ANNUAL ISSUE
APRIL 2014
INDIAN IT INDUSTRY OPPORTUNITIES IN THREATS
SummIT—THE TECHNOLOGY AND CONSULTANCY CELL, NMIMS
ADVERTORIAL
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EDITOR’S NOTE Dear Readers, The Indian IT industry is faced with strong growth in export from new verticals with large domestic players having built strong capabilities in the last decade. With the government recognizing IT as a priority sector for the growth and development of the country, support policies and cost advantage are establishing the country as a ‘destination of choice’. As a part of the technological revolution, disruptive technologies like Social, Mobility, Analytics and Cloud is bringing a paradigm shift in the way technology gets adopted by the business and has led to the emergence of local players. Companies are realigning their business models and continuously investing in new technologies to provide innovative value propositions to their customers. SummIT, the information technology cell of NMIMS, brings to you the various aspects of the Indian IT Industry through the annual magazine ‘Manthan’. The theme for this edition is ‘Indian IT Industry: Opportunities in Threats’. We received several articles from various Bschools and the best ones have been published. The edition also focuses on rise of Local E-commerce players, opportunities for introducing automation in the IT industry, & on disruptive technologies that create a digital nervous system. Under the section ‘Guest Speak’, we are glad to present an interview with Mr. Prashant Paliwal, Director, Product Management at Flipkart on Indian E-commerce industry trends, opportunities and challenges. We thank the authors and esteemed guest for their valuable contribution and hope our readers enjoy this edition. Team SummIT has been continuously getting our readers’ support and we extend our gratitude for the same. Do write in to us with your feedback at summit@nmims.org Happy Reading!!! —The Editor, SummIT
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WHAT IS IN STORE...
GUEST SPEAK EVENTS COVERAGE SMAC-BIG OPPORTUNITIES FOR SMEs AUTOMATION IN THE IT INDUSTRY RISE OF LOCAL E-COMMERCE THE DIGITAL NERVOUS SYSTEM SPOTLIGHT TECH FOCUS NEWS ROUND-UP MANTHAN 2014
GUEST SPEAK
Mr. Prashant Paliwal currently works as Director, Product Management at Flipkart. Before Flipkart, he was with Intuit's global product management team where he established their first financial management SaaS offering for SMBs in India. Mr. Paliwal spent nearly 10 years at Intel in the US spanning different product lines including mobile, digital and embedded products. He holds 3 US patents with a bachelors and masters in Computer Science. He is also an MIT Sloan alum and is passionate about coming up with products that could change customers lives profoundly. Solving problems for customers in a rapidly growing Internet and ecommerce ecosystem keeps him going every day.
What are the major achievements and roadblocks with respect to the ecommerce segment in 2013? Why? In 2013, the ecommerce market in India grew at a staggering 88% YoY to $16B in 2013. That’s one of the fastest growing ecommerce markets in the world. That said, it still represents a very small part of the overall $520 billion retail market in India. Retail in India still remains highly fragmented with organized retail overall being just about 8% and hence ecommerce is still ways away from where it should be compared to other economies. Internet access continued to remain an issue in 2013 with just about ~15% of people accessing it in India, this has a direct impact on customers accessing Internet to shop online. This is evolving fast though, where overall Internet user base in India is supposed to grow to 25% of the population base in 2014. Majority of this growth is coming from mobile and these 1
are very positive signs for ecommerce in India moving forward. Do you think the local ecommerce industry in India is saturated? If not, what are the opportunities ahead? No, I think ecommerce in India is just about starting. Ecommerce still stands at less than 10% of the overall retail market in India. The market just grew 88% in 2013 and has a huge potential ahead. Ease of use to order goods online has given infrastructural issues in metros anywhere, anytime, while mobile internet growth opening up tier-2 cities and beyond is only going to increase the number of users using ecommerce in India. According to you what will the road map for the ecommerce industry in next 5-10 years? In next 5 to 6 years ecommerce market in
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GUEST SPEAK India is going to increase 10 times to approximately $200 billion. Most of these new users are entirely going to skip desktop and would be accessing Internet over mobile devices. Which are the major changes in consumption patterns (online & mobile) that you observed in the past? And what are the future trends? Out of close to 250 million people accessing Internet in India in 2014, close to 50% would be accessing it from mobile. Mobile access is going to dominate ecommerce going forward and will surpass all other means like desktop 2014 onwards. A majority population in India will skip desktop altogether and access Internet from mobile devices going ahead. What kind of transition have consumers made from offline to online? Why? What are your observations? Better prices and selection of goods online and ease of use to get goods at your doorstep by skipping infrastructural and traffic issues have prompted majority consumers in Tier-1 cities to adopt ecommerce. Tier-2 cities and beyond are still driven by the lack of selection and options of goods available driving the early adoption towards online growth. What are the challenges in the ecommerce segment that would need to be addressed? Internet access with proper bandwidth for majority population for it to support ecommerce still remains the biggest challenge to solve. The ability to reliably deliver goods and deploy scalable logistics solutions in a country facing infrastruc-
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tural issues is another major challenge to be solved by most ecommerce players. How the regulations in the retail industry will affect ecommerce players? FDI limitations in India remain a big challenge for many to scale up. Regulations around payments and fragmented logistics and tax regulations across the country with state specific laws remains a challenge to be solved by players looking to scale up pan India. With 243 million internet users in the country by June 2014 and India’s mobile services market will reach Rs 1.2 lakh crore in 2013 (Gartner), up 8% from 2012 revenue of Rs 1.1 lakh crore. How ecommerce industry can leverage this advantage? More than the average revenue per user on mobile, the most important metric is the number of users accessing Internet from mobile devices out of these 243 million users. This is almost about to reach 50% of the overall Internet market and it poses a tremendous opportunity in front of all ecommerce players in India. There is a strategic shift happening where users are skipping desktop and accessing mobile Internet in most areas including rural India. With smartphones becoming affordable increasingly, they are now increasingly becoming affordable for median to low income population segments. This continues to open up tremendous opportunity for all ecommerce players. Majority ecommerce players will have to come up with easy to use mobile apps for all these users to access the goods they are looking for, anywhere anytime at their fingertips! 2
SummIT Events’14 APPetite: In August ‘13, SummIT conducted the event APPetite which tested participant’s knowledge on current apps in the market. Participants were provided with housie tickets and a sheet containing names of 100 mobile apps with a number assigned to them. The event saw good participation and interest by the students of first year.
