Annual Issue, March 2011
SummIT (The Technology Cell @ NMIMS)
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Foreword Dear Students, The SUMMIT team this year too has excelled in making information technology reach out to all of you. They had conducted several guest lectures and panel discussions ranging from topics such as “Careers in the IT Industry” to “The Changing Role of the CIO”. Specific mention must be made of the fact that the SUMMIT team organized a highly interactive session by Prof. Mohan Tanniru Dean and Professor of MIS at Oakland University, USA, for students of the MBA 1st and 2nd year. I am also delighted to see a huge amount of interest from the students to participate in the Computer Associates Global Case Study Competition. I am sure you will all benefit immensely from this competition. It really does not matter who wins. The very fact that you have participated is a big achievement and it will help you in the long run. I wish all the second year students all the very best in their careers and I look forward to their involvement in
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SUMMIT activities next year too – as an Alumni, of course! I also wish all the first year students all the very best in their Summer Projects. The first year students will soon decide on their choice of electives. As I had explained to all the first year students in the Open House session on March 21st, our Information Systems Area electives have been designed keeping the industry requirements (IT Industry , Consulting Industry , User Industry) and also the roles in mind. The demand for an MBA with Information Systems Major or Minor is very high. Therefore, if you have any questions about careers, roles or Information Systems Area electives please feel free to drop in any time and get your queries clarified. I wish you all once again all the very best for the future! Regards Dr.Nilay Yajnik Professor and Chairman – Information Systems Area SBM, NMIMS
CONTENTS Table Of Content EDITORIAL ………………………………………………….…...5 ABOUT SUMMIT ………………………..…………….………...6 ARTICLES
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Are we ready to harvest in the clouds ? ….…………....…….. Solutions to the IT industry to penetrate
13 Latest Trends in the field of IT ….……..…………...………...22 Indian I.T. and the 2020 vision ….……..…………..……….28 the SME market ….……..……..….……..……..….……...……...…
The new era challenges of IT: the 2 C’s-
33 Innovations in IT……..….……..……..….……..……..…….……..38 Why West, Why not East…….……..…………………...…....….42 BRAIN TEASERS.………………………….…….……….……..48 Consolidation and compliance …….……..……...............…
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TEAM SUMMIT………………………………………....….…..50
Editorial
“You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new. “ -Steve Jobs MANTHAN is a unique initiative undertaken by SummIT. It invites articles all over the top B-schools of the country like IIMs, XIMB, etc. and publishes the top ones. MANTHAN has also enabled the confluence of diverse industry perspectives on IT and business. This year’s theme: IT 20-20 Vision and strategies
Best Wishes TEAM MANTHAN, 2011
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About SummIT SUMMIT is a student body at NMIMS that involves itself with developments in the fastest changing domains of world business, i.e. Ideation & Information Technology. IT, being essentially borderless, needs to be understood at a macro level and ideation is what keeps any business going, be it new business or running existing business efficiently. The rapid changes in the business environment have resulted in increased complexities and responsibilities for the information manager today. The club members therefore regularly bring to campus distinguished people from the IT world & other prominent industry people to interact with students and to get broader perspectives on pertinent issues of future importance. Activities (2010-11) Ideas – Our Flagship Event IDEAs is the flagship event of SummIT. This is the event where panel discussion or Seminars are conducted. The purpose of IDEAs is to be the only source which keeps the budding managers updated on the industry front. This year the Guests of Honour for IDEAs were: Mr. Lokesh Bhagwat, VP-Strategy, Patni Computers Mr. Milind Rumade, Sr. Manager, Accenture Mr. Shailesh Mahajan, Director, AmSoft Consulting Theme: ‘The current and future trends and the role of MBAs in IT industry’. Microsoft Office 2010 Workshop SummIT cell has always stressed on adding 6 value for the students and there was no better way than asking Microsoft to conduct a
session on Microsoft Office. The session was conducted by Dr. Nitin Paranjape, the Microsoft Guru. The session was a huge success. SummIT cell received accolades from all the attendees. Paragana Khoj - the online treasure hunt game was organized on November 17, 2010, as part of the college annual fest, Paragana. It was a very successful event. Ideate Ideate, is the interactive IT newsletter. Every issue invites articles on various broad topics of IT. This year, SummIT launched two editions of Ideate. Zero Respect ‘Zero Respect’ was the inter-collegiate LAN Gaming event organized by the SummIT cell as part of Euphoria 2011, cultural event at NMIMS, Mumbai. It was conducted in a 2-day period (March 5-6th) and featured the popular multiplayer games (“Counter Strike 1.6”, “FIFA 11”, “NFS Most Wanted”, “Call of Duty” MW II). The gaming room was equipped with gaming boards and LED lights, projectors, etc. Rock music played while the gamers took on the battle. The brand new and powerful Alienware laptops on which the gaming was conducted added to the ambience and gave the participants a rich gaming experience.
Manthan- the IT e-Magazine Manthan is a unique initiative undertaken by SummIT. From last year, Manthan has gone online in e-versions. Manthan has also enabled the confluence of diverse industry perspectives on IT and business.
