last 4 years, I can say that it works.

“We have plenty of fantastic business ideas…our challenge is figuring out which ones to execute and how to execute” -  the CIO of a large and successful CPG company explained. “So we can keep discussing these ideas but we have to put hard numbers against each and then quickly decide which ones to do and get them done…and forget about the rest of the ideas for the time. The funnel has to narrow down quickly as the clock is ticking”.

Another Retail CIO has instilled a fantastic portfolio management strategy (something that actually works) for new projects defining checkpoints or gates at key junctures which are important to figure out which projects are to be abandoned and which ones to be taken forward at every stage of the project..

That does not mean all CIOs do is to make the process difficult and the ideas that survive the rigor make it through while others suffer. Some CIOs have developed an intuitive knack of evaluating new ideas...Almost like venture capitalists.

For example, some CIOs I met in the last 4 weeks have been excited by a joint solution offering from Infosys and MediaCart geared towards improving consumer connects and enhancing shopper experience. Essentially what we’re talking about is a smart shopping cart that knows where it is, where it’s been and what’s in it, and can interact with the shopper by means of a forward mounted LCD display and push button interface. By providing the ability to deliver context-relevant content when it matters most, and supply basic shopping assistance such as “find item” and expedited check-out to every shopper, the solution gives retailers and manufacturers the ability to do things for the consumer at the point of purchase that they have not been able to do before. It is a win-win business model for shoppers, CPG (manufacturers) and retail organizations alike.

Given the power of this idea and the low cost of piloting it, this has received instant encouragement and pilot sponsorship from CIO’s…. faster than I would have initially imagined. No rigorous business-cases here since the benefits are clear.

All the above mentioned CIOs are raising the bar for the prioritization, filtering and focusing process for IT. There are failed projects once in a while, but the key is that the portfolio management and process management strategy helps ensure overall success. The companies above are known for their technology-led business innovation in their own industries. The rest of the corporate world should take a page or two out of the discipline and process that these flat-world CIOs have inculcated in their innovation eco-system.



March 16, 2007

The Future of Consumer Lending

by Balaji Yellavalli

My past couple of blogs on peer-to-peer lending and the innovations driven by that model seemed to have generated some interesting debates; some folks did agree that information is the currency of the new economy with e-bay like models becoming main stream. Another school of thought felt that such business models may not prove to be a significant threat to traditional Financial Services firms.   Let me try to address the latter view here by broadening the landscape a little bit.

With the US mortgage market being what it is now and even unsecured “managed” loan portfolios across various hues of lenders – from Banks to Credit Card Issuers - under pressure, there are clear signs that the sub-prime borrower (borrowers who present higher credit risk) will no longer be courted by large lending institutions.

There are two consequences of this: One, the sub prime or marginal borrowers will still need money (more than 40% of loans disbursed over past one year have been in some kind of sub-prime category) and increasingly they will turn to peer-to-peer lending vehicles. So if I am a lender who has the appetite for risk, I will probably lend at a usurous rate to these marginal borrowers, live with the risk of defaults and may be even make a net recovery, post charge-offs, higher than traditional investment channels. 

And the kicker is that I will pick my data elements, make my own informed decisions, demand more transparency and get it from companies like Prosper! (See previous post on this).  As time progresses, I will settle into an equilibrium and may be even diversify to other channels.  But the point is that I will go with a vehicle that provides me a frictionless, transparent platform to build my own risk-reward model!

The second consequence – having said that sub prime borrowers will be forced out of the organized market, there are still loads and loads of sub prime portfolios, which have been turned into mortgage backed securities by hungry investment backs, to feed an even hungrier beast called the hedge fund industry!

So what will happen to these as defaults start hitting the roof?

We are already seeing a domino effect of investment bankers trying to get these securities off their books or revoking purchase contracts with loan originators. But what if peer-to-peer sites find a way to securitize loans? Leaving aside regulatory implications, what would be the impact on the market? Hordes of “private” or individual investors would probably flock to such a portal to diversify their risks and, as transaction sizes increase, may be even larger hedge funds, who anyway do not want to invest in all that big, hairy IT infrastructure would jump on to the band wagon!

I was hence not surprised when the client CIO in charge of e-Commerce for a large Bank mentioned that peer-to-peer business models are the biggest threat to the traditional, organized financial services industry!

May be the day is not far when we will have Prosper and YouTube tying up to post videos of I-Bankers, Private Equity biggies and Hedge funds, pitching for selling or buying their portfolios – a truly Flat World scenario and what is more -  they will stop circling the Earth in their private jets and may be contribute to a Greener World, not just a Flat World!  

March 14, 2007

Innovations in Consumer Lending

by Balaji Yellavalli 

After my previous blog, many people asked me why I think “peer to peer” lending models are the harbinger of the Flat World in consumer Finance and Investing.

Well for one, this is financial democracy and micro-credit at its best, where borrowers and lenders share information free of cost rather than pay for it! Relevant borrower information content is “pushed” by the borrower herself (albeit vetted by an intermediary, but they do not charge the lender or borrower, instead make money off the completed transaction) to the lender and the lender, in turn, gets to pick and choose the jig-saw of data elements relevant to her risk profile.

While disintermediation was brought to us by the internet, business models like peer-to-peer lending have broken down traditional barriers to entry into lending and investing, flattened hierarchies of decision making by simplifying the rules of the game through intelligent configuration and eliminated knowledge and information asymmetries (In the US, another prominent Insurance Company has popularized such e-simplification through its “Even a caveman can do it” series of ads!).

I do not have to be a qualified banker or a credit analyst at a credit card issuer to make a decision on whether I want to lend money or not, sitting right in my living room! Sure, I am risking my money, but I am risking that at my terms! One could also call this web 2.0 for a Flat World – more about that in a later blog.

Secondly, this is all about building loyalty through innovation as opposed to the traditional “stick-with-us-because-we-offer-superior-service compared to the competitor round the block.” Business model innovation is attracting a distinct category of borrowers and investors, who keep returning, based on their positive experience. I talked about the borrower who wants money to re-invest in Prosper – that to my mind is a great example of loyalty harnessed through innovation!

Bank of America conceived a unique “Keep the change” program , based on matching the spend from a checking account upto a certain limit in the first year and adding that to the customers balance – a cool way to pay back the customer and promote new checking accounts rather than offering “free checking” or “free ATM access” which its competitors do.  ING Direct is another example of harnessing Flat World innovation to grab market share in a lugubrious market for Time-Deposits.

And finally, peer-to-peer lending is a Flat World story, because it offers a great way to race ahead of competition when the industry is down, essentially enabling the Financial Institution to win while its competition copes with industry downturns.

Peer-to-Peer Lending in a Flat World

by Balaji Yellavalli, AVP and Head of Solutions, Banking and Capital Markets Business Unit

Recently I visited a website called, a site that calls itself “The online marketplace for people to people lending”. Simply put, it is the e-Bay equivalent of consumer finance wherein people who want money post their need on the site and willing lenders then bid to finance all or a portion of that debt. But the simplicity should not be mistaken for the sophistication that lies under the covers.