CEO Connect: The students of NMIMS got a rare opportunity to interact with some eminent leaders of the business world on August 2nd 2013, in a session called ‘CEO Connect — What CEOs expect from MBAs’. The session was jointly organized by Confederation of Indian Industry (CII) and SummIT. The guests of honour included much acclaimed names in the industry such as Mr. Ninad Kapre - CEO & MD of Aptech Ltd, Mr. Arun Nanda - Director of Mahindra & Mahindra Ltd, Mr. R Mukundan - MD Tata Chemicals and Mr. Anuj Puri - Chairman and Country Head of Jones Lang LaSalle. Also, it was history in the making when Mr. Ninad Karpe mentioned that the CII chose NMIMS to debut their CEO Connect initiative. The event was covered by a lot of media personnel, with representatives from Network 18 and Pagalguy, it also got coverage in the Economic Times.
Pylon of Isis is an online treasure hunt game which is conducted by SummIT for the new batch joining the college; it is on the lines of our flagship event KHOJ. It has 10 brain racking questions in areas like general awareness, sports, puzzles and pictorial representations. Each question has twists to keep the quest interesting and hard to fetch answers. This event received a huge response from the students in terms of registrations. Overall 140 teams, i.e. around 280 people registered and competed in the treasure hunt event. Stand Up Comedy by Chuck Gopal: To add fun and frolic to the difficult MBA life, SummIT organized a stand Up comedy event during Paragana along with its flagship event KHOJ. Chuck Gopal of PagalGuy Cricinfo, made the audience roll with laughter; the event received tremendous response from students of both the batches.
After a hiatus of one year, Zero Respect, the LAN Gaming Competition was back with a bang this year. Organized by SummIT as a part of Euphoria ’14, the annual cultural festival of SBM, NMIMS; it was the optimum mix of fun, excitement and strategy which proved a welcome release from the stressful atmosphere of B-School life. With high emotions and intense rivalries, everyone was eager to find out who would be the ultimate champion in the Counter Strike. Finally, after a series of sudden death rounds, the winner was declared as ‘TBD’ from NMIMS, with the second place being bagged by ‘The Headshot Lords’ also from NMIMS. The event was a huge success, and went off smoothly without any technical glitches.
DigITize: SummIT organised a comprehensive 5 hour digital marketing workshop conducted by Mr. Deepak Gopalakrishnan from Ogilvy & Mather. Mr. Deepak has been a digital marketing professional for 5 years with experience in digital media sales, business development, and concept selling and planning. He covered various topics like social media marketing, digital platforms, traditional vs digital marketing and insights on developing a successful social media strategy and campaign. It received a tremendous response.
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SummIT Events’14 The event was in the format of an online treasure hunt consisting of thirty mind boggling questions, conducted over two nights. After the completion of the first set of 20 questions, the top 55 teams went on to play the second and trickier round with more obscure questions and the ultimate frantic chase to reach the glory-bound end. The entire event went on for more than 12 hours, reaching the pinnacle of excitement on the second night. Finally, with a combination of skill, intelligence and speed, one team reached the treasure, thereby winning huge rewards and acclaim. Khoj received an overwhelming response from 608 participants from all over the country and an international participation too. Photoshop Workshop: SummIT, in association with Arena Animation organized a workshop on Adobe Photoshop on 13th March, 2014. The workshop was aimed at enhancing some critical skills of the students, which would aid them in presentations and competitions. It was a wholly hands-on exercise focus session, with all participants getting a step-by-step guide on how to learn the program. This session helped students in demystifying a complex application, adding value to their academic endeavors. Excel workshop: With summer internships round the corner, most students are required to make reports, analyze data and give presentations. Be it any role the students have picked, it requires a sound understanding of Excel to analyze and present it in a meaningful, succinct and effective fashion. Looking at this need for students, SummIT organized an Advanced Excel workshop on February 28th 2014. Conducted in a highly interactive fashion with full of hands-on exercises, the workshop was taken by the first year student Ganesh Janakiraman. The learning experience was highly appreciated by students as many of them believed that their newfound knowledge of excel was the need of the hour for them.
eLUMINATE: To clear the air around the career choices a student can take up in the IT industry, SummIT held a panel discussion on “Careers in IT and Consulting” during the time of the year when students have to make tough choices regarding specialization and electives. The panel consisted of Mr. Shankar Mallapur- Sr. Manager at Accenture, Mr. Sachin Kelkar - Head APAC Scale Program at Intel, Mr. Deepak Ghaisas - Chairman Gencoval Strategic Pvt. Ltd. and our very own Prof. Nilay Yajnik, chairman of Information Systems Area, NMIMS. The session was highly interactive and intuitive as all panelists gave real life examples, current scenarios and opportunities, changing trends and widening spectrum of this industry in times to come. It was insightful and highly relevant discussion for second year students who are just one step away from entering into the arena of the corporate world.
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SMAC: BIG OPPORTUNITIES FOR SMES -Aditya Agrawal and Abhinandan Pal NMIMS, Mumbai
INTRODUCTION Enterprises around the world have undergone a radical transformation in their way of operating over the past few decades. Technology and market are the primary drivers for this change. 20 years ago transferring data across the globe in seconds seemed surreal; no one could have imagined looking beyond brick and mortar stores. But, today the dynamics have changed entirely; there are numerous businesses with online presence alone. Every business wants real time information at their fingertips in a matter of seconds.