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1st Prize
Are we ready to harvest in the clouds ? Rajkumar Singh, SIBM Pune Sitting on a bench in my campus on lavale hill, eating hot samosa under naked sky, I heard few of my batch mates talking about cloud computing. My friend sitting beside me jump into discussion (most common time pass in Bschool) arguing about the benefits and threats of cloud computing. Computer science engineer were there to flaunt their knowledge while nonengineers (hard to find in a B-school) were looking equally puzzled. After watching the discussion one of non engineer anxiously enquired -What is cloud computing? Before anyone can answer properly, one of my friend working on his laptop immediately googled it (the work MBA’s are best) and opened the first link and read “Cloud computing is - Internet based development and use of computer technology whereby dynamically scalable virtualized resources are provided as a service over the Internet.” The reaction of the non engineers said it all. To elucidate it our marketing student jump into discussion claiming cloud computing reduce cost, you don’t need to install software etc. Proper definition comes from a fin guy –“Cloud computing is a technology that uses the internet and central remote servers to maintain data and applications. Cloud computing allows consumers and businesses to use applications without installation and access their personal files at any computer with internet access.” The idea of the "cloud" simplifies the many network connections and computer systems involved in online services. 8
Cloud computing is a general term for anything that involves delivering hosted services over the Internet. These services are broadly divided into three categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). The service that we are going to discuss is SaaS –It is a class of software that is available on demand and, oftentimes, directly from an application service provider. One of the best known SaaS applications is Salesforce.com, a customer relationship management (CRM) application used by many businesses. Under Salesforce.com’s SaaS model, users connect to Saleforce.com’s web-based system and buy only enough licenses for their users. Licenses under their model aren’t "per computer" as is the case with a lot of other software. After gathering momentum over the last 5 years, the “cloud” and “software-as-aservice” are now more than mere buzzwords, witnessing massive adoption from all sectors of the economy, particularly the small and medium business segment. In a recent report, IDC predicts that over 2010-2014; SaaS will grow six times faster than traditional packaged software, reaching over $40 billion in revenues by 2014. 9
So once cloud computing is clear then discussion start on it being a blessing or a threat in the future
Benefits of cloud Computing 1.Predictable anytime, anywhere access to IT resources 2. Flexible scaling of resources (resource optimization) 3. Rapid, request-driven provisioning 4. Lower total cost of operations Challenges Managing a Cloud Environment Cloud computing enables organizations to provide reliable, on-demand services in a flexible and affordable manner offering the benefits of open standards, scalable systems and service oriented architecture. With these benefits also come new complexities that must be properly managed. Rapid growth of virtualized resources across multiple environments Relationship of virtualized resources to underlying physical infrastructure Health monitoring and problem determination across a physical and virtualized infrastructure
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Threat of Cloud computing
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Even though some threats are present in cloud coming but future look too promising for Cloud computing. Closing it with the statement of David Girouard, the president of Google’s Enterprise business, he said “we believe that 100% web is the future of the cloud computing model” and so do we.
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2nd Prize
Solutions to the IT industry to penetrate the SME market K. Meyappan, LIBA Chennai GROWTH OF SMES The total spending by Indian small and medium enterprises on IT, which has been growing rapidly over the past few years, is set to continue at 24 per cent, says a new study from Microsoft-AMI Partners. This growth rate is the fastest amongst all BRIC (Brazil-Russia-IndiaChina) countries, with Russia, China and Brazil following at 22.9 per cent, 20.4 per cent and 19.4 per cent respectively. The SMEs provide employment for about 85% of all factory related works more than 80% of IT industry belongs to SME, but they contribute only 30%. It is estimated that, outside the agriculture sector, the SMEs account for more than half the GDP and employment in the country. SMEs are getting all the focus across different sectors including manufacturing, trading, distribution, professional services amongst others. Acquiring more customers, growing revenues, increasing profits and beating competition – SMEs are obsessed to break away and become large companies. As operations grow from a ‘garage-like’ size to larger establishments, apart from revenues, employees are growing. In India, small and medium industries play a vital role in the growth of the economy. Small industries have a 40% share in industrial output, producing over 8000 value-added products. They contribute nearly 35% in direct export and 45% in the overall export from the country .
COMMON PROBLEMS IN SMES: Limited ability to gather information regarding the market opportunities, upcoming changes and competitors Limitations to get client /prospective partner, employee verifications in new territories 13
Lack of technological infrastructure Too many items to be procured, hence difficulty in management. Unavailability of vendor performance systems. Too much manual effort required. Inspection reports required on time. Lack of expected receipt information. Information not available on time. No co-ordination in scheduling and set-up of material. Completion not as per schedule. Difficulty in integration and predicting outcomes in terms of finished goods. Cash flow forecasting. Difficulty in handling different sets of purchase orders. Need to keep track of enquiries. Need to remind vendors. Alerts on stock levels. payroll, inventory, finances, personnel, suppliers, and customer demands Accounting software, easy to use and requiring less manpower Communicating needs to vendor and to large firms. Informatization Promotion.
SERVICES TO BE PROVIDED BY IT: The IT services must concentrate on only the common SME related issues and not on niche market, thus they can get on large markets. The services provided must be easy to use and does not require much training and can be used immediately after installations. The services must also make sure no special training is required to operate the soft14
ware. The installation time and time taken to go o operation must be reduced(Cycle time reduced to bare minimum). The trial pack of services for 1 to 2 weeks must be provided. The new products can be updation of existing product with minimum cost, since only 2% of entire SME has good ERP or any system this market is small but still has ability and willingness to new system. The 45% has just started to implement in technology and they require completely new product where as nearly 40% has no access to new technology or even PC’s, since most of Indian industry has only IT solution provider 40% of market cannot be looked in but the other 55% of market can be captured with only IT solutions. The overall IT costs must be reduced by user training, hardware investments, service, support and IT staffing. The pricing techniques provided below can be used even in hardware implementation by which 40% of the big market can be captured. THE SERVICES MUST BE: Visibility must be very high Intuitive – Works the way you do Adaptable – Adapts as your business needs change Predictable – Reduces your risk and cost with industry best practices built in. OTHER SPECIAL SERVICES TO BE PROVIDED BY IT INDUSTRY: Tracker tool which shows the highly used application or software. The communication setup to contract IT vendor easily. Billing methodology, where paying and bill value can be accessed and checked. Website that shows the new products, advancement in existing prod15
uct. There should be a website where, the old softwares or leased ones can be traded to other SMEs Online query clearance must be provided to all SME from primary or secondary trading. The software updating which are free should be done through online and online payment facility must be provided to the SMEs
NEED FOR NEW PRICING TECHNIQUE:
SMEs are not ready for high initial installments If technology updates or changes required the, they should have achieved at least the break even point. SMEs are not sure how new technology would provide ROI. Most of software applications may not be used so instead of spending on unwanted software applications others can be used. Some SMEs might not use the software to that level others do, so same initial pricing may look very odd to SMEs. All SMEs may not require same level of software, so few SME might choose lower level at lower cost. With limited tolerance for risk, they prefer to spend more on incremental investments that drive additional benefits or ROI from previous IT purchases but only 2% of entire SMEs have proper IT infrastructure.
