Trying to keep the customer satisfied

http://www.thehindu.com/arts/books/article3443207.ece


Rama Bijapurkar's  book titled

`Customer in the boardroom?'
- Crafting customer-based business strategy

Trying To Keep The

Customer Satisfied

Consumer might be the king, but in this Net Age, however, he remains a largely misunderstood king! No doubt, all and sundry in an enterprise fall head over heels to win over this king. How to win the trust of this king, who is without a kingdom but helps others to build a business empire? If the answer is as simple as it appears, every enterprise would have been a successful one. Understanding this king is easier said than done. While trying to understand their consumer, enterprises, often times, end up misreading them. Nevertheless, failures are squarely blamed on insensible consumer who can't appreciate the value for money the enterprise is offering him/her! To discover the truth, an enterprise has to do two things — take a deep look into itself and wear the hat of a consumer.

Consumers are, more often than not, treated in a generic way. What is missed in the process is the fact that consumer minds are not standard processing machines. No two minds think alike though they both yearn for the same product. Understanding different consumer minds which have unique processing capabilities is indeed the key to the success of a business enterprise in the evolving marketplace.

The author of the bestseller, We Are Like That Only, Rama Bijapurkar argues how an enterprise “can't be like that” if it were to win the consumer and yet remain profitable in an intensely competitive environment. Rather than focusing on “what a consumer does?”, it should train its eyes on “why a consumer does what he does?”

We have come a long way since the 1990s when the country opened up for liberalisation and globalisation. India, with an over a billion plus population, has been a star attraction since then. Its sheer size has excited many to make a beeline for India. If size can be translated into market, success is an assured thing. But it doesn't happen that way. “The demand side is not going to be easy to manage in the future as it has been in the past because there are far greater customer, competitor and environment challenges that the next trillion dollar of GDP (gross domestic product) will pose,” she points out in this book under review, Customer in the Boardroom — Crafting customer-based business strategy.

Rama Bijapurkar articulates with simple and yet insightful examples the need for the business to align with the consumer thinking. “One man's food is another man's poison,” she points to the adage. She goes on to reiterate the strangely often ignored fact that two minds approach a similar issue differently. The success of an enterprise depends largely on its ability to decipher this facet of a consumer mind. A restaurant at an airport serves tea at differentiated price points — tea with sugar at low price and that without sugar at a higher price! With vending machine in the vicinity dispensing only sugar-mixed tea, the restaurant has sensed an opportunity to serve the needs of tea drinkers who avoid sugar. Take ice cream, for instance. For a young one eating ice cream is akin to ‘rebellion'; for teenagers, it is a mood elevator; and for older ones, it is “stomach fill pleasure at the lowest possible cost''. The value spaces for coffee are relaxation, stimulation, social symbol et al. So, discovering ‘why he buys' is a sure fix answer to success than understanding ‘what he buys'. Once it discovers the ‘why' of it, an enterprise then needs to work out ways and means of delivering the value to a consumer without hurting itself.

Classic examples

Though winning a consumer is the much-professed objective of all business strategies of enterprises, more often than not, the path pursued by them is set in the light of competition. This, according to the author, results in sub-optimal business strategies. The South West Airliners abroad and Nano near home are classical examples of shapers. There was something unorthodox about their ideas. But their success owes largely to their customer-based approach. Ipso facto, the book underscores the need to look beyond and at the larger picture and not be bottled down by the industry definition of market. In this modern age, too many things chase the consumer. Unfortunately, “most business strategy development processes do not work with the notion that markets are made up of money that people spend to fulfill a need or want and not of the sales of companies that sell a certain widget,” she says. The supply-side orientation to business strategies can go terribly wrong and hurt an enterprise. “Businesses that look like dogs when viewed from the supply-side lens become stars when viewed through the customer lens,” she argues. Understanding the entire ‘need area' of a consumer opens up huge possibilities for an enterprise beyond the industry-restricted opportunities. A lack of knowledge on the ‘whole need area' can result in under-investment. One needs to “escape the myopia of the served market and the current product concept” and emphasise on “human needs”, argues the book. And, it is not just enough to identify and design a product that suits the customer need and elevates his experience. How an enterprise delivers it by walking the talk is very important and will identify the ultimate winner, Rama Bijapurkar argues, making a strong case for bringing the king consumer back to his rightful place at the discussion table in the boardroom of an enterprise.