‘revenue focused model that helps them to be competitive and provide the best possible customer experience at least possible cost. To achieve this, every enterprise needs to be agile, context aware (about industry and customers, customer buying patterns and competition analysis), connected (with customer opinions, trading partners and suppliers) and have deep insights (from internal and external data from social media). The answer to all these challenges lies in the latest technological phenomenon SMAC.
WHAT IS SMAC? SMAC is 'the fifth wave' of IT architecture
Enterprises are steadily moving towards 5
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that blends social, mobile, data analytics and cloud technologies on one integrated stack, where each function enables another to maximize their potential delivering a business that is more connected, collaborative, real time and productive. According to a Cognizant report, by 2020, as many as 100 billion computing devices are expected to be connected to the Web, and corporations will be managing50 times the data they do currently.
THE PILLARS OF SMAC Social Media According to Business Insider report of 2013, Facebook has 1.3 billion users (almost 18% of the world population), of which 250 million access it through mobile. With such mind boggling numbers, social media has become an inseparable part of any company’s marketing strategy. Most of the big brands in the world have their official account on social networking websites to keep the customers constantly engaged with their brand.
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Mobility Mobile devices have changed the way people generate and consume digital data. Messaging applications like WhatsApp, Snapchat are used heavily to transfer text messages and multimedia content. Innovations in financial applications, games and social media applications have been very successful in engaging customers. According to AT Kearney report on The Mobile Economy 2013, there were 3.2 billion mobile users in 2012 and expected to cross 4 billion by 2017. Over the last half a decade, there has been a massive transformation in the way content providers utilize mobility for user engagement. Analytics Today, customers have a plethora of options available before them for each product. Reviews and practical demonstrations are increasingly replacing brand loyalty. Enterprises are increasingly using analytics to understand buying patterns of customers, their expectations and problems. 6
ARTICLE Enterprises are using this information to offer highly customized offerings. Predictive analytics is being extensively used to forecast demand and supply, thus helping in the development of proper risk mitigation strategies.
these services extensively showed more financial growth, then ones consuming less.
BENEFITS OF SMAC
Cloud Increased penetration of internet, inexpensive bandwidth provided by telecom operators coupled with an abundance of storage space online led to development of cloud technology. Cloud provides a platform, infrastructure and services accessible anywhere on earth through internet connection. For businesses, it represents a huge opportunity for saving the costs involved in capital infrastructure related investments. Also, since payments are made as per usage, it would suit operation model of smaller businesses.
SMALL AND (SMES)
MEDIUM
ENTERPRISES
SME employs over 40% of India’s workforce and contributes 17% to the GDP , growing at 5.29% CAGR. 55% of SMEs are concentrated in urban areas and 45% in rural areas. They play a vital role in generating GDP, creating employment opportunities, providing goods and services at lower costs and generating foreign exchange through trade. According to a study by Nathan Consulting, SMEs using internet reported a growth of 69% in customers, 51% in revenue and 49% in profits. SMEs who adopt internet can easily access data regarding competitors and reach out to customers from different geography. Further SMEs that had consumed 7
SMAC empowers innovative thinking and enables enterprises to adapt to digital environment; this in turn helps the SMEs to meet value expectations of customers. Low capital investments in infrastructure combined with social analytics helps SMEs to understand customers buying patterns within the available budget and tailor out more customized offerings to target audience. Social media serves as hunting ground for opportunities and serve as a source of unsolicited customer feedback. Mobile and Social media serves as an alternate channel to inform the customers regarding new products, services, campaigns, etc. SMAC also enables enterprises to leverage cloud computing for storing
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huge volume, multi-structured customer data, generated through social media, mobile, and analyze these data sets for business advantage at lower costs. Also, small businesses through SMAC can implement new strategic ideas at a faster pace than stronger rivals to gain competitive advantage.
SMAC IN INDIAN CONTEXT SMAC is the latest buzzword and quickly becoming an integral part of a company’s investment. Wipro has recently made two strategic investments: $5 million in cloud services company Axeda Corporation and $30 million in big data firm Opera Solutions. TCS has also set up a business unit in the Silicon Valley, to bring all SMAC services under one roof. According to Gartner, there will be 5 billion mobile devices and hence $52 billion worth mobile applications by 2016, India will have around 85 million Smartphones by 2015, and it will be a major driver for the growth of E-commerce. India’s cloud computing market grew to US $443 million a 36% growth from US $326 million in 2012. Internet users in India are increasing at a tremendous rate and providing opportunities for social media marketing. In 2012 the total number of users accessing the internet on mobiles
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surpassed number of users accessing the internet through computers. In May 2013, mobile internet users stood at 164.8 million users These statistics prove that India has a strong capacity to absorb true potential of SMAC.
CHALLENGES More than 90% of SMEs do not have access to the internet compared to 22% in China and 5% in the US. SMEs in India lack of usage of IT tools due to serve power cuts. Many of the rural areas which are home to SMEs endure long power cuts. Lack of IT skills and low internet speeds acts as a deterrent for small startups. Still a vast section of Indian customers is sceptical about products sold online, which discourages SMEs from investing in IT products. Lastly, lack of literacy and awareness aggravates the situation.
FUTURE SCOPE Social and mobility solutions are expected to be the drivers of productivity and engagement, while business analytics are expected to enable optimal decision making at affordable costs. A report on “Ahead of the Curve: Lessons on Technology and Growth from Small Business Leaders” found that if more SMEs in India 8
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China, Germany and US and found SME revenues could grow up to $770 billion. The next generation of technological innovation has started to take centre stage, dynamically changing the business model of SMEs all around the world and providing a more level playing field for all.
REFERENCES 1. David Michael, Neeraj Aggarwal, Derek Kennedy, John Wenstrup, Michael Rugman (2013), Ahead of the Curve.Lessons on Technology and Growth from Small Business Leaders.
Aditya Agrawal is currently pursuing MBA from NMIMS. He enjoys listening to music, reading books and teaching.