IT ISSUES IN PRICING: Intellectual property must be maintained Reaching larger markets at no loss or profit. The cost of marketing should be reduced so that it can be transferred to its customers. 16
Boost Adoption rates of new customers Control Cost for acquiring new customers and up-selling the existing base Generate Healthy Margins and Profit Generate new customers by allowing existing customers to sell their software to other SMEs
INNOVATIVE PRICING METHODOLOGY: Pricing method by which each software product can be priced: Since not all software packages are homogeneous and many applications are available with in a software package it is difficult to price software package. After initial investment, more or less IT spending is on knowledge and work force level rather than on any infrastructure or sources. IT industry must take into account a new breed of customer that judges software by its ability to contribute value to the organization—measuring where, when, how much, and how well software is used. The pricing of project must be based on its demand and also based on market available. The paper is on penetration in Indian SMEs so the pricing methods followed are penetration pricing techniques. Penetration pricing is the pricing technique of setting a relatively low initial entry price, a price that is often lower than the eventual market price, attracting larger market and making same clients to buy or recommend their dependents to buy higher end solutions from the same client. The pricing must not be complex which may not attract the customers, the 17
profit doesn’t come last even when we like to penetrate into new market so profit is a must in any new technique developed, the IT industry must list their solutions and cost clearly on website which helps them to choose the product. The most of the software solutions are add-ons hence price must also based on the existing product cost. New pricing techniques. Mobile pricing technique Leasing technique Rental method Monthly installment package Usage pricing Differential pricing MARKETING: The cost of marketing SME related IT product must be reduced so that it can be transferred to SMEs. The market must be wide spread at the same time quickly reach the SMEs end. The awareness of the product and related issue in them should be focused and reach the every end of the SMEs. TECHNIQUES: MULTILEVEL MARKETING: In word of mouth has always been the best way to attract new customers. The use of each customer to attract new customer by which marketing cost of attracting each new customer is transferred to existing customer and providing them with better product and cost saving. Thus each customer becomes a parent nod which on time will produce new child which 18
apparently becomes new parent. Thus the marketing grows without much cost spending and benefits are reaped. RETAIL SALES: A cluster of SMEs which are interdependent may require same product, by retail sales all these clusters can be attracted and we can add up new market. SECONDARY MARKET: By creating secondary market for existing customers to sell their product, new customers can be attracted and also new customers join the market it also enables the existing customer to buy any new product since existing not that comfortable can be sold. AFFILIATES MARKETING There is a vast network of affiliates on the internet. Affiliates are people who will promote and sell our software products from their websites, in return of a small commission for every sale. The compensation may be made based on a certain value for each visit (Pay per click), registrant (Pay per lead), or a commission for each customer or sale (Pay per Sale), or any combination. BLOGS: The IT industry must concentrate on developing separate blog where SMEs can update their request and also interact on various software tools and their pricing techniques. TRIAL PACKAGES: Most important part of software marketing is providing trial packages of 19
software at least cost to understand the value added by such projects to SMEs. POPULAR PRICE POINTS There are certain "price points" (specific prices) at which people become much more willing to buy a certain type of product. For example, "under Rs500" is a popular price point. Dropping your price to a popular price point might mean a lower margin, but more than enough increase in sales to offset it. Low initial investment will attract more SME who can be upgraded to new better products based on the returns they produce. CONCLUSION: The IT spending by SMEs are growing YOY but Indian IT industry is still focused on outsourcing phenomenon which is highly dependent on world market, dollar value and many other factors. The SMEs are ready to adopt IT but it must show clear ROI and time spent on it must be fruitful. It is not necessary for IT to produce high end software attract SMEs a software package which would solve the common problems of SMEs could attract a million. The most important part where IT has to concentrate is on pricing methods by which can attract the SMEs. Most of SMEs are reluctant because of high initial investment and fast changing technology as main reasons. The IT spending by some companies also concentrate completely on HR and accounting software which are not updated from time to time. Hence there is a large SME market in India which needs no high end solution but solutions which could give good returns and long lasting. The multilevel marketing and trial packages, creating secondary market for old softwares etc are must to attract the SMEs in India. Maintaining IPR is must to even think about of entering 20
SMEs. Additional information on global SMES Kind of products expected by global SMEs:
The software with non enterprise solution is still 31% across the globe is research finding by SIIA. The reasons to adopt IT by SMES
It also shows more than 35% spend on communication and more than 55% on efficiency. 21
3rd Prize
Latest Trends in the field of IT Vivek Mogili, MDI, Gurgaon This article tries to focus on the key technological trends in the field of Information Technology, which is going to change the landscape of the Industry and is going to bring about a tectonic paradigm shift in the way business is conducted. This article also does not delve deep into the different trends and the sweeping changes that the same is going to bring about but rather emphasizes on providing with a broad overview of the different trends and technologies and what exactly are they at a macro level. Introduction: Of late there has been a considerable amount of changes that the IT industry has been witnessing-be it in the form of Cloud Computing, Social Communications and Collaboration, Green Computing,Next Generation Analytics, Social Analytics, Unified Communications, Virtualization and Storage Techniques and Development of Knowledge Centre especially for SME businesses- just to name a few. IT Behemoths like Microsoft, HP, Dell, IBM, Apple, Intel and Wipro are some of the companies that are investing heavily in the above mentioned technologies to gain the first mover advantage and to later capitalize on the same. Now, if we get into the article and try to understand the different technologies and how impactful they can be. Cloud Computing: Cloud computing to put it in layman’s terms-is a computation, software, data access, and storage services that do not require end-user knowledge of the physical location and configuration of the system that delivers the services. Parallels to this concept can be drawn with the electricity grid where end-users consume power resources without any necessary under22
standing of the component devices in the grid required to provide the service. Cloud computing is a natural evolution of the widespread adoption of virtualization, service-oriented architecture, autonomic and utility computing. Details are abstracted from end-users, who no longer have need for expertise in, or control over, the technology infrastructure "in the cloud" that supports them.