The book is extraordinarily simple for the way it goes about revealing the mind of the king consumer. And, it gives more than a clue or two for the failure of an enterprise. An easy-to-read-and-comprehend writing style with mundane facts as illustrations and logically flowing presentation – they all make for a nice reading and fresh education.

History And Me

History & Me

Twenty-one summers have been added to my age since that night on this day (May 21) way back in 1991. The incident, which re-wrote the history of India, however, remains firmly etched in memory. That was the first time I saw him live and dead together! As a young correspondent of Business Standard, then a part of the Ananda Bazar Group, I was searching for `news fodder' that day. As the search was getting me nothing and leading me to nowhere, I was aimlessly moving around at the spacious Bazar Office at Pattulas Road in Chennai (now occupied by the Mahindras). Suddenly, fellow-journalists from sister publications (the always-young Bhagwan Singh and ever-enterprising G.C. Sekhar) pulled me into their `election sojourn'. Since you don't have any work, why don't you also join us? they said. They were going to Sriperumbudur to cover the election rally of Rajiv Gandhi. Since I was `jobless' that day, I felt it wasn’t a bad idea to see Rajiv Gandhi in `flesh and blood' since I had not seen him at all in my life time. When I informed my visiting Deputy Editor Rajagopalan (who is no more), who had come from Calcutta to cover the election scene in the South, of my decision, he said in a nonchalant way, ``Why not sir. He (Rajiv Gandhi) will blabber something. And, we can make nice analysis out of it!'' That was how I happened to be in the car along with Arun, Bugs and GC. As usual, lazy Vinay Kamath excused himself. Even today, he regrets for not being a part of our team that fateful evening!

Ahead of time

We were ahead of time as we reached the birth place of Ramanujar. The Congress leader had not arrived for the rally. Indications were that it would take a longer time for him to reach the venue. So, we all headed for a nondescript hotel near the bus stand and had light refreshments. As we returned to the site, Bugs saw R.K. Raghavan, who was supervising the security arrangement for the rally that evening. Since Bugs and GC knew him well (as they are the political writers), they engaged him in a little chat. As a co-passenger, I could clearly pick up what they were discussing. I heard Raghavan telling them that Tamil Nadu ``is not Andhra Pradesh.''  ``Fortunately, we don't have Naxal problems here,'' he quipped.

Kurta man

As we moved around, photographer Haribabu, known to both Bugs and GC, introduced to them a `kurta man' as his friend. After a cursory exchange, GC moved ahead and I followed innocently.  We headed to the press enclosure, which was on the right side of the dais. We waited a while.

A loud thud

All of a sudden, the excitement level had reached a crescendo. We were all looking at one direction - from where the Rajiv Gandhi convoy was coming (toward the dais). Shouts rented the air, as the crowd greeted their leader with slogans. Like the television camera chasing the ball which is heading for a sure four in a cricketing game, all eyes panned to the direction from where Rajiv Gandhi was coming. All of a sudden, we heard a loud `dubb' (noise). Split moment later, everyone was running helter-skelter and towards the dais. GC ran. So did Arun. I, too, raced with them. As we ran behind the dais and reached the left side of the dais, GC saw Vazapadi Ramamurthi, the then Congress leader of Tamil Nadu. ``What happened sir,'' GC asked Ramamurthy. ``Our leader himself gone,'' a wailing Ramamurthy blurted out in Tamil. Oh my God! I was looking all over. Suddenly, we saw a mangled body on ground. Blood was all over. The give-away was the Lotto shoes. And, Rajiv Gandhi was the man. It took us a few minutes to gather ourselves. Bugs took charge and directed us to rush back to the car. We ran towards our car. We couldn't find Arun. So, we left him behind at the venue. We were, perhaps, the first ones to leave the venue and head back to file our copies. At Bug's house in K.K. Nagar, we, one by one, used the lone telephone at his residence to dictate our stories to our news desk in Calcutta. When I realized that the `kurta man’ was later identified as Rajiv Gandhi killer, my whole body shook. Till this day, I couldn't forget the election rally that was never held! Events of that evening are etched permanently in my memory. More than two decades had gone by in the meanwhile. That image, however, still disturbs me.             
--