2. Annual Report 2010–2011. Government of India, Ministry of Micro, Small and Medium Enterprises.
Abhinandan Pal is currently pursuing MBA from NMIMS. He believes "for every one reason to smile there are hundred reasons to cry�. His first love was chess and current love is acting. 9
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AUTOMATION IN THE IT INDUSTRY -Akhil Mohan Sharma and Varun Katiyar TISS, Mumbai
AUTOMATION IN THE IT INDUSTRY In the recent past, there has been a widely growing speculation, on what could be the future of Indian IT industry? What could be the next growth driver for the industry? ‘Automation of the IT industry’ has emerged as one of the possible alternatives for rechristening the growth. ‘Automation’–A term coined by a Ford Motor Co. engineer in 1946, used to describe “a wide variety of systems in which there is a significant substitution of mechanical, electrical, or computerized action for human effort and intelligence”.
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It is the single most disruptive phenomena which has virtually transformed all the industries and the processes we can possibly think of. In the world of Information Technology it can be expressed as: “the creation and application of technology to monitor and control the production and delivery of products and services2.” It encompasses possibly all functions within an industry from installation, integration, and process design to maintenance and procurement of goods & services, management systems, and even the marketing/sales functions. The power of automation can be seen in the example of ‘Assembly Line’ which started out as 10
ARTICLE a novel idea in 1913, but is still at the heart of the automobile industry, and is continuously driving the business even a century later.
WHAT WOULD THE AUTOMATION FOR THE IT INDUSTRY MEAN? This question is testimony to the rapid pace at which technology is evolving. Not so long ago, IT was being seen as a lever which was used to automate the manual processes, increasing the efficiency and making the processes more cost effective. Now we are moving on to a stage where we are looking to automate even the IT industry!!! 70% of the top 1000 companies on the Fortune list in the past 10 years exist no more. The single biggest reason for the inability of these companies to sustain can be attributed to their inability to adapt. IT industry stands at the cusp of a similar transformation with regards to its ability to automate itself. Automation in IT, like in any other industry is inevitable. The idea of automation of the IT industry is totally mind boggling. It would totally transform the way business would be done. .The advent to automation would change the traditional pyramid model of the IT industry where companies look to generate their revenue in a linear way by adding human resource. “For example, to 11
add $1 billion of revenue, an Indian IT company typically requires 20,000-30,000 employees�. Automation of the processes will lead to a new model of revenue generation for the IT operations. With the swift commoditization of traditional plain-vanilla IT services, companies are on the lookout for opportunities to automate services where a human presence will no longer be required, thus disrupting the traditional global delivery model of IT service delivery; this is pioneered by Infosys. Also, it would disrupt the onsite-offshore model of delivery of services which is currently used to ensure round the clock availability of services to the client. We could in future look at a situation of having a completely automated in-house service delivery infrastructure at the client location. The thrust of the automation of IT processes would be in the field of IT infrastructure Management to start with. Companies like IPSoft and BluePrism have already ventured into the field of Autonomics, being the vanguard in the design of Software Robots and algorithms which have fundamentally changed the dynamics of IT service delivery. The Blue Prism software provides an alternative to traditional IT driven initiatives by enabling accredited business users, supported by IT, to rapidly, securely and flexibly build, validate ,and execute new business processes.
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In the Indian context, Infosys has already made giant strides into gaining the first mover advantage in to this sphere as Infosys3.0 as part of necessary long term realignment. It will be the first global service provider to realize this innovative model on a large scale, after entering in to a revenue sharing agreement with IPsoft. Infosys aims to reduce the cost of IT operations by up to 30% through the deployment of autonomics.
with. Also due to the generational differences among the work force in terms of baby-boomers, Gen-X and the Gen-Y, the rate at which individuals adapt to new automated systems would be different. Gen-Y would ideally be the first ones to make the mindset shift and embrace the new technological systems (Black, Holman, Nadon, Otter, Powell, 2007). Cues for the same can be taken from the Japenese Toyota Production Systems (TPS). Drawing parallels from the manufacturing/ automobile industry, IT can learn a lot from the implementation of the ‘Toyota Production System’. One of the fundamental underlying principles of the Toyota Production system was the Jidoka6‘Intelligent Automation: Automation with a Human Touch’.
AUTOMATION AT THE COST OF HUMAN WORK FORCE : LESSONS FROM THE OTHER INDUSTRIES
Automation in the IT industry would come at cost of human resources. Though automation is a business imperative for the IT organizations but it also has its sets of challenges. The biggest challenge would be in terms of a mindset shift. People, who have been used to carry out the IT processes manually, may find the process automation to be highly intrusive to start
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Learning’s from Toyota Production Systems
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ARTICLE The jidoka system, works on four principles (refer figure) for achieving the automation. The application of jidoka was instrumental in Toyota’s success. The learning’s from Toyota’s Jidoka system can be used in the case of Process Automation in IT. The routine IT processes which do not require much cognitive intervention can be automated to run by themselves. Human intervention can be limited to Supervisory actions in such a case rather than the traditional monitoring function. Also, human intervention becomes essential in improving the IT systems at the time of doing bug fixes (pokayoke: TPS) after a detailed root cause analysis of any abnormal situation. At higher levels of automation, even the bug fixes can be carried out by the automated processes, but such a system design may not always be very cost effective. The most notable feature of the Jidoka system is Human Resource Empowerment. The system helps in eliminating the mundane nature of task, helping in achieving a highly motivated and productive workforce. Also it helps in fostering of a culture, where people are valued for the job which they perform and are given a sense of ownership of the entire process.