The prospective borrower lists his or her credit rating (determined by the company, based on past repayment behavior of the person, credit reporting agency evaluation, etc.), debt to income ratio and the interest rate he or she is willing to pay and the purpose of the loan or where the funds are expected to be deployed.

Add to this, other bells and whistles, like the ability to build a portfolio of “units” of debt across categories of borrowers (I believe the minimum unit is $50), or lenders’ ability to pick a combination of risk (e.g., pick only homeowners AND those with verified bank accounts). The company makes money from commissions or transaction fees, akin to e-Bay. Right now, it is a site open only to US Residents. I have heard of another site called which serves the UK market.

I think this model offers a glimpse into the future of consumer lending in a Flattening World! I would go so far as to say that this is the emerging model of “peer-to-peer” investing in the Flat World– apparently, some companies are using rates of return for certain risk categories to benchmark returns from other classes of investments, including mutual funds, hedge funds, ETFs etc!

Peer-to-peer lending may not be a big force today in terms of transaction size, volume or market share. With loan sizes on Prosper’s site ranging from $5000-$15,000 and a most recently reported annual revenue figure of less than $2 million, it is at best a micro-player. But the fact of the matter is that it is creating a non-traditional and sustainable channel for marginal borrowers or borrowers whose end uses may not be justifiable for a traditional unsecured lender like a credit card issuer. One borrower wants to repair frozen pipes in his home, the other wants to consolidate high cost credit card debt…and hold your breath, a third wants to reinvest in the company, borrowing others’ money!

Peer-to-peer lending is attracting a distinct category of borrowers and investors, who keep returning, based on their positive experience.  It offers a compelling model with the potential to challenge established players in the so-called “sub-prime” lending space.  No wonder that a client of mine, the CIO in charge of e-Commerce for a large Bank, recently mentioned that business models like peer-to-peer lending are the biggest threat to traditional, organized financial services industry!

Customer Experience, not merely Customer Service

I have been discussing the topic of innovation with different executives in Infosys this week.  And one thing that comes across strongly in these discussions is that companies need to focus more on improving customer experience.  Many are improving call center service levels, others are enhancing product attributes, but very few are actually looking at what customers want and designing their offerings with that as the primary objective.

For example in telecom, how can service providers transform my experience as a customer with their service?  How can they add personalized service so that I no longer think of them as dial-tone providers but service providers?  When I travel from Bangalore to San Francisco, my service provider already knows that I am in SF based on my cell signal.  Why not automatically turn off the ringer at night for all calls except for emergency calls from family, so that I am not woken up by people who didn’t know that I am in a different time zone?  Or, why not have a recorded message saying that it is 3am my time and ask whether the caller really wants to wake me up for the call?  Or, from a corporate perspective, why not use location information for corporate asset tracking (leaving aside privacy issues for the moment), since most devices have wireless chips these days? 

Services such as these would dramatically enhance my experience with the service provider, making me a more loyal customer, well, at least until other companies start offering the same.  At that point, my service provider would need to think of even better ways of improving my experience.

Same applies in the financial services space – companies that see beyond current models and innovate the entire customer experience are gaining traction.  According to Balaji Yellavalli, AVP in our Banking and Capital Markets business unit, the consumer lending industry is seeing new players that are going beyond the previous generation of innovation which digitized some parts of the lending experience (e.g. Lending Tree).  Now we are seeing more sophisticated new models – ones that allow simple peer-to-peer lending, among other things.

I’ve asked him to share his thoughts on this topic.  Balaji has 15 years of experience spanning business consulting, IT strategy and strategic sourcing.  He has been with Infosys for 6 years, prior to which he was with KPMG-AFF India and Feedback Ventures.  At Infosys, he leads the solutions consulting group for our financial services unit. 

Stay tuned for his blog…

March 8, 2007

Flat World CIOs - Preparing for the Corner Office

by Sandeep Dadlani, AVP, Retail and CPG Business Unit 

I looked in disbelief at the CIO of a small fast food chain when he asked “Can you help set the menus of all my fast-food outlets and manage the menus from Bangalore?”

No, he wasn’t talking about the menus that run some weekly batch jobs on his HP servers in his datacenter…He was talking about the actual menus with combo deals with fries or fruit salad as an option.  And, to manage that from Bangalore would mean at least a few menu management experts who would take sales data from all over the world, analyze them, take inputs from the company’s menu experts and then set/reset the menus.

Of course it can all be done in Bangalore…that wasn’t the fascinating fact. The most fascinating thing was that the question was coming from the CIO and not the CEO. Such an activity should have been the CEO or CFO’s priority but here was the CIO taking it up in full earnest.

CIOs have always been challenged with being part of the business strategy and using IT to enable business. Their objective has been to listen to their business partners and partner with them on their business ideas to implement them. But the Flat World CIO has a bigger mandate…My last few meetings with leading CIOs of Fortune 1000 companies have revealed that the CIO is well suited to take on another role – that of a flat-world evangelist and champion, that of an originator of business ideas and this is not just about offshoring.

Take for example, the CIO of a large consumer products company who started throwing out ideas in our first meeting on how we could become the analytics engine for his category managers. By using our brand managers in different geographies to analyze sales data and spew insightful reports we could allow his category managers to “Make Money from Information” instead of getting stuck in myriad reporting capabilities (or the lack of it) within the organization and the geography. This CIO was again not limiting himself to offshoring but he was using his experience at offshoring IT applications and basic business processes like F&A and HR. This experience was helping him in thinking globally without limitations. I can say for sure that this CIO would be a true friend of the VP of Marketing because both have the same vision.

Or for example the CIO of a large retailer who eagerly looks forward to the next downturn in the economy where most of the competitors slow down in spending on new initiatives. This CIO actually picks up the pace during a downturn in terms of taking business ideas proactively to his business partners and investing in those ideas “while the competitors are sleeping” as he says. No wonder, this retailer is one of the most successful in its league. It knows how to “Win in the turns.”

All in all, the more forward-looking CIOs, lets call them Flat World CIOs, are taking on their roles seriously as flat-world evangelists. They are best suited to this role for the following reasons:
- They have been exposed to a more global environment more than other CXOs
- In most companies, the IT department today is the most multi-cultural and multi-geographic environment
- They have first access to most of the core information that runs the company

These flat World CIOs tend to be the first to take up new business ideas that address each of the four flat world shifts. In a sense, they are assuming the defacto role of CEO without any limitations or boundaries to their thinking. It is no wonder that these CIOs are known in the industry to be the most successful.

March 7, 2007

Efficient operations are everyone's business

Sandeep Dadlani, from the Infosys retail and consumer products business unit, says that increasingly he has been seeing CIOs taking a leadership role in driving operational changes.  I've asked him to share his thoughts based on recent discussions and meetings with client executives.

Sandeep Dadlani is an AVP responsible for strategic relationships for Retail & CPG business unit at Infosys. He has over a decade of operations, product management and IT consulting experience. He has been with Infosys for over 6 years. Prior to Infosys he worked with Citibank in India, transitioning parts of their cash management operations to their captive and managing some of their global cash management product portfolio. Sandeep holds an MBA in Finance from Bombay University in India and a Bachelors in Electronics Engineering from MS University, Baroda, India.