Outsourcing is not going to go away anytime soon

http://www.thehindu.com/business/companies/article3436610.ece?homepage=true

Outsourcing Is Not Going To Go Away Anytime Soon

Dilip R. Vellodi founded Sutherland Global Services in 1986 with the vision and mission of providing integrated services in the customer life cycle, taking care of customer's back-office processing and front-office customer-facing cycle that would drive efficiency and productivity on behalf of his clients and deliver superior value and measurable results through a well-thought out execution process. After 26 summers, that objective remains unchanged. Today, Sutherland has emerged as a multi-national BPO company with a global ‘Right Shore' delivery model. With over 30,000 people, it is now operating out of 35 BPO facilities globally, including a strong offshore presence in India and the Philippines. Recently, it announced a $50 million investment into an 8,000-people facility that will come up in Carmona in the Philippines. In this e-mail interview with K. T. Jagannathan, Mr. Vellodi shares his perspective on the current global slowdown, its impact on the BPO industry and the outlook for the sector. Excerpts:

Is the heat caused in the wake of ensuing U.S. elections telling on the BPO Industry? Will the political heat impact offshore outsourcing jobs to countries especially such as India and the Philippines?

Presidential election happens once every four years. It is a recurring theme. However, companies are always looking to drive efficiency and productivity and this is especially true in turbulent times. While there may be some amount of rattling and noise made, outsourcing is not going to go away anytime soon. Sutherland growing from 0 to 13,000 people over the last seven years in the Philippines is an indication of the growth that there has been on offer in recent times globally on the BPO front. All the geographies we are operating have shown growth, including locally in the U.S. I doubt very much that this heat you are referring to will impact outsourcing and off shoring to countries such as India. In any case, we, as a company, are certainly not spending any time making contingency plans for such eventuality because we have seen it before and, I am sure, we will continue to see it in the future. It has not affected our business in the past and I do not believe that this is going to affect our business in the future either.

Reports suggest that a lot of BPO jobs have moved to the Philippines from cities such as Hyderabad and Bangalore? What is your take on that? You have a huge presence in the Philippines. How does it compare with India? Where will India be vis-à-vis that country three years down the line?

Given the changing global scenario, it is no more a question of comparing just India and the Philippines. A lot of the countries around the globe are eyeing BPO opportunities. The good news is that this multi-billion dollar global BPO industry is one of the few industries that are continuing to grow at a reasonable pace. While the overall pie of the BPO segment is growing, a lot of countries are now vying for this share, not just India and the Philippines. You have the Eastern Block, Middle East and North America competing as well. Where the business goes really depends on what the clients want by way of value and what they are willing to pay for it. If employable educated talent is available, then any given country should be able to effectively compete for the piece of the pie. Going forward, we will continue to invest in the strategy of building and leveraging a global service delivery model in servicing our global customers. Our current expansion in the Philippines, when complete, will result in a significant ramp up there. Our focus is on leveraging the strengths of each of the geographies that we are present in. From just a performance stand-point, we do not see any reason why business ought to be shifted from India to the Philippines. While the Philippines, as an offshore delivery base, is definitely growing for us at a fair clip, you will find that our mix between India and the Philippines is evenly balanced.