Fig: Cloud computing sample architecture The following are the key characteristics of Cloud Computing: Multi-tenancy Reliability Scalability(On demand scaling possible at ease) Cost (There are no Capital Expenditure costs involved, only Operational Costs) Reliability Security(due to centralization of data and better utilization of security focused resources) Metering(can be easily measured) Companies like Microsoft and SalesForces.com are providing exclusive solutions in this sphere and are making substantial margins and exploiting the scales of economy that this sphere offers. Advanced Analytics: 23
These are the five advanced analytics trends that one can expect to see in the near future. Predictive Analytics Model Building: In 2009, there was a lot of buzz about predictive analytics. For example, IBM bought SPSS and other vendors, such as SAS and Megaputer, also beefed up offerings. A newish development that will continue to gain steam is predictive analytics in the cloud. For example, vendors Aha! Software and Clario are providing predictive capabilities to users in a cloud-based model. While different in approach they both speak to the trend that predictive analytics will be hot in 2010. Operationalzing Predictive Analytics: While not every company can or may want to build a predictive model, there are certainly a lot of uses for operationalizing predictive models as part of a business process. Forward looking companies are already using this as part of the call center process, in fraud analysis, and churn analysis, to name a few use cases. The momentum will continue to build making advanced analytics more pervasive. Analyzing complex data streams. A number of forward-looking companies with large amounts of real-time data (such as RFID or financial data) are already investing in analyzing these data streams. Some are using the ondemand capacity of cloud based model to do this. Expect this trend to continue in 2010. Social Analytics: Analyzing unstructured text will continue to be a hot area for companies. Vendors in this space have weathered the economic crisis well and the technology is positioned to do even better once a recovery begins. Social media analysis really took off in 2009 and a number of text analytics vendors, such as Attensity and Clarabridge, have already partnered with online providers to offer this service. Those that haven’t will do so this year. Additionally, numerous “listening post� services, dealing with brand image and voice of the customer have also sprung up. However, while voice of the cus24
tomer has been a hot area and will continue to be, I think other application areas such as competitive intelligence will also gain momentum. There is a lot of data out on the Internet that can be used to gain insight about markets, trends, and competitors. These are the following things that any Social Analytics software primarily tries to gauge: Volumetric tracking of conversations Affinity / Sentiment measurement How are people saying it? Social Graph Measurement Monetization Unified Communications: Another key trend in the field of Information Technology that is fast catching up is-Unified Communications. UC to put it in simpler terms is the integration of real-time communication services such as instant messaging (chat), presence information, telephony (including IP telephony), video conferencing, data sharing(including web connected electronic whiteboards aka SMARTBoards), call control and speech recognition with nonreal-time communication services such as unified messaging (integrated voicemail, e-mail, SMS and fax). UC is not a single product, but a set of products that provides a consistent unified user interface and user experience across multiple devices and media types. In its broadest sense UC can encompass all forms of communications that are exchanged via the medium of the TCP/IP network to include other forms of communications such as Internet Protocol Television (IPTV) and Digital Signage Communications as they become an integrated part of the network communications deployment and may be directed as one to one communications or broadcast communications from one to many. UC allows an individual to send a message on one medium and receive the 25
same communication on another medium. For example, one can receive a voicemail message and choose to access it through e-mail or a cell phone. If the sender is online according to the presence information and currently accepts calls, the response can be sent immediately through text chat or video call. Otherwise, it may be sent as a non real-time message that can be accessed through a variety of media. UC finds its applications in the following areas: Telemedicine Education (especially distance education) Healthcare Financial Services Hospitality Defense and Space Research Virtualization and Storage Techniques: The fundamental idea behind virtualization is to abstract, emulate and facilitate aggregation among different capabilities. Figure 1 below shows how storage-related virtualization techniques and technologies can be deployed to address more than storage pooling and volume management in an IT environment. Virtualization can be done at many different locations in many different forms, including on a server using software, on an appliance using software, in a storage system or on a switch using software and hardware. Where to put and deploy the technology depends on your needs and preferences. Virtualization technologies and solutions can have great benefits for almost any IT organization regardless of size. Specific types of virtualization solutions and technologies may have more relevance for different size environments. When it comes to virtualization technology, start simple and evolve, 26
understand your scaling issues, and keep in mind what the specific virtualization technology is designed and intended to support. Realizing that different solutions are targeted at various functions, and then aligning those capabilities to your needs, can be the key to a successful storage virtualization technology deployment. Done right, virtualization technology should be transparent and reduce your management activities and eliminate complexity.