March 1, 2007

Making Information Elephants Dance

by "Radha" Anantha Radhakrishnan, AVP, Infosys Retail and CPG Business Unit

I have always been fascinated by the power, largeness and might of an elephant and wondered many a time how this power could be unleashed many folds, if it can be more agile and made to dance, while retaining its might and majesty.

Having worked in the Retail and CPG industry on the business side as well as consulting side over the last many years, I have had the opportunity to see the sheer magnitude of effort, energy and time which goes into collecting and investing in information across the many different players in the whole value chain.

There are so many types of data  – sales, inventory, consumer, shopper, price, promotion, deals, orders, forecasts, service levels etc – adding up to billions of terabytes of data.

These billions of terabytes and the investments made to continuously collect them form the retail industry "information elephant”.

In the increasingly flat world marked by palpable emergence of new types of consumers (Prosumers, Transumers, Millennials et al), multiple new channels, new store formats, increased competition along with emerging new geo markets (China, India, eastern Europe etc.), each player in the retail value chain needs to figure out the best possible way to make money from the information elephant.

For the information elephant to dance and for the players in the retail value chain to make money from it, there are many opportunities and challenges.  Surprisingly, none of the big ones have to do with technology. They have to do with changing mindsets to think “flat world”:  Think enterprise, think actionable insights, POR (Point Of Relevance) instead of POS (Point of Sale). 
They have to do with thinking about “information turns” just as retailers are used to thinking about inventory turns.

  • How well is the data collected been used meaningfully across functional silos within the enterprise and leveraged across the value chain?
  • Is this data converted to information, knowledge and actionable insights?
  • Is the actionable insight made available to the appropriate people at the “Point of Relevance” (POR) to be able to decide?
  • Is the company’s focus on information storage rather then “information turns”?

In the flat world with dispersed and diversified value chains on the one side, leading to decreasing economies of scope and scale, and on the other side a consumer base which is increasingly stating that One Size, Color, Shape, Taste will not Fit All –- the players who can make their information elephant dance are going to be the winners.

Everyone who matters in the value chain has built its own information elephant, painstakingly at that. The time has come to make that elephant dance and increase the information turns –- It is the only way to succeed in a flattening world.

Feeding the information elephant

Recently, I came across an article in "Grocery Headquarters", a grocery retailer publication, quoting Anantha Radhakrishnan of Infosys.

In the article, he says that retailers and suppliers should focus on using information to understand the "point of relevance", the moment at which the consumer is making a purchase decision, which might not necessarily be at the point of sale.

To quote the article:

"'You have a whole set of good technologies like business intelligence and portal technologies, which are the enveloping layers, and you have three crucial technologies -- wireless, RFID and VoIP -- that can all be leveraged in a beautiful way to orchestrate delivering this information and making money from it by reaching it down to the point of relevance for the consumer,' he says.

"Obviously, incorporating these technologies comes at a cost, but experts say making an investment in analytics should not be seen as a barrier to leveraging consumer data. Instead, they say, grocers need to use these technologies in order to see a substantial return on investment by boosting shopper loyalty.  

"'The important thing is that the ROI exists, because you've already made a large investment in information with consumer data,' says Radhakrishnan. 'The analytic technology is not the killer in terms of investment. You already bought an elephant, which is a data warehouse. You now need to feed the elephant in order to keep it alive and get better results from having invested in it.'"

Intrigued, I have asked him to share more of his thoughts on this blog.  But let me introduce him first. 

Anantha Radhakrishnan, “Radha” for short, is an Associate Vice President and key member of the management team for Infosys' Retail, Distribution and Consumer Products business unit. He is an industry veteran with two decades of experience in the global consumer products and US retail industry.  Radha has held various responsibilities across multiple business functions such as category management, supply chain, marketing and customer service. At Infosys, Radha works with retail and consumer products clients, helping them design, implement and realize benefits from large scale transformations.  He holds an MBA from Indian Institute of Management (IIM) at Lucknow, and a BE (Honours) in Engineering from National Institute of Technology (NIT), Tiruchirapalli.

February 22, 2007

Satellite radio: Waiting for innovation

The announced merger of the two US satellite radio services, Sirius and XM, has resulted in much ink about the likelihood (or not) of US FCC approval of the merger and the merger's impact on service prices for consumers.

Much of this coverage misses the point: In an era where many businesses are succeeding in what would previously be considered niche or unprofitable markets, why has the emerging satellite radio industry remained, well, still emerging?

To recover the high cost of customer acquisition, companies must retain customers for some time.  And to retain these customers, they must offer something new of value.  Customers who signed up for these services may have originally done so out of curiousity and 'cool' technology factor.  However, at some point, unless the companies offer newer services that are better than the original, they risk losing customers to substitutes such as MP3 players and radio. 

I've considered subscribing to a satellite radio service in India to be able to listen to, say, NPR or a good jazz station.  But what I would really like is to have a single platform on which I can listen to music or programming from a selection sources, perhaps 3-4 radio stations from the US, 3-4 radio stations from Bangalore, combined with what's on my iPod.  And, I want to be able to listen to this whether I am in Bangalore, San Francisco, or London.  Whether I'm in my home or in the car.

Now, that, would a service I wouldn't mind paying for and keeping: a combination of device and service that makes my personal favorites available to me whereve I am.  Sort of a 'radio-berry' for my personal broadcast and owned music.

Unless the satellite radio (and digital music-player) industry innovates to offer new better services, customers are bound to figure out that all they are paying for is yet another silo-ed cool technology.  That may have been enough a few years ago.  But not in today's flattening world.

February 16, 2007

The Myth of Market Share

Professor J. Scott Armstrong of Wharton says that obsessing about market share may cause companies to lose focus on what matters most -- profitability.

"We're not saying companies shouldn't pay attention to their competitors; they might be doing reasonable things that you may also want to do," Armstrong says. "What we're saying is that the objective should not be to try to beat your competitor. The objective should be profitability. In view of all the damage that occurs by focusing on market share, companies would be better off not measuring it." 

Read more.

February 5, 2007

Puzzle versus Mystery

Recently I met Sharad Elhence who leads the Product Operations practice at Infosys Consulting.  He shared some interesting thoughts on information usage (or lack of it) by corporations.

He says:

"Malcolm Gladwell’s article “Open Secrets” in the January 8, 2007 issue of The New Yorker made an interesting read on my long flight from Frankfurt to Bangalore last week.  It provided a different perspective on the Enron scandal and Jeff Skilling’s prosecution.  Did Jeff Skilling and other Enron executives withhold critical information from investors?  Or did they share as much information as they could but nobody fully analyzed and interpreted that information?  In other words, was the core of the Enron scandal a puzzle or a mystery?  Malcolm cites the distinction between a puzzle (situation where we don’t have enough information available to us) and a mystery (where we have all the information available but the interpretation of the information requires analysis and judgment) from the work done by Gregory Treverton, a national security expert.