ROBOTICS AUTOMATION: NEXT IN LINE FOR BPO’S Manufacturers have long leveraged the 13
benefits of Robotic Automation to reduce costs, increase production speeds, improve consistency and quality, increase flexibility on operations, enhance competitiveness and drive growth. Business process outsourcers in the past have looked to outsource their tasks and processes to the geographies where staff costs are lower and the skill sets are easily available. BPO is a multi-billion $ market with hundreds of BPO service providers competing for business. Typically, a BPO looks to take on accountability for a complete series of client service and back office processes and then work right through the contract period to reduce costs as quickly as possible to the inflection point when the contract becomes profitable. Typically in, BPO contracts a service provider desired to shrink costs by 50% to be able to deliver a suitable return in efficiencies to the customer as well as making a suitable margin themselves on the contract. To deliver this type of competence BPO’s have developed very complicated methodologies and measures and have used off-shoring to offer quality staff at lower costs than onshore staff. Robotic automation refers to a technique of automation where a machine, or computer, mimics a human's action in carrying out rules based tasks. In the context of back office administration, clerical Robotic Automation refers to automation where a
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ARTICLE computer drives existing enterprise application software in a similar way that a trained user does. This means that unlike conventional application software, Robotic Automation is a tool or platform that operates and orchestrates other application software through the existing application's user interface and in this sense is not ‘integrated’. Thus, with robotic automation the BPO service provider can build a “Virtual Back Office” with "Robotic FTE's9" to process manual, rules based back office processes at a new economic price point and at a new speed which makes automation viable.
but automation of the industry is definitely a step in the right direction.
REFERENCES 1. Robotic Automation | Virtual Operations. Blue Prism Robotic Process Automation Software 2. Toyota Global Site | Production System. Retrieved from http://www.toyotaglobal.com/company/vision_philosophy/ toyota_production_system/
CONCLUSION Automation in IT will be a gradual process and will be carried out in the form of Tech-
nological automations to start with for the next 3-5 years after which we may see more and more organizations undergoing a paradigm shift towards IT-bots at the work place. This change will be slow and would need an entire overhaul in the conventional business model of IT industry,
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Akhil Sharma is an electronics engineer and has worked for 22 months with an IT major, currently pursuing M.A from TISS (HRMLR).
Having worked as systems engineer for 30 months, Varun Katiyar is currently pursuing M.A. in HRM from TISSMumbai. 14
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RISE OF LOCAL E-COMMERCE PLAYERS -Shruti Farmania and Sudipta S IMI, Delhi The recent MTS India’s 3G Plus network advertisement “Born for Internet” features a baby who starts using the internet as soon as he is born. The advertisement even goes to the extent of showing the baby cutting the umbilical cord after searching on the internet, clicking a selfie with the nurse and then walking out onto the world of technology. The ad got a mixed response as some found it hilarious, some thought it was creepy and there were others who already started exploring ideas on how to target the babies that are being “born for the internet”, through their new e-commerce ventures.
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Who knows the next target customer could be babies!
The E-commerce market is evolving as they are targeting this tech savvy and “got to go now- ping me” generation. People are adopting technology faster than ever
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ARTICLE and slowly saying bye byes to the never ending queues before the trial room and are switching to online shopping. A few years ago, we used to spend hours in the trial rooms to buy a dress and many a time went home empty handed with sad faces. But now e-commerce sites give us the leisure of buying a dress right before going to sleep and finding it on our doorstep the next morning, trying it as many times as we want and even returning it within 30 days, if we don’t like it. Myntra has become the new shopping mantra for youth. Similarly, a decade back, Potter fans used to wait for months to get their hands on the latest copy of the Harry Potter series. Only a few were lucky to get hold of the coveted copy on the release date. But now when the Shiva Trilogy went viral, thanks to Flipkart; we could enjoy reading it the very next day. Bloggers and tweeters were already busy writing the reviews. The long queues lining up to grab a copy have become a thing of past. Travel sites account for the major chunk (around 70%) of e-commerce market share. They have replaced travel agents without which planning a holiday was impossible before. Now ticket details, best travel packages, hotels and even deciding the itinerary of your travel has gone online with numerous travel sites like Yatra, MakeMyTrip, Redbus,etc dominating the e -commerce market. Online portals give
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time flexibility and convenience to the customers. Today, there are even websites which help in shopping online by comparing prices and features and providing customer reviews. Sites like TripAdvisor, Zomato and GSMArena help us in taking informed decisions while planning a trip, treating our friends and buying new handsets. Now with a click of a mouse, you can even gift your friend a card, a bouquet of roses, or a latest fashion accessory. We had just got used to this, entire ready to let go off our touch and feel habit and then came Lenskart in 2012. It sells spectacles online. You might be wondering how one can buy spectacles online without trying on his or her face. Lenskart says just upload your picture and computer will adjust your chosen specs according to your facial dimensions and you can see which pair suits you the best. Cool, isn’t it? Now with the beginning of another year 2014, imagine any product and you can find it online with the “Add to Cart” option loaded with discounts tempting you to buy it.
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ARTICLE Major local players in the E-commerce industry are Indiaplaza, IndiaMART, Flipkart, BookAdda, Zomato, Tripadvisor, MakeMyTrip, Myntra and Tradus etc. Ecommerce transcends geographical, cultural, and political differences existing across regions and enables common business information and web sites for the entire world. Their development has completely revitalized different industries including jewellery, banking, telecommunications, hotels, real estate, software, and many others. There is a common characteristic in all these websites; they all follow cost leadership strategy and bet on tech savvy youth. These multitude sites have added new dimension to the shopping experience of Indian customers by reducing costs, saving time and enhancing online shopping experience. The increasing internet user base in India with rising disposable income and urbanization has paved the way for progress in this field. The real money is made over the long term through repeat sales and referrals. So customization of customer service, fairness in all business dealings and building well-loved & respected business through long-term relationships with both customers and suppliers is the key to success. Coupon code discounts, free shipping, package deals are some of the best practices followed by the Ecommerce industry. But as they say “All that glitters is not gold.” India has poor road infrastructure 17
and connectivity. Most of the ecommerce business model depends on courier services for delivering their product. The company’s cash has been blocked for several days due to the ‘cash on delivery’ method. So these businesses suffer huge losses as customers cancel orders if they are not delivered on time or simply return it after holding it for days. And also, customer loyalty is another big issue. Customers have many options to choose from and they switch wherever goods are available at a cheaper rate. Another challenge is that customers are wary of their privacy being invaded by sharing their details and using their card credentials online. So companies are taking crucial steps to secure their site by using antivirus and firewall protection and also using a secured bill payment method. These are some of the challenges that can be mitigated by increasing awareness and providing knowledge to the customers.