Conclusion We are living in interesting times where change is the only constant and only those companies that embrace change wholeheartedly would stay relevant in this era of cut-throat competition. References http://www.ciol.com/customsites.aspx http://www.gartner.com/it/page.jsp?id=1454221 http://en.wikipedia.org/wiki/Cloud_computing http://fbhalper.wordpress.com/2010/01/04/five-predictions-for-advancedanalytics-in-2010/ http://www.slideshare.net/gcahill/practical-social-analytics http://www.enterprisestorageforum.com/management/features/ article.php/3640401/Storage-Virtualization-Its-More-Common-Than-YouThink.htm
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4th Prize
Indian IT and the 20-20 vision Kaustubh Giri, NMIMS Where we stand: The Indian IT industry has come a long way since its modest beginnings post Globalization of the Indian economy. It has traversed the long journey of partnering global IT giants to provide services for their products to becoming the world’s premier destination for outsourcing software solutions. The IT-BPO industry revenues have grown from 1 billion USD in 1990 to 65 billion in 2009. Rapid advances in ICT (IT, telecom, broadcast) have fuelled the growth in this sector. It currently contributes upto 14% of India’s GDP, i.e 30% of India’s entire service sector revenues. There are several key factors involved which have had a role to play in this success stories. We will now try to examine these factors in detail: The workforce: At the heart of India’s progress in this industry is a workforce which is talented and is conversant with the English language. India has managed to produce skilled professionals through its robust school and graduation system which is a pre-requisite in knowledge based industry like this. What has contributed significantly to this is India’s impressive leap in literacy figures over the last two census surveys. India’s literacy rate has risen from 52 to 71% in the last two decades. Relative familiarity with the English language assures that this workforce is well equipped to handle the middle and lower level demands of the IT value chain. These include the BPO-KPO and maintenance functions which constitute a huge chunk of India’s IT pie. 28
Cost competition: The lower and middle level jobs in the IT sector are highly dependent on cost competition. India’s key strength in this field is that it can produce superior technical expertise at similar costs to other competitors like China, South East Asian countries, Mexico etc. The Demographic Dividend: The break-up of India’s population map reveals the fact why investors from all over the world continue to bank upon India’s unimpeded growth in this field. It is among the world’s youngest population and this potential will be exploited even more fully in the coming decade. In stark contrast to aging populations of the west and Japan, India will have only 19% of its population above the working age as compared to 40% and above in the rest. The IT industry as a result of these factors has been growing at an average rate of 25-30% over the past decade, a substantial part of its revenues come from US, which accounts for 61%, while Europe accounts for a large part of the remaining. Where we are heading According to a recent estimation by NASSCOM, the 3 scenarios for India in 2020 read like this: Low growth: 185 billion USD in revenues Medium growth: 255 billion USD High growth: 350 bn. These figures are testament to the fact that India can maintain its advantage for a long time to come if it adapts itself continuously to changing business scenarios.
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Among the revenues, BFSI is the highest contributor with a share of 38%, followed by telecom, manufacturing and retail. Where we should strive to reach As is clear from the facts, India has established itself as a pioneer in middle and lower level demands of the IT industry. We must now strive to move up the value chain and provide services which are compatible with changing business models around the globe. India now has to gradually move away from competing on costs to start competing on quality. The key parameter for this is investment in R&D. The blue ocean ventures are still a stranglehold of the developed nations and India must strive to enter that arena. That means, that in future our Indian IT companies should not just be implementers of cutting edge technologies, knowledge and management systems like SAP, Oracle etc, but should be innovators in these fields. When India is able to achieve that, then the revenues from the ownership of these technologies will be significantly higher and it will promote a culture of innovation in the industry. A move has to be made to move away from BPOs to KPOs and from maintenance and support dominated services to developing customized business solutions and IT information systems. As business all over the world have integrated and will continue to integrate Information Systems, ERP into their fabric in an even larger way, the solution providers will be the ones who will be the most sought after, and India must tap that potential opportunity. The Stumbling Blocks 30
The global economic meltdown of 2008-09 was an eye opener in many ways for India, it raised questions about the sustainability of India’s outsourcing led growth. The global IT expenditure was cut down heavily and 3 main factors emerged which could threaten India’s supremacy in the field Competition: India’s success story is one worth emulating and our competitors have started to equip themselves with the infrastructure and education system to compete with us. In the near future India will face fierce competition from Mexico, Vietnam, and several other countries who will compete on pricing for the lower end of the IT industry, name BPO related opportunities. A Weakening Dollar: The constantly declining exchange rate of the US dollar since 2004 is a warning bell to Indian outsourcing as it is the prime currency for trade USA’s increasingly protectionist stand: The democratic US government has already shown signs of imposing government sanctions on outsourcers in order to generate more employment in their local economy post recession. Education and Diversification: The 2 answers Indian IT’s heavy dependence on USA and the BFSI vertical was clearly highlighted during the recent meltdown that sent the banking world plummeting and jolted the US economy in particular. It also set back Indian IT industry in no small measure. Education: India needs to invest more in higher education and invest more in R&D to fully exploit the opportunities discussed above. Diversification: India needs to reduce its continued dependence on USA and BFSI vertical in order to sustain its progress. It should work towards harnessing the unlimited potential in other areas of the world which are in31
vesting heavily in infrastructure. Domestically, India’s retail and manufacturing is showing huge signs of expansion, along with the rest of the world. It provides India the opportunity in the fields of SCM, CRM and PRM to design customized business solutions for these products. Also venturing into business with regions other than USA, like Europe and Asia will reduce the dependence on Dollar and outsourcing would depend on multiple currencies like Pound and Euro which are gaining ground on dollar. Also a move has to be made from BPOs to KPOs so as to engage a a more quality oriented services industry, which will result in higher margins and steer India clear of the cost competition cannibalism. These steps will ensure the sustainability of India’s relentless growth and guide it towards India’s 2020 IT vision.
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5th Prize
The new era of challenges of IT: the 2Cs Consolidation and compilance Shubham Prakash, NMIMS The firms gunning for global dominance in their respective areas of business are increasingly dependent on technology for a competitive edge. From ensuring that research is independent & high quality to maintaining smooth and controlled operations in an efficient manner, organizations must leverage technology to reduce costs, save time and squeeze every ounce of value from their information assets. With globalization being the word of the century, experts predict a handful of dominant players reigning the markets in line with survival of the best theory. As firms look for growth overseas, many have considered both Greenfield and brownfield operations as a part of their growth strategies (setting up base in new locations or even acquiring existing line of businesses in the destination nation). The primary challenge of the dominant players who aim to gain global leadership are creating a scalable environment, lower costs, maintain a high uptime to support critical functionalities of businesses and automating manual processes and employing IT tools to reduce time required for several processes. In addition to cost and efficiency benefits, it is mandatory for a firm to invest in IT solutions that help the organizations meet the compliance standards set by the regulatory body in that particular industry. The merger of multiple firms poses many challenges and management of resources & IT systems is the primary hurdle. One of the primary aims of merged companies is to reduce costs by sharing resources and eliminating redundancies. It is a nightmare for IT managers to: 33
Eliminate existing systems (from the smaller company) Upgrade resources (in the parent company) making the systems scalable for accommodating the growing needs of the smaller (acquired) companies Creating a migration plan and it’s execution henceforth Some examples of consolidation and compliance challenges are as follows: Bank of America’s IT revamp to meet the consolidation strategy: BOA acquired FleetBoston financial in 2004 for $47 billion through a cash and preferred stock arrangement. This was one of the largest takeovers by the bank in recent times. Soon, a request for preparation of a consolidation plan was made and the IT departments of both organizations got to work. It was realized that the road ahead was a lot tougher than they expected as both banks were already employing complex IT systems for their operations. The result was a huge loss in license fees as most systems of FleetBoston had to be done away with and migration plan spanned three years which in turn led to problems with operations, monitoring and control. Henceforth, BOA’s technology group started looking at adopting more scalable systems and technologies to be in line with the Bank’s strategy of inorganic growth. Besides the immediate benefits in cost and ease of management, EX proved its mettle when it successfully accommodated new mail systems as a part of BOA’s inorganic growth since 2005. In August 2007, BOA announced the takeover of Merrill Lynch: making it the largest financial services organization. For the IT managers of both the firms, the mail infrastructure seemed to be impossible to integrate for they were based on different systems altogether. While BOA employed IBM’s Lotus Notes, Merrill Lynch had a license for Microsoft Exchange 2003. Because of the critical nature of the mailing requirements in Merrill Lynch, it was impossible to migrate to Lotus Notes. The in house technology groups decided to use EX to 34
archive mails from both the banks and maintain the storage and backup.