"What does this have to do with the Flat World ideas?  I believe that the fundamental shift of making money from information is all about understanding the difference between a puzzle and a mystery.  In the business world, there are a many more mysteries than puzzles.  Collecting more information may help solve a puzzle or two but monetizing information will come from having the mindset of solving a mystery.  Analyzing the data that companies already have collected to gain insights about their markets, competitors, customers, channels, products and operations is essential to delivering ROI (return on information).  So let’s unravel the big mysteries in ours and our customers’ businesses and if we find a puzzle along the way, let’s gather the missing information to solve that puzzle and then get back to the bigger mysteries and the associated big payoffs."

Sharad Elhence leads the Product Operations Practice at Infosys Consulting, helping clients in strategy, process and technology issues related to improving end-to-end supply chain performance.  He has more than 18 years of consulting and leadership experience.  Most recently, he was the Chief Operating Officer for an early stage provider of enterprise performance and knowledge management solutions.  Prior to that he was Vice President of Strategy at i2 Technologies and a management consultant with McKinsey & Company.

January 31, 2007

We’ll need more than one planet to live together

This year the debate at Davos was clearly about climate change and sustainability. But as is common with such complex topics there is as much confusion as clarity. At Davos there was a consensus that developmental models impacting the environment need to be rethought in the context of global development, especially in the case of India and China. Today, 70% of the world’s carbon emissions originate from the US and Europe. Carbon emission per capita in the US is 24 tons per annum, whereas it is 4 tons in China and 2 tons in India. Everyone agrees that if India and China achieve the same standard of living as the US, we will need more than one planet for all of us to live together.

Given the fact that 70% of the world’s carbon emissions are from the US and Europe and people of India and China want a better standard of living, we cannot then deny them development. So, it is very clear that we have to fashion a new kind of development model, which is less injurious on the environment. While there is agreement on this, the question is who does what and who pays for what? It is also clear that there is a role for government and there is a role for business. For governments, there are basically five responsibilities.

The first is to create regulations to encourage the right kind of behavior. For example, having fuel emission standards for automobiles or mandating that x percent of petrol should be bio fuel and so forth.

The second way that governments can make a difference is by creating global grading systems for different kinds of emissions so that less efficient organizations pay more. This essentially puts a price on environmental degradation.

The third way governments can achieve this is by having taxes on those forms of activities that they believe are harmful to the environment.

The fourth role of government is to give subsidies to those forms of behavior which they think is good for the environment.

Finally, governments have to support technological development so that new innovative ways come up to develop carbon efficient technologies.

Companies in turn have to work to become more innovative, more efficient, more environmentally friendly, and have to reduce their consumption of energy, water, plastic, etc.  They have to make more things biodegradable and so forth.  This is up to companies to do.

So there is a role for companies, there is a role for government, and often in the conversation the lines are blurred as to who does what.

The other issue is who pays for all this? Developing nations believe that they should not retard their growth because of a problem created by someone else. They want adequate compensation for the cost of inventing and implementing sustainable growth.

So the key issue at Davos was: "Out of all this, Will we be able to create a framework for not only what needs to be done but who does which part of it and most importantly who pays for it?"

January 25, 2007

"It's time to refocus on the employee," says B.G. Srinivas

B.G. Srinivas, SVP and Head of Infosys Europe, Middle East & Africa Business Unit, had this to share from his meetings in Davos (reproduced with permission from WEF blog):

The other challenge in the developed world is how top leadership is coming under increased scrutiny. ... While talent management per se is the key issue businesses grapple with, organizations are made by people. Irrespective of the fantastic systems and processes that organizations build, it is the individuals who make it happen.

We will have to refocus on the employee as we also refocus on customers. Employees will be the key in this world where information is becoming ubiquitous, technology is making information access in real time. All of it is going to have an impact on the kind of talent you want to nurture, the kind of talent and skills you need to build internally within the organization, and the kind of talent you need to attract in different parts of the world.

How do you plan for the future, how do you identify the skill gap in the changed environment, how do you start refocusing on training, mentoring and giving real life experiences to the same talent pool and keep them excited to operate in such a challenging environment is one part of focusing on the talent.

The second part is, how do you embrace multiculturalism, how do you ensure that you create an environment within the enterprise for people from different communities to work in a homogenous manner. At the same time, you need to invoke innovation and excitement among people while you lay a strong foundation of values and culture, which people from different parts of the world would embrace.

You need to take into account that not all of them would think alike, not all of them would have the same background. There will be sensitivities around what you want to set out in terms of culture and values.

Read full post

Setting the Security Standards, by Ashok Vemuri

It is day 2 in Davos, and here are some thoughts from Ashok Vemuri, reproduced with permission from the WEF blog:

It’s day one proper at Davos and a sea of lively debates are raging throughout the summit.  Often, the informal conversations you have over coffee are far more valuable than the public forums and one of the more interesting themes that came up amongst those I spoke to today was security.  I’ve attended several meetings since my arrival and been involved in a number of discussions with banking institutions and business executives about the threats they’re currently facing.

Phishing, phreaking and pharming are now everyday terms and the kind of attacks that are having a massive impact on customer confidence driving the demand for some kind of security governing body.  There is a definite feeling amongst delegates that trust is slowly dissolving amongst customers who are getting increasingly disillusioned about the safety of their information with their bank. 

I had several fascinating statistics thrown at me in conversation.  Whilst three years ago 90 percent of hacker attacks were benign with little dollar impact, 90 percent of hacking nowadays is malicious designed to disrupt data or steal information.  One of the newest concepts I heard about earlier was ‘data-kidnapping’ – where hackers break into business systems and block a company from using its data, effectively holding them to ransom. 

This provoked fierce debate about accountability amongst many of my fellow delegates.  If an online banking customer has his account details stolen and loses money, who is responsible?  Is it the user for not keeping his identity secure or is it the bank whose security may have been compromised?  Doubtless, this is set to be the biggest driver behind the calls for regulation and standards with banks crying out for guidance from a governing body.

It makes sense.  If we have regulators for the Internet, telecommunications and accounting then surely we should have some standards in place for security?  Someone to turn to so there is no doubt over where the responsibilities lie or what actions should be taken when a security breach happens.

Technology can be a great enabler in combating the security issues these businesses are facing however it can’t operate in isolation.  The responsibility for security needs to be spread between multiple parties and it’s down to regulators, vendors, banks and customers to put their shoulders to the wheel and fight this battle.

I’m sure the security discussions will continue as this week goes on but I’ve noticed that, as anticipated, media coverage around Davos has so far been very much dominated by the issue of climate change.  I have an Infosys breakfast debate at 7 tomorrow morning where I’m sure green issues will return to the fore.

Read more

January 24, 2007

"Green Davos", says Ashok Vemuri

In his post "Green Davos" from WEF, Ashok Vemuri, SVP and Head of Infosys Banking and Capital Markets Business Unit, says:

"Many of the delegates I spoke to seem to appreciate that a few token gestures to convince customers they are being green will no longer suffice. People are talking about how they can make wholesale changes to the way their businesses work from both a technological and sociological point of view. These changes will no doubt include investments in newer, greener technology in addition to ensuring that their business expansion and investments are not having an adverse affect on climate change."

That's an interesting observation.  More and more customers are voting with their wallets -- choosing their brands and vendors based on social/environmental issues.  Businesses are also waking up to this fact.