What is the current scenario globally on the off-shoring of BPO work? Are we seeing a global slowdown on the BPO front as well because of the economic situation in, general, and the situation in the U.S., in particular?

There is certainly a global economic slowdown and a postponement in decision making. Also, there is an incredible amount of pressure on our clients in various industries to improve cost structure and productivity. This is also the reason why outsourcing and off shoring will continue to grow. The fact that we have just announced a $50 million investment in an 8,000-people campus in the

Philippines is an indication that there are opportunities for growth in the BPO sector if you have the right strategy and if you offer value to your customer through differentiated offerings.

In the changed global context, protectionism seems to returning to rule the minds of the governments across the globe. How do you see this panning out in the coming days? How could this impact the BPO and IT business?

Protectionism is certainly raising its head in terms of political talk. But from a business perspective, there is not any fundamental shift or change that we are seeing. We do not expect political talk impacting our business. As far as the U.S. is concerned, I am quite confident that business will not be impacted and we will continue to see growth. Be rest assured, there certainly is no ‘doom and gloom' on the horizon as far as the BPO sector is concerned.

Is the word `BPO' being used as tool to whip national feelings?

We leave that to the politicians!

What is the prognosis for the BPO industry?

There is going to be continued growth in the BPO industry. We will see the ebbs and flow of this as economies around the globe shift as they go through their own respective business cycles. Overall, this space is expected to grow at a healthy pace. However, companies will have to adopt the right business model in order to achieve growth. It is for this reason that, over the last few years, we have created what we call the ‘RightSourcingTM' business model in the BPO industry expanding our presence to 10 countries globally and, in the process, establishing 35 operations centres in different geographies around the world, thereby leveraging the strengths of each geography we operate in and offering that to our customers globally.

Does cost arbitrage still hold key for pushing jobs into India?

To some extent, cost arbitrage does come into play. However, it is important to understand that gone are those days of outsourcing for cost arbitrage alone. Clearly, these days, clients and companies are looking to see true value being driven, measurable results, tech-driven innovation, improved efficiency and productivity from their outsourced partner. These are really the elements coming into play when we deliver our services to our clients across verticals.

What is your global growth strategy?

While the environment is a lot more challenging because of the global economy, it certainly has not gone off the cliff. But that is all the more reason for us to focus on innovation and help our clients transform their businesses while they outsource to us. That is really the key and that is the value we bring to the customers we work with. This transformational approach is the reason why over 80 per cent of our business is from the Fortune 1,000 companies and the value creation and our differentiators is what has allowed us to stay in a strong growth mode expanding to over 30,000 people globally. Given this transformational strategy, we are confident of continuing to see growth globally. We have just opened up a few new locations and our plan is to open up newer geographies in the future. Our RightSourcingTM global strategy will continue without abatement and we expect all our geographies to grow.

Slippery moves

http://www.thehindu.com/business/Economy/article3436609.ece

SLIPPERY MOVES

It isn't an overnight happening. It has been coming, and coming for a long time. When it actually arrives, the country finds itself sucked into the cross-currents of global politics of economics. All along, the Reserve Bank of India, which has sort of been pushed to announce a huge cut in Bank Rate, has been virtually pleading with the fiscal authorities to see the writing on the wall. The pleadings have largely gone unheeded. With the rupee sliding continuously against the dollar, the political leadership is beginning to sense the gravity of the situation.

Forex reserves

Just consider the country's foreign exchange reserves. The reserves have dwindled by $1.37 billion last week to $291.80 billion. The week-before that saw the reserves shaved off by a huge $2.19 billion. The depleting reserves are a cause for serious concern, especially since the Indian currency is losing consistently against the dollar. In a volatile scenario, the RBI just can't afford to remain in the sidelines and watch the rupee swing up and down. The apex bank did come out with some non-market intervention measures to prop up the rupee. Those, however, dissolve into insignificance given the grimness of the situation. According to a rough estimate, every time the RBI visits the market to stem the rupee slide, foreign exchange reserve evaporates by close to half-a-billion dollar! Also, international claims worth close to $137 billion on India are slated for repayment within the next 12 months, according to preliminary data released by the Bank of International Settlements. The Indian currency has indeed seen 20 per cent erosion in value against the dollar over the last one year or so. This could easily result in substantial erosion in the declining foreign exchange reserves.