ROAD AHEAD Certainly, the E-Commerce industry is on an expansion path. The challenge that Ecommerce players are facing is the burden of high costs and negative profits. The talks of bringing in FDI to the sector can help in bringing cash inflows, but it may prove to be detrimental to the local players in terms of heavy competitions and acquisitions by global players which can be avoided by proper regulations in
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ARTICLE FDI. Thus the road ahead for the E-commerce industry is the path of customer. Although E-Commerce is indeed the new shopping destination, but the existence of rising local players is still hard to predict. The initial success and heavy traffic faced by local players can surely convert into success through cash inflows, excellent infrastructure and connectivity. Tapping the mobile users is also a necessary ingredient for success in the industry. The focus has to be distributed across all the online mediums including mobile apps. Another roadblock for the E-Commerce industry is the poor connectivity which is gradually improving which will help the online players. The number of internet users is also on an increasing spree and the untapped potential of India provides high growth for the industry, but the risk of failure in the Indian E commerce space also exists. The average online user is spending more time online than ever before which makes the E-Commerce market lucrative. By tapping the needs of growing customer needs who are switching towards online medium and mobile apps, we can definitely reap success in the industry. The inaccessible places and the low credit card and debit card penetration need to be tackled so that E-commerce can penetrate even into the hearts of India. Still there are over 50 million Indians who already shop online
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and thus E-commerce is all set to bloom in coming years.
REFERENCES 1. The Economic Times. India's e-commerce industry may reach $70 billion by 2020 - Economic Times. 2. EY Global.Rebirth_of_eCommerce_in_India - EY - Global
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Shruti is a random, spontaneous and crazy person who loves to meet new people and travel new places. Passion drives her and love heals her. 18
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SMAC OPPORTUNITIES AND THE “DIGITAL NERVOUS SYSTEM SMAC! SMAC aka SMAC Stacks refers to the combined use of 4 powerful technologies Social Media, Mobile Devices, Data Analytics and Cloud Computing by enterprises to develop and deliver value to customers. SMAC is gaining relevance in the modern day as it enables businesses to engage better with consumers across newer channels, understand consumer needs/ market developments better and do all these at sensible capital investments. The important part of a SMAC Stack is the "combined" use of 4 tech19
-Navaneeth K.P. IIM, Ahmedabad nologies - social media gathers data and inputs from the markets, analytics will crunch the numbers for insights and trends, mobile enables better engagement with stakeholders through convenient channels/devices and Cloud enables better and cost effective availability of technology infrastructure essential to run all 4 technologies in sync with each other.
TRENDS AND PREDICTIONS FOR SMAC STACKS Social, Mobile, Analytics and Cloud has
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ARTICLE established itself strongly in the market in the past decade. Information professionals are pitching SMAC as having disruptive potential and hence capable of adding new dimensions of competition in near future. The future however will witness increased convergence among these 4 technologies and it is projected that SMAC will account for 89% IT spending in 2014 (as per IDC Research). Global players in banking to coffee shops have realized the potential of SMAC in enabling better service delivery and reducing their dependence on high overhead back office maintenance. Global research and analyst firm, Gartner have projected that SMAC business will be worth $104 billion by 2017. Currently SMAC spent accounting for 10% of total software business revenue which is expected to rise to 25% by 2017. Even though the shift to SMAC has been happening since the past 3-4 years, business opportunities are getting bigger due to higher penetration of Smartphoness and mobile internet usage. It is expected that there will be 5 billion mobile devices by 2015 and mobile app revenues alone will stand at $52 billion. Globally 1.5 billion users will on-board the social media opening up business opportunity worth $34 billion. The converged SMAC Stacks will attract not just fortune 500 but also smaller firms with global interests. In turn, this convergence is bound to catalyze a host of merg-
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ers and acquisitions in an attempt to acquire skills by service providers. (Gartner) Offshore Insights predicts that SMAC will attract 15-16% of budgeted spent on IT services and outsourcing from Global 2000 firms. India will export $15 billion worth of SMAC software and services by 2017. The firms surveyed expect to spend, in the next 2 years, around 10% of the total IT budgets on big data and analytics, about 9.5% on cloud services (including software as a service, and platform as a service), around 5.3% on mobile apps and devices, and 3.4% of social media. NASSCOM’s strategic review 2014 report suggests that Indian software industry’s exports will grow at 13% in this year to $87 billion riding on growth in demand in SMAC space.
Gartner
has
projected
that
SMAC business will be worth $104 billion by 2017 Proliferation of sensors and Smartphones is enabling growth opportunities in SMAC space. Also new mobile devices and apps are changing the way businesses are done and redefining the role of IT strategy in a firm. However SMAC also opens up newer security threats and system vulnerabilities, which, if not handled appropriately can cause immense damages to businesses. Firms need to be prepared to go on cloud and equip themselves 20
ARTICLE to handle the volumes of big data that will be gathered from their customer base through a variety of mobile devices over the internet. Firms need to be clear what information is relevant and what analytics can give them actionable advantage. All these could slow down the adoption of SMAC Stacks in the short term. It remains to be seen which among these trends will gain strength over the others and that will ultimately decide the future of SMAC stacks.