In fact, in one of his blog posts in August last year, Nandan Nilekani also said something similar:

"It is clear that the world cannot have every person with the lifestyle of an SUV owner. The environmental stress and the energy cost of that will be unviable. Hence in a broader view of the Flat World, environmental sustainability and energy efficiency will be just as critical. The good news is that this is on the radar screen of companies like Infosys."

Infosys, through its Ozone initiative, sets and achieves specific targets for reduction in water, paper, energy consumption. Google and Microsoft already use solar panels to power some of the electricity for their office campuses.  Wal-Mart has been reported to be looking at the same.  It remains to be seen what kinds of initiatives other companies take up.

 Read full post by Ashok Vemuri from Davos.

January 22, 2007

Telcos must transform their operations not just their networks

Subhash Dhar, VP and Head of Infosys Communications Service Provider Unit says that communications service providers must supplement their service-enabling business and network transformation with an operational transformation of their customer service and network operations.

“In the world of Convergence, the new business model for a telecom service provider also needs a new operating model to support it. How fast you transform the operating model will determine the success of the new business model.”

"To rollout its next generation IP network, a global telco is embracing a strategy made famous by Amazon, eBay and Google -- publishing APIs of network management interfaces to the core network. The company aims to increase the speed of new service creation by an order of magniture in the first year alone, with hundreds of services thereafter."

Read more.

January 20, 2007

Can Innovation be "Offshored"?

Yes, says Mohan Babu of Infosys on his blog: 

"One gentleman was curious about how 'innovation' could be offshored. We started debating on the 'processes' involved in innovation and how most of it is an evolutionary process-of-improvement rather than a revolutionary 'eureka' moment. The research that leads to innovations in processes and adopting new tools and techniques involves scanning the landscape analysing published research, benchmarking other best-practices..."

Read full blog.

January 19, 2007

Cisco's flat world moves

Cisco's Chief Globalization Officer Wim Elfrink says that Cisco plans to have at least 20% of its top executives working in India in the next three to five years.

Why?  According to Business Week:

"One reason lies in the size of India's market. While Internet penetration in India stands at a mere 4.5%, the online market there is one of the fastest growing in the world and the Indian cellular market is white hot.

"The other issue is cost. Huawei can compete against Cisco on price because of its cheap talent pool. Facing those pressures, Cisco will find it hard to maintain its high margins unless it develops its own vast force of low-cost engineering talent.

"Cisco also wants to acquire the best Indian operations in its field to accelerate growth. As part of its ambitious investment plan, Cisco has set aside $100 million in a venture capital fund to buy out Indian companies. It has invested in a couple of outfits such as gaming destination (Cisco acquired Linksys, a home networking company, in 2003.)"

Read full article at

January 16, 2007

WEF: "The Shifting Power Equation"

This year, the theme of the WEF (World Economic Forum) Annual Meeting in Davos is "Shaping the Global Agenda: The Shifting Power Equation". 

On their website, you can find some interesting views from CEOs and Chairmen of companies, including Klaus Schwab (WEF), Walter Kielolz (Credit Suisse), E. Neville Isdell (Coca Cola) and Nandan Nilekani.

January 13, 2007

Making money 3 mints at a time!

Yesterday after a dinner at a Bangalore restaurant, my colleagues and I were offered mints: miniature packs of 3 Tic Tac mints each! 

The price on these packets for retail sale was 50paise (approximately a US penny).

I decided to do a comparison with US prices (I admit curiosity got the better of me). A Tic Tac box is available for 58 cents on Amazon if bought two dozen at a time, excluding shipping cost of course!.  If I assume that each box contains 35 mints, I come up with approximate price of 1.6 cents per mint.

Interesting isn't it?  The supplier is able to make a profit on these penny packets despite all the extra (though miniature) packaging and distribution costs.

To make the product affordable to millions of cash-flow sensitive customers, manufacturers package consumer products in single use packets -- everything from Tic Tac mints to shampoos and laundry detergent, or even a single text message sent across the country.  The trick is in how to maintain profitability even as product sizes (and therefore transaction sizes) shrink to zero.

January 9, 2007

India will open up education sector, predicts Ruth David

Ruth David of Forbes predicts that "The Indian government will allow foreign universities to enter India, setting in motion a revolution in education and helping the country meet the growing demand for an educated workforce."

This is inevitable as India copes to meet the severe talent shortage that is already one of the top business challenges. 

China will give in to temptation, says Robyn Meredith

Robyn Meredith of Forbes predicts that in 2007 "Beijing will borrow a page from Putin's Russia and gradually give in to its animal urges for stronger authoritarianism."

January 7, 2007

Latest features for $40

Motorola has recently launched its Motofone in India for Rs. 1700 (approx. US$40).  What's amazing about this phone is not only its price, but that it is not a "stripped down" version.  The phone comes fully loaded with features that people anywhere in the world would want: durability, extra long battery life, screens desgined to be sharp in daylight combined with stylish design.

This is innovation. 

Watch out, Nokia!

January 1, 2007

Making a New Year Resolution

by Nandan Nilekani, CEO and Managing Director

It is prudent to start a new year by looking back at the one gone by. At what we have achieved, and the lessons it can teach us.

2006 was a year of great promise for India. No strategic business discussion was complete without a mention of its name.

The numbers were also encouraging. In 2006, India accounted for 65% of the global offshore IT market and 46% of the BPO market. And, R&D spending grew about four times the global average.

2006 was also the year that India and China came to be spoken of in the same breath. Interestingly, at the start of the industrial revolution, India and China contributed close to 45% of the global GDP. By 1970 this figure had shrunk to 7%. Now it is on the rise again. It is expected to climb to 30% by 2040.

However, except for pockets of transformational change, infrastructure worries continue to haunt India. Increased public-private partnership promises to narrow the gap with its rivals, but it will take all of its means and more to make a truly giant leap.

In the meantime, India must play by its strengths. Its educated talent pool has been recognized globally as a desirable workforce. Its experienced managers are sought after by companies seeking to innovate. Technology developed in India is disrupting business models everywhere. India’s growing middle-class is being eyed by growth minded-companies as attractive markets.

Today, India and Indian companies hold the attention of the world’s business leaders. The ball is now in our court. In the year to come, it is up to us to deliver on that promise.

Happy New Year!

December 22, 2006

Thoughts on Innovation

by Satish Bhat, Engagement Leader, Infosys Consulting

Innovation is a journey and not a destination.  The moment you feel that you have innovated, you are no longer innovating.  This notion is in line with the notion of “Excellence” so eloquently articulated by Barkha Dutt, chief guest at the Infosys 2006 Awards for Excellence.

Those sitting comfortably "in the middle" are not likely to innovate.  Innovators tend to be either at the cutting edge where they are proactively deploying resources and creating mechanisms to innovate or they are so deep down the drain that they have to innovate just to survive in their industry.
Every innovation does not have to be a blockbuster innovation.  When several smaller innovations come together, they could have a collective impact that is bigger than the sum of the parts.  We see that on the automotive dashboard all the time.   All the small technology innovations by the various tier-1 manufacturers and their suppliers who make the components of a dashboard come together to form a dashboard that is intuitive and ergonomic.