Will the country be forced to revisit the day when it had to pledge gold abroad to avoid debt default? One need not take an alarmist position, however.

‘Existence issue'

Two contrasting numbers released by the RBI give some hope. While the FDI (foreign direct investment) saw a 34 per cent spike to $46.8 billion, the FII (foreign institutional investment) flow had dropped sharply by 43 per cent to $16.8 billion in 2011-12. The message is India still has attraction for overseas long-term money.

A series of scam-hit UPA (United Progressive Alliance) has all along been forced to focus on ‘existence issue' what with diverse partners pulling it in multiple directions.

Everything is based on coalition politics. Be it letting FDI in multi-brand retail or increasing foreign holding in the insurance space and allowing oil marketing firms to align the petrol, diesel and LPG prices to cost, New Delhi has only played to the galleries and not pursued a statesman-like approach.

If an individual is profligate in spending, he/she has to bear the consequence. If the State itself is so, who has to pay the price? Rather, who has to be held accountable? So much so, the country's fiscal deficit is estimated to be 5.1 per cent of GDP (gross domestic product) for 2012-13. With Government itself emerging as a big borrower for ‘money' in the marketplace to bridge the widening fiscal deficit, the option for enterprise-building or capacity addition is anything but costly. Costly funds are a sure roadblock to sew up the supply side of the economy.

The ‘indecisiveness' of the Centre on the oil price front is already costing the country heavily with the current account deficit ballooning to $19.6 billion in the third quarter of 2011-12 (as against $10.1 billion in Q3 of 2010-11). This works out to a steep 4.3 per cent of the GDP! Oil, gold and fertilizer form a major chunk of the imports.

‘Policy inactions'

As though ‘policy inactions' aren't enough, the Government has been making some totally avoidable noises, triggering negative perception among the overseas investing community. The Vodafone imbroglio, the retrospective amendments to tax laws and the like have all proved counter-productive to the India growth story.

The political leadership, it appears, has found an uncanny ability to convert a growth story into a ‘gloom story'. While Europe is reeling and America is struggling, India is still a ‘plus country'.

There is deceleration in growth, no doubt. But India is growing and still remains an attractive destination. What is needed is to create an environment that allows growth to perpetuate positively. We need a resurrection of Dr. Manmohan Singh-like personality of the early 90s to bring the economy back on fast lane

Bury the ego, let the entrepreneur flower

Bury The Ego, Let The Entrepreneur Flower

What is VC? Ask K. B. Chandrasekhar. For KB, as is popularly known in the VC circle, venture capital is all about ‘de-stabilising a status quo'. KB is behind many creations such as Jamcracker Inc, Exoduc Communications, Great Lakes Institute Management, e4e Inc and the list goes on. In a free-wheeling chat with this correspondent, KB lets his thought flow in a cascade. In the process, he reveals the candid venture capitalist in him.

For him, VC is not just about money. It is more about the ability to spot an entrepreneur and relate to his/her idea. “This is what makes up for a good venture capitalist,” he argues. This NRI (non-resident Indian), based out of Silicon Valley, is convinced that a VC “is entitled to lose his entire capital.” What sets a successful VC apart from the rest? Though seems funny, his response sets one thinking. “Did I create enough disruptions? Did I have enough failures?” Often times, a successful disruptive creation may not result in the innovator reaping big money, he says.

“The AOL founders have to die penniless,” he says. The opposite is the case with Steve, he points out. In a dynamic world, the disruption cycle could occur at a faster pace. That is the risk a VC has live to with, he argues.