Before (Pre-FleetBoston era)
After EMC EX
The consolidation of data was completed well within schedule and EX enabled both the mailing systems to co-exist in the merged organization. When expanding across geographies, there is a constant pressure to meet the different compliance requirements across different geographies. The legalities of document retention and e-mail retention is as follow in different regions: SEC and FINRA rules are applicable to the BFSI sector Tools for good business governance and ethical audits of business practices Enable periodic enterprise audit with a turn-around time of 48 hours. Data retention period As specified by the US state in question. (California: 36 months) 12 months (Europe, APJ and other US states) Access control: 35
Extended user search enabled in APJ Specific user search in Europe & US to meet the privacy laws
Importance of Compliance in the era of sub-prime crisis Due to nature of the business, banks are often under the scrutiny of regulatory authorities to produce their records when asked for in stipulated time. In the recent sub-prime crisis that rocked the world, 14 firms were investigated by the FBI to assess the effect their operations had in creating the financial bubble. While many a firms were able to provide the data as per FBI’s request, several firms were caught off guard including prestigious names like Goldman Sachs. Running a complex environment spreading over numerous servers across the world, it was discovered that the compliance dated software solution of some of these firms was unable to meet the search compliance standards of the government. The loss of trust in such cases translates to incalculable long term losses for firms.
A drive to meet both these issues is primarily being canvassed by the concept of virtualization of the infrastructure. Virtualization refers to the creation of a virtual machines that acts like a real computer with an operating system. Most technologists foresee a future where hardware systems are deemed irrelevant as user’s only interaction remains with a virtual ma 36
chine. Hence companies using different servers, routers can still maintain compatibility once they merge. Products developed within virtualization giants such as VMware as well as Citrix promise to enable transparent operations on a cloud infrastructure by saving hardware costs at the same time in the near future. The products would help Standardize cloud partitions and govern cloud provisioning across the infrastructure of the organization.
References http://www.vmware.com/partners/programs/alliances/financialservices.html www.emc.com/collateral/industry-overview/h3170-industry-solutionsinvestment-banking-iov.pdf http://www.bostoncapital.com/ http://www.advisormail.com/forms/email-compliance-checklist.asp http://www.bobsguide.com/guide/news/2008/Jan/31/ Goldman_Sachs_investigated_by_FBI.html
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6th Prize
Innovations in IT Tejas Kulkarni, NMIMS In the wake of current economic downturn in the US , the IT industry is hit quite hard resulting in lower growth rates. Pricing pressures , volatile exchange rates has resulted in project cancellation and delays. Companies in BFSI , Retail, Manufacturing are facing bankruptcy in US. Amidst all this, Cognizant Technology Solutions seems to have weathered the storm compared to other Indian IT giants and especially WIPRO which is roughly double in terms of size and scale of operations. In the last twelve months, WIPRO lagged Cognizant both on account of gross margins and operating margins. Cognizant’s image of an American company, coupled with its reinvestment strategy is helping it not only avoid the political ‘chop shop’ rhetoric, but also narrow gap with the Indian firms . Cognizant, due to its significant offshore presence (almost 75% of the company’s employees are located in India)has developed a fine blend of business culture of India and the West. This flexibility appears to be helpful in penetrating the accounts of global corporations. Cognizant’s revenues from the US geography are 26% higher than Wipro and just 5% short of Infosys’. The gap in revenues from the banking and financial services (BFSI) vertical has reduced to $19 million a quarter when compared with Infosys. Cognizant’s share of incremental revenues or new business increased from 28.3% in June 2009 to 35.9% during June this year when the company added $145 million — more than twice what Wipro and Infosys managed during the same period. The question is how did it achieve it in such a less time ? The answer is : specific IT innovation strategy named Two-in-a-Box
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Two-in-a-Box (TIB) The TIB model begins with a relationship management team, with deep industry expertise, assigned to the place of business. The team’s leader, the Client Partner (CP), works onsite to absorb the client’s culture, operational processes, challenges and business goals. Then, working closely with senior members of client’s IT management team, the CP — who typically holds an MBA degree — assists with client’s strategic planning initiatives. Another critical TIB team member is the dedicated global delivery manager (DM). The relationship between the CP and DM is essential to ensure that Cognizant’s IT services are delivered with precision and that they are tailored to client’s unique needs. More tactically, the CP functions as the communication conduit, translating IT requirements to the DM, and helping coordinate services delivery back to you. The CP and DM are in constant contact, working in lockstep to ensure that the Cognizant team operates as an extension of client’s organization. The success of the TIB model is directly linked to the quality and pedigree of Client Partner and Delivery Manager, each of whom typically has around 7-10 years of experience. They know what it takes to deliver superior IT that aligns with business strategy and corporate objectives. Tight Integration Starts at the Core Most third-party IT service vendors have delivery models that work in one of two ways: Thrown over the wall Once an outsourcing contract is signed, all decision making reverts to project managers offshore, who remotely monitor client needs and performance milestones. Senior staff occasionally visit the client’s premises, either when they are called on the carpet to explain delivery challenges or to attend project planning or status meetings. This keeps them at arm’s length from the client, with a tangential understanding
Pass the baton In this model, project management responsibility is enacted by an ever- changing array of vendor representatives or business units who are responsible for various project phases and deliverables. Without one central point of contact, accountability for project performance is rarely established, or, if it is, it becomes a hot potato continuously
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The TIB model
Cognizant’s TIB relationship model represents a radically different approach to IT services delivery compared with offshore providers based in India. When problems emerge, the client’s IT team leaders must call or e-mail the service provider’s account manager, who then searches for the appropriate offshore staffer to coordinate a response. Whether it’s strategic guidance, project management assurance or timetables for problem resolution, the answers tend to lie offshore and often require an after-hours or pre-work conference call to resolve. Frustrations simmer and can boil over as minor project shortcomings and delivery delays elongate into insoluble challenges and missed opportunities. To nip these issues in bud the following model is developed. Cognizant’s founders foresaw that it wouldn’t be enough to provide lower cost delivery and mastery of leading-edge technologies, combined with ever elevating degrees of domain expertise. They realized that the company’s success would also need to be defined by its ability to: Build exceptionally close relationships with clients by investing in onsite teams focused on delivering business results that meet or exceed expectations (i.e., cost containment as well as operational flexibility and process improvements. Maintain tight strategic alignment between the client’s IT strategy and business goals to ensure exceptional satisfaction. 40