Fear of failure is a big detractor on the path to innovation.  The organization must emphasize that a certain percentage of attempts to innovate will fail and that is OK.  Otherwise, the fear of failure will create a significant barrier to innovation.

Introducing Satish Bhat

Let me introduce Satish Bhat, who will be sharing his thoughts on innovation.

Satish is an Engagement Leader with Infosys Consulting and is part of the core team developing the ideas, tools, methodologies and solutions under the Think Flat initiative.  Satish has more than 15 years of experience in assisting a wide range of clients, from startups to conglomerates, with the development of their operational strategies.  He specializes in automotive, airline, hi-tech, consumer products and retail industries.  His consulting expertise includes pricing optimization, order-to-delivery optimization, customer and product portfolio analysis, marketing, supply chain, and eBusiness strategy development. 

Satish holds an M.S. in Industrial Engineering from Louisiana State University and and MBA with Honors from Universtiy of Chicago Graduate School of Business, USA.

December 13, 2006

No one invents anything anymore

As business fads go, “innovation” is the latest craze in business vocabulary. “R&D” is passé. No one does R&D any longer.  No one invents anything.  They all innovate.

And, it seems everyone is doing innovation.  If they're creating new products it is innovation. Product design is innovation. Engineering is innovation.  New technology adoption is innovation.

According to Webster and Oxford dictionaries, innovation is "the introduction of something new; a new idea, method, or device".  The imperative word being "new".

I was talking recently to an industry analyst and this topic came up.  I believe that innovation is often misunderstood as the "Eureka moment".  And at the other extreme, the word is used as a euphemism for almost anything one does, new or not. 

So what does this have to do with thinking flat? Companies that think flat do things in new ways that are different and better than traditional methods.  They are able to introduce products faster not by throwing more people or money at the problem in a brute force manner, but by improving the underlying processes and technology.  They are able to interact with customers better and truly understand what matters to customers (and offer it fast).  And, they even innovate the process of innovation -- co-creating with their customers or even opening up innovation to "anyone" in the world.

December 11, 2006

What drives offshoring: Just low cost or other factors?

Professor San Murugesan from Southern Cross University, Australia, recently answered this question on Infosys' blog on "Managing Offshore IT".  He conducts research in information retrieval, wireless internet technologies and applications, web engineering, IT adoption, globalization and offshoring.

An excerpt:

... In advanced economies such as the US, UK and Australia, there is strong negative perception about and opposition to outsourcing (offshoring). Their major concern is job loss, though other issues such as privacy and integrity of customers’ information and intellectual property take prominence. As a journalist wrote in an Australian newspaper recently, for enterprises that offshore its service needs, it is the question of their survivability, improving their competitiveness and providing better customer service in cost-effective ways, rather than how and where it gets services accomplished. If they don’t offshore some of their services, some of the enterprises can’t remain competitive and sustain their business contributing to further job loss and strain on economy and the society.

Read full post here.

December 6, 2006

How will China impact the global auto market?

Take a mobile phone and make it bigger. Make it still bigger. Now you have got a screen size that makes it a viable competitor to the TV for your entertainment needs. Make it big enough to put enough processing power for your information needs. Make it voice activated. But it is too unwieldy to carry around with you. No problem; if you can’t carry your communication-entertainment-information unit, let it carry you. Make it even bigger and add some wheels to it. Soon, a GPS enabled car, with all its in-cabin communication/information/entertainment implications will be a regular feature on the roads of Japan and Korea. And what begins in any of these places will naturally find expression of scale in China.

Continue reading "How will China impact the global auto market?" »

November 30, 2006

How Important is China to Your Business?

by Aditya Jha, Head of Global Branding

How important is China to your business? Is it a salad dressing that’s fashionable, or is it being prepared to be the main course? There’s a simple test you can take. Your organization structure should, theoretically, reflect the priority of your organization. So, the test is: do you have a Chief China Officer?

Why do you require a Chief China Officer? Because doing business in China is slightly different and more complex than doing business elsewhere.

Doing business in China requires building trust. Building trust requires an understanding of individual drivers and the dynamics of the bureaucratic-political network. Building trust requires an appreciation of subtlety of cultural nuances. Building trust requires being on top of the current and projected industrial and monetary policy trajectories. Building trust requires insights into geo-political fault lines within China (example: Taiwan/Hong Kong/outer provinces) and the socio-economic fault lines within the consumers (example: jeans vs free speech; the influence of the conventional loneliness of the only child on the importance of virtual communities).

If you are a non-Chinese company competing in the Chinese market, it may be worth while to remember that the Chinese companies are better placed to crack this code. Unlike market projection data, these can’t be bought off the shelf. To run your operations, you need a person who is plugged in, not only operationally, but also culturally, socially and politically.

So, do you have a Chief China Officer?

More introductions...

I have asked Aditya Jha, who heads Infosys global branding, to share his thoughts about business in China.  He recently visited Infosys China development center and has some interesting observations.  

Aditya started his career at ad agencies and worked at many agencies over the years, including Lowe, DY&R, Ambience, FCB, and O&M. He has won over 50 awards for his work in print, radio, and TV.  Aditya then switched to heading the marketing function of a product startup. He likes to say that he started his own company on the day the NASDAQ crashed by 605 points. The company focused on creating an instruction architecture model that maximizes the learning of a student even without the presence of good teachers. He says, "the model worked but the business failed". 

Aditya has also written two serials and contributes regularly as a columnist to Outlook, one of India’s premier news magazines. He holds a degree in Chemical Engineering from IIT.

November 17, 2006

Milton Friedman passes away

Milton Friedman, the libertarian Nobel Prize winning economist died this week.  His views have shaped the beliefs of generations of economists and business thinkers, and, combined with those of many others have contributed to the shift in government mindsets across the world towards opening up their economies.

A good coverage of Milton's views and some past interviews are available on NPR. An exerpt from a 2000 interview:

Now the Internet, by enabling transactions to be made in cyberspace, not recorded, by enabling them to move so that somebody in Britain can order books from in the United States, somebody in the United States can do a deal in India, I think the cyberspace is going to make it very much more difficult for government to collect taxes, and that will have a very important effect on reducing the role that governments can play.

And in 1999:

[The fall of communism would have a long lasting impact] because it marked the philosophical supremacy of the idea of free markets and private enterprise over the idea of collective central planning. The collapse of communism in essence added tens and tens of millions of people to the world labor supply, and the people who were added had previously been getting very low income, but they were not unskilled. Many of them were fairly well educated.  

Whether you agree with his views or not, he played an important role in shaping economic theory and practice through passionate debates and government influence.

The New York Times also has a detailed coverage of his views and impact.

November 14, 2006

Admin matters

Due to the ADR related media "silent period", Infosys senior executives will not be commenting in this space.  It is expected that the silent period will end by December.  Till then, we will continue as usual but without contributions from Infosys senior executives.

And as promised earlier, the blogger profiles section is now available. As additional people post their thoughts here, their bios will become available.

November 1, 2006

Talent development

Some readers have commented about needs of the employers vs. employees.  That raises another interesting point.