SMAC OPPORTUNITIES & THE “DIGITAL NERVOUS SYSTEM” Digital nervous system, a term coined by IBM and later popularized by none other than Bill Gates in his book ‘Business @ the speed of thought’ is a vision which describes a highly efficient IT infrastructure that creates a zero latency enterprise analogous to the nervous system of a biological organism. SMAC has the potential to enable the development of such a digital nervous system for organizations by enabling seamless interactions across stakeholders based on real time data capture and analysis. All of these can be run on secure cloud based services on demand. Entrepreneurs should focus on developing products and applications that can form various parts of this nervous system architecture. The biological nervous system consists of a variety of elements that 21
serve unique functions in unison with other parts of the human body to enable an elegant human life which can detect and respond to stimuli to sustain itself for a long term. Taking forward the analogy, products and services can be developed in following 2 areas; (i) A central nervous system to coordinate and process volumes of data gathered internal & external to the system and trigger actions across the organization based on real time availability of data (ii) A peripheral nervous system to monitor and capture information and pass it on to a central system from within and external to the organization. There is a need to develop communication media and languages that can enable fast response and carry a heavy load of big data.
Specifically, products and services to capture data, transmit data, process data, present data, store data are up for grabs in SMAC space. SMAC should redefine the way businesses are done, but should focus on integrating it with existing
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ARTICLE infrastructure and protocols to permit faster adoption and seamless changeovers.
SMAC IN SUCCESS OF NETFLIX Netflix destroyed and rebuilt their business model riding on the power of SMAC Stacks. They took the Blockbuster model and promised the customers that they will deliver movies at the consumers door step. By embracing SMAC, currently NETFLIX doesn’t drive to its consumers to deliver content; they can send it via internet. They maintain infrastructure and back end systems that enable them to deliver content to their customers via internet without compromising on typical movie watching experience to their customer. They analyze individual consumer viewing patterns and content suggests that might appeal to the individual. It engages well with its audience, a peer’s preference is automatically projected on to other peers in the individual’s circles thereby making the content more relevant and enabling social expression.
cheaper. Cloud services are not a new form of database, and entrepreneurs should realize that it is a “different” data management system. SMAC is to be looked at as new way of modelling business realities and hence capable of disrupting the way businesses operate. SMAC space is growing large and growing fast. Gartner calls it “nexus of forces”, IDC Research calls it “SCAM”, Cognizant calls it “SMAC”… is a lucrative business space and it is not for the slow movers. As discussed by Friedman in his celebrated book “The World is Flat” (in the SMAC space) “if something can be done, it will be done. The question is will it be done by you or done to you”.
REFERENCES 1. Business Technology News and Information Site | ITWeb. How the SMAC stacks will steer your business growth | ITWeb. 2. Business Standard: SMAC to take a few years to reach 'critical mass': Murthy | Business Standard
CONCLUSION Companies view SMAC as an overwhelming technological. It's a new tool which, if mastered can enable businesses do things that were previously not doable and hence be a source of significant competitive advantage. SMAC should not be looked at as old wine in new bottle, a tool to do things a little better, faster or
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Navaneeth is doing his PGP from IIM- A. He is a carnatic vocalist and an astronomy enthusiast. 22
SPOTLIGHT SOCIAL SAMOSA “
“Social media takes time and careful strategic thought. It doesn’t happen by accident.”
both the founders Aditya Gupta and Ankita Gaba, who had experience in the same field, realized that there was a absence of a platform where they could showcase their own work and get quick access to the social media developments in India. The social Samosa’s primary focus is on how brands are leveraging social media in order to influence the consumers. Social media marketing is not only about creating viral events on Facebook or YouTube or Twitter, but it also requires significant investment of time and money to compete and get attention of millions of eyeballs. Since its inception, it has grown at a significant rate and has won awards such as Win-
― Brian E. Boyd Sr., Social Media for the Executive Though social media do not have a long history; the industry came into significant presence only 5-7 years ago where everyone is continuously learning in the industry. In such a situation SocialSamoaa came up with an aim to aid this learning by reviewing campaigns, organizing events – online and offline, tracking trends, interviewing experts in the field and conducting case studies. A new generation marketing journal, Social Samoa also engages in job listing and agency features, in an effort to understand the budding industry.
ner of Blog of The Year award at WAT Awards 2013. It is also one of the few Indian startups shortlisted for the Web Summit 2013 in Dublin, Ireland.
Social Samosa came into existence when 23
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SPOTLIGHT VDOPIA With a big dream, three friends Srikanth Kakani, Chhavi Upadhyay and Saurabh Bhatia have started a venture which today gives a tough competition to international giants like Google, Facebook and Yahoo in the field of mobile advertising. According to Gartner, Inc., the revenue generated by mobile advertising globally reached 11.4 billion in 2013 and will reach $24.5 billion by 2016. This will create many new opportunities for application develop-
ers, advertisement networks, mobile platform providers and communications service providers. And here comes Vdopia which is the forerunner in reaping these rewards.
In March 2008, Vdopia launched an application for Indian media companies to run advertisements. The next year, it launched video advertising platform in the United States markets. Later in 2011, Vdopia launched a new technology which helped Indian clients to do live streaming of video advertisements in the online space. They also work closely with many advertising agencies. Vdopia’s exclusive algorithms mine through large heaps of consumer data to make sure that the ads are being served to the right target audience. Vdopia has made strides since it is incorporated in 2008. It is serving 95% of customer base in India and also became one of the leading mobile advertising platforms in the United States. Their next focus is in the Asian market space for further expansion. In the words of the founder Srikanth Kakani - “It is just the beginning”.
Vdopia has created a patented platform that helps serve video advertising at a very less cost and in a seamless manner, not only for several online publishers but also for the mobiles. Their clientele includes big names like Coca-Cola, McDonald’s and P&G. It all started as a private video sharing website and then in order to monetize their business they decided to develop a platform, which is used for publishing ads during video and hence generate revenue from it.