Enforce strict accountability and governance through rigorous project / program planning discipline and delivery best practices to mitigate risk associated with traditional offshore IT outsourcing approaches (i.e.., pass the baton, thrown over the wall). Continuously measure results to keep engagements on track to ensure predictable and positive business outcomes. Regularly transfer knowledge to help clients facilitate continuous improvement and to identify new ways to leverage technology for business advantage. The results Cognizant’s founders believed they could differentiate the company from its competitors by offering a hybrid model that blended the best of traditional consulting firms. Dubbed TIB, this relationship and delivery model has become a critical competitive differentiator for Cognizant. It is embedded in Cognizant’s culture from the upper echelon of the company’s management team. Importantly, the model is consistently cited by clients for delivering a superior customer experience like “extremely satisfied” or “satisfied” with their work with Cognizant. This level of satisfaction compares with ratings of consumer brands studied in recent years by JD Power and the American Consumer Satisfaction Index
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Guest Article
Why West, Why not East? Aditya Das Financial Consultant, Delhi adityadas07@yahoo.com Soumendra Roy Assistant Professor, NIMS, Delhi soumendra.roy@gmail.com ………..I had at one time believed that the springs of civilization, would issue out of the heart of Europe. But today when I am about to leave the world, that faith has deserted me. I look around and see the crumbling ruins of the proud civilization strewn like a vast heap of futility, and yet I shall not commit the grievous sin of losing faith in man. I shall look forward to a new dawn. To a new chapter in history, when the holocaust will end and the error will be rendered clean, with the spirit of service and sacrifice. Perhaps the dawn will come from this horizon, from the east, where the sun rises. …. Rabindra Nath Tagore, in his last public speech on his 80th birthday (7th May, 1941). HISTORY TEXTBOOK It may sound a little offbeat to start with Rabindra Nath Tagore’s vision from “Crisis in Civilization”, but if the second thought is given a chance it will speak for the relevance of the above speech even in today’s IT industry, atleast, through the eyes of margin profitability and organic and inorganic growth. With the advent of market economy rouse the sun in IT horizon in India. From then on, IT stood for the sunshine industry and companies like, Infosys, TCS, Wipro, just marched, with flying colours till date. Through this path of prosperity, many of the Indian IT companies of smaller entity went thin, returned fat. 42
WATERLOO Demand supply mismatch surfaced in 2007, what marked the black era of recession. Innumerable causes could be found for recession, but none of that entire gamut of reasoning could do away with the crisis in question. The entire IT universe started with knee-jerk reaction. Little by little many of them ceased to exist. Perhaps we have got space, within this span to think about it. There’s no denying the fact, the entire Indian IT or ITES companies, were mostly dependent on the west as solution and service providers. Hence, the west had been the sole hunting ground for Indian IT companies. It can be described in two ways: It took a little more time for the east to get updated with IT boom. There had been little scope for implementing IT solutions in eastern part of the world. JAB JAAGO TAB SAVERA Almost sixteen years have passed since the IT sunrise we talked about. Now we are not only habituated but exposed to IT industries. Even in India 43
where, good percentage of population still fights to discover from the lines and curves their very names, IT and ITES companies have been the household names. And IT solutions have been a must in our Indian lives either in the form of telephony, internet, banking, ATM services, to count the list …. KUMBH MELA After a certain interval of time the general elections in India come, so come the promises from the south and north block of our honorable parliament house. Needless to say, this is to woo us which in course of time become our woes. Belonging to the same democratic fraternity, Uncle Sam’s country does the same abra-ka-dabra before presidential election. Each incumbent President must promise to his fellow citizens that if voted to power, he is most likely do away with all the outsourcing and generate employment. Now the Indian bell and Uncle Sam’s bell have the same intention. However, politics is not our intention. What we intend to say is the repercussations of such comment of Uncle Sam’s uncledom on Indian bourses. IT companies irrespective of their sizes lose fat. MOTHER INDIA Roti, Kapra aur Makaan Come what may rain or sunshine the basic three human quests for food, cloth and shelter will never ever extinguish. And to address the premention quests we are to look for fresh avenues of food production and preservation, clothing and to address the third quest, reality giants are already here. In a nutshell, as a part and parcel of each industry services from IT and ITES companies are going to be a must in every sphere of productivity. Thanks to our vast and her ever increasing population. The IT renaissance is to be borne and cultivated in this country. There are endless possibilities. Hopefully, I am not spinning a yarn. I am trying in a humble way to 44
give a running commentary of the time to come. Just think of one India divided in her self-reliant villages, cities and urban areas, where each village will be efficient enough to meet its energy needs. Its road infrastructure, health, education and above all well-being. It is in the hands of today’s IT leaders and the upcoming leaders in the industry to shape their solutions or services to walk side by side with those explorations, with those possibilities. It might sound a little euphoric to think of a village self-sufficient for its energy needs, but if looked through different angle, India has a coastal area of more than 8,000 kilometers that promises integrated and IT guided fishing activity both for domestic and overseas consumption. Apart from that, this long stretch of our coastline promises hydro-electricity. Give me POWER Never the less, the Himalayas in the north have innumerable brooks and tributaries, which can enhance this power generation. Now in absence of IT and IT enabled services, we can’t simply dream of the possibilities to come out. So far the question of power generation, the gigantic power plants can hardly meet Indian energy needs so far, neither they are likely to do in the time to come. It’s only the decentralized way of power generation that can feed the growing needs. Needless to say, both IT and ITES will have got uncountable avenues to explore and thereby, earn the revenue. Power generation is not the sole way of productivity but an inalienable part. What I intend to say, so many fields of productivity are there, like food production , where , genetic engineering is becoming day by day a part and parcel of our agricultural activity. Again looking at the agricultural production, India’s total productivity during the last few fiscal years went from deep to deeper, but the demand is ever increasing and seems to be endless. Hence to guide genetic engineering as well as carrying on biochemical activities, to make both ends meet (demand and supply), IT and ITES companies will have a fair share of interference.