Just as in client-vendor relationships the "us vs. them" mentality is being replaced by tightly integrated collaboration, in employer-employee relationships similar approahces can become attractive especially when talent is in shortage.  For example, it is in an employer's best interest to help its employees' develop their skillsets to the fullest and offer them opportunities for professional growth.  And, employees may find staying with these employers advantageous if the growth opportunities offered exceed what they can find in a new organization.

In fact, as jobs of the future require more multi-faceted skills, talent development becomes critical for both the employer and the employee.

October 20, 2006

Talent Wars, cont'd...

by Richa Govil, Group Manager, Infosys Technologies

It seems that some readers disagree with my statement about increase of unprofessionalism among talent in India.  However this is a trend that goes beyond my personal experience.  Recent studies have tried to measure “employability” of graduates including qualities such as ability to work in teams (e.g. see NASSCOM, McKinsey, and others).

To me this trend seems an inevitable consequence of the simple laws of supply and demand. 

Some readers have pointed out that employers need to be equally professional in their relationships with employees.  I agree.  When the tables are turned, employers in the past have been known to treat their employees with little regard.  Having seen two close friends go through lay-offs, I can attest to the callousness (deliberate or otherwise) that can be involved when the situation is not handled correctly.

However, none of this negates the fact that employees are now hitting back, collectively as it were.  No longer loyal, willing to switch at the “drop of a hat”, and unwilling to keep commitments, talent has now firmly entered the realm of unprofessionalism.  I have had multiple cases where after accepting an offer in writing, prospective employees have not informed the company that they will not be joining after all.  These days you can be sure that you have actually filled an open position only when the employee shows up on Day 1.

Business communities in any country (at least at the mid to senior management levels) tend to be small.  Even India with its billion people, relies on a much much smaller business community and business graduates to run its companies.   It seems that young workers in India have not yet developed the maturity to realize this fact.  With the over-abundance of opportunities this behavior appears to be the right choice (or even the logical one by some calculations).  But this will prove to be a short-sighted approach when the economy turns as it eventually must. 

Attracting the right talent (not just the right diploma/degree) in emerging economies is a challenge for all global companies (with Indian origins or otherwise).  It becomes even more frustrating for companies unfamiliar with the local situation or with a weaker brand locally.  And in India, as other growth industries such as retail accelerate hiring, the supply of skilled talent will only become tighter. 

But this is exactly where “thinking flat” comes in.  Companies have to look beyond traditional organizational structures and recruiting models.  They can consider alternatives such as hiring talent where best available, stretching reporting & collaboration lines across continents not just for the senior management levels as is already common, but even deeper in the organization.  Or, they can hire internationally mobile professionals.  In some cases, they can look to “Tier 2” cities for employees (e.g. JetBlue’s customer support centers or Indian IT companies’ development centers). Or going to the source of the problem, they can expand the talent pool by working with colleges and universities to make the graduates more employable.

Many of these approaches are being used by leading companies (Infosys included). For examples, see the Oct 17 New York Times: “In a Twist, Americans Appear in Ranks of Indian Firms” and “Skills Gap Hurts Technology Boom in India.”

October 13, 2006

The War for Talent Heats Up

by Richa Govil, Group Manager, Infosys Technologies 

The October issue of The Economist features the war for talent as its cover story.  The article mentions how the shortage of talent has become a top issue and “how the war for talent is shifting the balance of power from companies to workers”.

In fact I have encountered some of the most unprofessional behavior in my own search for talent.  Engineering and sciences being the most sought after careers in India means that the softer skills are harder to find.  And that means that the balance of power is definitely on the side of the worker.  And it can lead to some unbelievable outcomes.

Recently I had set up a phone interview with a candidate who did not pick up the interview call.  He called me 45 minutes later saying in a nonchalant manner, “Oh, I had a missed call from this number so I am returning the call.”  When I informed him of the missed interview, his response was a surprising “I was driving”.  When I asked him whether he was aware of the interview time, he responded “Yes, but I was on another call”. So within a matter of 45 seconds he had given me two different reasons for missing the interview, neither of which sounded convincing by any means.  Needless to say, he will not be hearing from me ever again.

I am sure we can all relate ‘war stories’ when it comes to recruiting.  What is disconcerting is that such scenarios are no longer becoming the exception but the rule as Indian workers realize that the balance of power lies with them. 

But unprofessionalism can’t be good for either side in the long run.  

October 8, 2006

The Missing Technology Edge

By Richa Govil, Group Manager, Infosys Technologies

The October issue of HBR includes an insightful look into the competitive strategies of emerging companies.  While the article discusses three strategies, it misses one important one.

Titled "Emerging Giants: Building World-Class Companies in Developing Countries," it covers the strategies employed by companies in emerging markets to compete in domestic and global markets.  The three strategies  described are: (1) understanding of unique local customer needs, (2) superior knowledge of and access to local talent and capital, and (3) filling institutional voids such as accounting firms, market data/research firms, and rating agencies.

However, I believe the article missed one important aspect – namely, the emerging companies’ ability to “leapfrog” conventional technology and operating models. 

Just as consumers in emerging markets “leap-frog” technologies (e.g. consumers skip landlines altogether in favor of mobile phones), emerging companies can do the same.  They have the luxury of designing their operations with the latest technologies and global operating models in mind. 

A good example is ICICI Bank, which relies on its strong technology and systems to financially outperform its global rivals.  The bank has recently entered the UK and has plans for further expansion.   Additionally, its ability to profitably handle smaller transactions will make it possible for the bank to penetrate rural markets sustainable.

Of course all startups (whether in emerging economies or not) have the option of skipping generations of technology, but the emerging economy companies can combine technology with a forward-looking mindset and global operations to create operating models that can deliver a  competitive edge across the globe.

September 15, 2006

The Role of Countries

by Stephen Lane, Group Manager, Infosys Technologies 

Many readers have commented about trends in resource availability and infrastructure.  Leaving geopolitical risk for another day, then, I’d like to open a discussion about the role of countries in global sourcing with respect to human resources, convenience, and infrastructure in India. 
India possesses clear early mover advantages, especially in terms of human resource availability, quality, and cost.  These are, for the overwhelming number of companies, the primary motivations for global sourcing.  Starting with demographics, India presents a much more positive picture than most other low-cost sourcing locations, including China, with their projected steep declines in the number of working age individuals as a percentage of total population in the next 10-20 years. 

However, only 61% of India’s people are literate and a mere 7% in the 18-to-20 age range is enrolled in higher education.  The numbers for China are roughly 91% and 15%, respectively.  Ensuring a large labor pool, not only to meet future demand but also to maintain a cost advantage, means investment in education and bringing more people into the workforce.

By convenience I mean cultural compatibility, the availability and expertise of potential sourcing partners, business transparency, and travel.  Here again, India possesses clear advantages.  Leading service providers such as Infosys have well-established relationships brand-name clients and world-class business and corporate governance practices.  And, as long as the demand side for global sourcing is focused in Anglophone countries the Indian services industry is well-positioned to maintain its leadership. 

How long will be the case, however, is open to question.  Especially as demand begins to shift to non-English speaking countries and, as one respondent noted, China begins to realize the results of its large investment in English education. 