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TECH FOCUS AUGMENTED REALITY Are you fascinated by the talking images in newspapers, smiling faces in paintings talking about their lives – does this seem coming straight out of the Harry Potter movies. Well, it is a magical world in the movies, but the line between magic and reality is thinning fast. Welcome to the world of augmented reality. Augmented reality (AR) or an interactive print, is a copy or live view of a physical & real-world environment, on which sensory elements such as sound, video, graphics or GPS data are augmented (or supplemented) by computer-generated input. This happens through simple steps:
match the human eye fluidity of 25 images per second. AR uses powerful algorithms for this technique to work. Continuous research is progressing to develop all of these features which are boosted by growing performances and capabilities of equipment, devices and internet. Augmented reality actually blurs the line between what is real and virtual. People confuse this technology with the virtual reality, which creates a computer generated environment for interaction while maintaining a sense of interest. Augmented reality, on the other hand supplements the real world with the audio and video.
1. Recognition of the image or surrounding area by the device 2. Tracking the real time location of the image / object or face/body 3. Superimposition of media (which can be audio, video, text) onto the target image
The usages of AR are umpteen. With changing times and maturing technology, AR applications have found its place in almost all spheres of business. For instance, magazine Elle has used this feature in their AR friendly feature, wherein one can focus his tablet on the film review in the magazine and see the promotional trailer of the movie. If you like any make up product in the magazine, input your image using the AR app, find the right product that would suit your completion and order the product through the app instantly. Heinz has also used AR for in a campaign, wherein if AR device is pointed to cover sticker on the bottle, it gives details of a recipe of that goes along with the Heinz ketchup.
This process takes less than the 40ms, to
The future of AR is very promising and fas-
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TECH FOCUS -cinating. This technology can help marketers, engineers, architects, doctors to work with precision, reduce costs, foresee the future and help in better decision making. When on a holiday while you roam around,
Augmented reality is our future as marketers, strategists, managers and home makers. And we are most benefitted as consumers, because this technology makes us more selective, better informed, better decision makers and help us to have better lives.
you can not only look for the various hotels around, but also view room types and prices on your device and book a room right away. If you are planning to buy a house or an office space for your company, it’s difficult to imagine how things will actually appear. Hence use the AR software to arrange the virtual furniture, decide on the dÊcor, color, tapestry and determine the costs and plan accordingly. You wish to educate your kid and take him to the museum. Let your AR device hover over the excavations from the Harappa culture, and let the live description about the civilization and history play on the device. Your child can actually learn about everything in the museum effectively and will remember it.
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NEWS FY 2013-14 NEWS ROUND-UP BITCOIN’S RISE AND FALL... AND RISE? 2013 saw the phenomenal rise of the virtual currency Bitcoin. From around $13 in January 2013, its value rose to a high of above $1200, before it lost half its value in December 2013 due to restrictions imposed in China. But it rose again to around $950 in January 2014. Issued first in 2009, where it is headed is anybody’s guess, but it has certainly caught the attention of regulators and governments, who will be monitoring it closely. rights to use Microsoft patents in its services. The deal is seen to be a win-win situation for both the giants while facing stiff competition from Apple and Google.
MICROSOFT ACQUIRE NOKIA’S HANDSET BUSINESS
In September 2013, Microsoft announced that it was acquiring Nokia’s handset business for $7.2 billion. Nokia manufactures a majority of the Smartphones running Windows Phone 8 OS, so it should create synergy for Microsoft. The deal is expected to be closed by March 2014. Microsoft will get a 10-year license to Nokia's patents at the time of the closing, whereas Nokia will retain its patent portfolio. Nokia will also receive reciprocal rights to use Microsoft patents in its services. The deal is seen to be a win-win situation for both the giants while facing stiff competition from Apple 27
and Google.
BLACKBERRY’S DOWNFALL The year spelled troubled times for Blackberry. The Blackberry 10 OS received good reviews, but sales of the new Z10 and Q10 models failed to take off. It had to write down nearly $1 billion worth of unsold phone inventory as a loss. Also, the proposed takeover of Blackberry by Fairfax Financial Holding Ltd. for $4.7 billion failed to materialize. Fairfax is led by CEO Prem Watsa, who is a former Blackberry board member.
STEVE BALLMER RETIRED; SATYA NADELLA TOOK OVER AS NEW CEO OF MICROSOFT Steve Ballmer retired as CEO of Microsoft after 13 years of shouldering the responsibility. He has been succeeded by Satya Narayana Nadella, previously Executive VP of Microsoft's Cloud and Enterprise Group. The transition came at a decisive time, when there is speculation on future of Nokia’s handset business, and the direction
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NEWS that Microsoft will take as a whole. 2014 promises to be an important year for Microsoft where Satya Nadella will have a big role to play.
TWITTER GOES PUBLIC In a much awaited event, Twitter finally went public in November 2013. The IPO was priced at $26 per share, but opened at above $45 following all the hype. The closing price of $44.90 gave the company a valuation of $31 billion. A fact to note is that Twitter has not turned up a profit in seven years of existence, though revenues have been increasing.
FACEBOOK AGREED TO BUY WHATSAPP FOR $19 BILLION Facebook recently surprised the world with the announcement to acquire WhatsApp for $19 billion. Experts consid-
ered the deal to be overvalued; however Mark Zuckerberg stated that he believes that it is worth even more.
till date. According to Zuckerberg, WhatsApp will continue to operate independently within Facebook, complementing Facebook Messenger. However privacy groups are concerned about potential collection of WhatsApp user data by Facebook.
NARAYAN MURTHY RETURNED CHARGE OF INFOSYS
TO TAKE
Founding member Narayana Murthy returned to guide Infosys out of troubled waters. The return was welcomed by analysts and market alike. His focus is on cutting costs, retaining top customers and improving efficiency. He has also involved his son Rohan in his efforts. However, the reshuffling of the top leadership has led to the exit of at least eight top executives, including Ashok Vemuri and V. Balakrishnan.
AMAZON TESTS DRONE DELIVERIES In December, Amazon chief Jeff Bezos shared details about testing drones called Octocopters, for making deliveries within 30 minutes of ordering. And we thought pizza was quick. But the prototypes could take up to five years to become reality, as the US Federal Aviation Administration is yet to approve the use of unmanned drones for civilian purposes. But Amazon will be ready when it gets the green light.
This will be Facebook’s largest acquisition
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