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Distant Chug Chug As an integral part of agricultural and industrial productivity, transportation is to grow in manifold, road, railway, air. Although Indian railway has the second largest network in the world, many parts of our country are still in the doom of untouchability. Hence, to link the untouchables with the touchable, this present network is to grow atleast by 100 %. Now, if Indian railways grow by 100 %, IT and ITES companies, that provide solutions and services to Indian railway alone have got a head space of atleast 100%. So far I talked about the possibilities of would be Greenfield activities, which are to give our IT and ITES companies a vertical movement, but in the existing scenario too, they have got enough scope for lateral movement. Tring Tring Through the floodgates of market economy, telecom companies made a bee-line for Indian market. Airtel, Aircel Vodafone, Rim, Idea, MTS‌. are here to beckon so many telecom service providers from within and outside of our country. Hence, telecom solution being an integral part of each service provider, IT companies has spaces to grow fat. So far, only 60%of our total population carries a mobile handset along with a sim. Here, let me put you in the know, that in city and urban sectors, it’s often found a single individual carries more than one mobile handset as well as sims. Having said that my argument is that actual number of Indian population that uses a mobile phone is way below sixty percent, (say35 -40%). Hence, telecom space has got sixty percent or more to go up, so is the space for IT and ITES. Apne Ghar Me Bhi Hai Roti Indian business and commerce dared the boundaries of sea from time immoral. History speaks of Indian trade and commerce that made their presence felt in Sumatra, Java, Bornio (now Asia Oceana zone). This overgrowing population across the globe may prove to be a boon for every industry, 46
rather than a curse. Hence, Indian industries and service sectors have got every possibility to tread the same waterway it initiated in pre- sultanate era. So, is the scope for IT and ITES? In a word let’s conclude like: Des Paraya Chhor Ke AA Jaa ......................................... Apne Ghar Me Bhi Hai Roti References: www.infosys.com www.tcs.com www.wipro.com
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Brain Teasers 1. When can you add 'two' to 'eleven' and get 'one' as the correct answer? 2. A farmer in Somerset owns a beautiful pear tree. He supplies the fruit to a nearby grocery store. The store owner has called the farmer to see how much fruit is available for him to purchase. The farmer knows that the main trunk has 24 branches. Each branch has exactly 12 boughs and each bough has exactly 6 twigs. Since each twig bears one piece of fruit, how many plums will the farmer be able to deliver? 3. If you were to step into a sealed room filled with 100% methane gas and strike a match, what would happen? 4. Benjamin can never tell a lie. Fred can never tell the truth. One of them said, "The other one said he is Fred". Which one said that? Explain. 5. Benjamin and jack were in a 100 metre race. When Benjamin crossed the finish line, jack was only at the 90 metre mark. Benjamin suggested they run another race. This time, Benjamin would start 10 metres behind the starting line. All other things being equal, will jack win, lose, or will it be a tie in the second race? 6. How can you throw a ball as hard as you can, and make it stop and return to you, without hitting anything and with nothing attached to it?
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49 1. When you add two hours to eleven o'clock, you get one o'clock. 2. None. A pear tree does not bear plums 3. Nothing. The match cannot spark without oxygen. 4. It was Fred. Since Fred can never tell the truth, Benjamin couldn't have said, "The other one said he is Fred" since this would be a true statement made by Fred. 5. Jack will lose again. In the second race, Benjamin started ten metres back. By the time jack reaches the 90 metre mark, Benjamin will have caught up to him. Therefore the final 10 metres will belong to the faster of the two. Since Benjamin is faster than jack, he will win the final 10 metres and of course the race. 6. Be outside and throw it upwards
Brain Teasers’ answers (upside down)
Team SummIT Faculty-In-charge: Dr. Nilay Yajnik Yogeshwar Kumar Venil Shah Samir Sethi Anusha Bonda Anshul Mahajan Tarun Gupta
Ankit Jain Rajat Anand Mayank Golcha Bijo Mani Roshni Bansal
Contact Us at summit@nmims.org Website: http://summit-nmims.co.in/ Address: Narsee Monjee Institute of Management & Higher Studies (University), JVPD Scheme, Vile Parle (W), Mumbai 400056 Tel: 26134577/26143177 Fax: 26114512
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Annual Issue, March 2011