Finally, in spite of its many wonders, India is not exactly the ideal business travel destination, which brings up infrastructure.  Granted, India has far more important needs than making things easier for services companies and business travelers.  Nevertheless, companies must heavily invest to make up for the poor infrastructure.  At the same time, negative comparisons to China continually appear in the industry press, causing people to note that India’s infrastructure problems are having a negative impact, not only on my industry but on economic advancement in general.  True or not, perception is reality.

I raise these points not to sound an alarm about India’s services industry.  I am well aware of things that Infosys is doing to ensure its future as well as maintain its role as a good corporate citizen -- as well as efforts by the national and state governments.  Moreover, if one were to ask me about China, Russia, Brazil, or other countries I could come up with similar concerns, some even more grave than those facing India. 

Nevertheless, although India’s services workers are among the best in the world, they are not some new species immune to changes in the world around them.  So, concerning the role of countries in global sourcing – or any other business in the flattening world – I would say that it’s about creating environments where people can flourish.

September 1, 2006

IT sourcing in China

I've asked Stephen Lane, an Infosys global sourcing expert to comment on this topic. 

Stephen has spent 27 years in the IT industry with more than 15 year’s experience in outsourcing delivery, advisory consulting and industry analysis.  He works with leading Infosys clients to identify and share global sourcing industry best practices.  He holds a master’s degree in East Asian Studies, which partially accounts for his long-time interest in China and its role in the global economy.

August 30, 2006

China, India and IT Outsourcing

by Richa Govil

Infosys recently polled 237 IT and business professionals. The survey asked "Do you think China will overtake India as the next hub for IT outsourcing services by 2020?"

35%: Yes
14%: Maybe
50%: No
(the usual disclaimer about rounded numbers not adding up to 100% applies)

I'm sure if China puts its mind (and muscle) to it, it can make anything happen. But at the same time I am not convinced that China will overtake India by 2020. 

There is more to building expertise in a field than throwing $$s and people at it. There is a reason why Silicon Valley continues to be the hotbed of entrepreneurial activity in tech-oriented businesses. There is a reason why despite horrible traffic Bangalore employs the highest number of IT professionals in India. Experts in any field do not thrive in isolation -- they require a whole ecosystem to support them.

I'm not saying it can't be done. The Japanese automotive industry is a great counterexample.  But if I had to choose between China and India, I'd pick India. Of course, I don't have to choose -- after all, Infosys is building up an IT development center in China.

August 19, 2006

Global Footprint does not make a Flat World Company

by Richa Govil

Many people confuse companies having a global footprint with flat world companies. If global footprint made a company succeed in flat world, all Oil & Gas companies would automatically qualify.

Flat World companies are able to integrate talent seamlessly across continents instead of creating islands of operations around the globe. Simply establishing "offshore" IT centers in India and call centers in Philippines is not enough. Very few companies around the world have a reached a stage of global operations maturity to have truly integrated global teams as the norm, rather than an exception.

Consider this:  In my group, we have many teams where a person may be based out of, say, London, whose direct report is in the US and manager is in Bangalore. This is a common scenario in Infosys -– only the permutation of continents changes. And these people do not work in isolation of each other, but on a single project.

If you think scheduling time for meetings with colleagues is difficult, try doing it across three continent time zones!

August 16, 2006

The Flat World Goes Both Ways

by Richa Govil

Yesterday I read that AT&T is now trying to re-enter the Indian long distance phone service market.  This got me thinking about how larger and larger percentage of global companies' revenues now come from emerging economies.  In some cases these countries account for the majority of the companies' revenue growth. 

On the flip side, leading companies from China and India are also increasing their hiring targets from the US and Europe.

Recently ICICI Onesource (Indian BPO company) announced that it is setting up a contact center in Ireland, creating 1000 local jobs.

Infosys has already hired 126 software engineering graduates in the US and plans to more than double the number by the end of the fiscal year.

There are plenty of such examples of companies seeing increasing revenue from emerging countries and creating jobs in developed countries.  As traditional barriers to business break down, companies are beginning to realize the ideal end-state of global operations: employing talent where it offers best value, source where most cost effective, and sell where most profitable.

It is no longer a question of whether this will happen; it is only a matter of how quickly can companies achieve this. 

August 9, 2006

Introducing George Mathew

Let me introduce George Mathew who will be sharing some thoughts on how the world has flattenend for him.

George describes himself as "a researcher by profession, engineer by training, writer by interest, and analyst by nature."

He is the editor of Infosys' R&D journal "SETLabs Briefings", and until recently was the head of IT Management Research Center for encouraging innovation, harnessing experiential insights, and capturing best practices from the company’s 50,000+ practitioners.  Currently he heads consulting practice for the Infosys Canada business unit. George is also a contributor to IT Toolbox blog 'Guruspeak'.

August 6, 2006

Transparency is the New Challenge

In her most recent report released on August 1, Stephanie Moore of Forrester Research says that clients expect efficiency and transparency when working with their IT service providers.

This is yet another sign of how customer expectations are increasing as they get used to having more visibility into pricing and other information.  It will be interesting to see how far this trend goes in services industries other than IT.

August 4, 2006

The Sky is Falling and the World is Flat

by Richa Govil 

I moved to India almost exactly two years ago, at a time when the US economy was still trying to find a path to growth. On landing in India, I saw growth all around me. New construction everywhere you look. Cellular network coverage even in remotest parts of rural India. 28 year olds putting down-payment on apartments…  

I was amused to find that I had joined a company where business units growing at 25% CAGR were the underperformers! A company which has generated so much respect and intrigue that it attracts to its campus not only friends and family of our employees, or our clients and prospects, but also heads of state from around the world.

If you look at all this from the perspective of someone with a predominantly US experience, you’ll agree that this is mind-boggling. 

I am no Thomas Friedman, and “The World is Mind-boggling” would probably not have sold two million copies. 

Well in any case, I am now at Infosys and I look forward to exploring with you some of the opportunities and challenges of business in a flat world. I would like to leave you with a thought: In your business, does “flat world” feel more like hype or reality?

July 31, 2006

In a Flat World, Operational Excellence is Strategy

by Nandan M. Nilekani

Over the last 25 years, IT has been the prime mover in creating millions of jobs, not just in IT firms but in all the industries and services needed to support it. 

Yet in many ways the next five years are going to be critical for the IT revolution. It is becoming increasingly clear that this is not just about a few back office jobs. The flat world created by the confluence of technology, globalization, demographics and the rising economic power of India and China is making companies fundamentally alter their business assumptions. What and where they produce, whom they sell to, at what price, and how they manage it all – the  fundamental tenets of their business model are being entirely revisited.

This is likely to lead to the most dramatic transformation of firms in every aspect of their business, as significant as the role of mass manufacturing in remaking the industrial revolution in the early 20th century.

In this new environment, companies that are able to increase productivity, use technology intelligently, globalize their talent base and practice financial discipline will derive sustainable competitive advantage.

But achieving this will require from all of us who are in a position to effect change, a strategic view not a tactical response to get through the next quarter. It would require us to question fundamental business assumptions and drive long-term operational changes – for in a flat world, operational excellence is strategy.