“None imagined that a Microsoft could be challenged by a Google. Or, a Google could come under Facebook threat,” says he. Why are VCs active in knowledge space? Well, KB has a ready-made answer. “Knowledge industry is easy to get in. And, it is one of the most scalable businesses,” he argues. According to him, succession of constructive destruction happens at a faster pace in the knowledge field.

VC as a concept, according to him, has evolved only in the post-liberalisation era in India. “Today, people at basic level are less risk-averse. Failure is no more a taboo. People who are successful elsewhere are willing to leave their jobs and go on their own,” he says. He is of the view that “VC ecosystem is vibrant in India today.” What are the challenges facing a VC? Well, according to him, it is not the job of a VC to impose thoughts/ideas on an entrepreneur. “You (VC) have to bury your ego and allow the entrepreneur to flower,” he says. A failure teaches a VC lot more than a success. “While a PE (private equity player) looks at financial numbers, a VC looks at the idea of an entrepreneur for its potential to trigger disruption,” says he.

“That's why you find VCs camp in Bangalore and PEs zero in on Mumbai,” he puts it succinctly.

Ultimately, as he says, it is the “joy of betting on the success of the unknown” that drives a pure-bred venture capitalist.

A Different Stroke

http://www.thehindu.com/business/Economy/article3412445.ece

A different stroke

Two numbers, two tales. What do we make out of them? Is India the happening place? Or, is the country slipping rapidly? The answer is ‘yes' and ‘no' for both! Given the all-pervasive gloom in Europe and the U.S., India still is an attractive destination for many. The sheer weight of the population adds up to this love for India. After a hectic two-day visit to Chennai, where Renault has a production facility in alliance with Nissan, Carlos Tavares, Chief Operating Officer for Renault (who is also a member of the Renault Managing Committee), asserts “India is a very magnetic country.” According to him, “India is a place where things happen and where lot of value can be created.” So saying, Mr. Tavares returns to his base all “re-charged and with even more energy” as he claims. With markets turning bad in Europe, Renault-like companies are out on a de-risk mode and “going aggressively in emerging markets” as Mr. Tavares says. For Renault, RBI (Russia, Brazil and India) are the focus countries. Negative economic numbers, notwithstanding, Mr. Tavares reiterates, “we are bullish on India and here for long-term.”

FDI flow

Well, the views of Mr. Tavares read in tandem with the data released by the Reserve Bank of India on FDI (foreign direct investment) flow into India are silver linings in the sky. A 34 per cent spike in FDI flow to $46.8 billion in 2011-12 sort of reaffirms the ‘Love India' story. The upbeat sentiment on the FDI front is in sharp contrast to the mood of FIIs (foreign institutional investors). FII flow fell by a steep 43 per cent to $16.8 billion in 2011-12. FII flow into Indian global depository receipts (GDRs) and American depository receipts (ADRs), too, has fallen sharply. Given the volatile stock and financial market situation, hot money is not what the country should aim at. The focus should be on FDI. India may be slipping in critical numbers. It is yet shining relatively speaking. Given the global gloom, the challenge lies in converting the ‘relative shine factor' into a permanent advantage for the country. It is easier said than done, however.

Tough times call for tough actions. While the monetary authorities have been swift — be it in dousing the inflationary fire or in stemming the rupee slide — the fiscal bosses have, for a variety of reasons, not been able to move in line with them. Far from correcting a situation, the RBI actions, especially on the interest rate front, seem to have triggered unintended fall-outs on the economy if one were to go by the latest IIP (index of industrial production) numbers. Factory output for March 2012 contracted 3.5 per cent, a sharp fall from the 4.1 per cent growth registered in February and 9.4 per cent growth in March 2011. Predictably, panic buttons have been pressed into service. For the entire 2011-12, the IIP grew just 2.8 per cent as against a growth of 8.3 per cent in the preceding year. Capital goods, mining, manufacturing et al — the decline in production was palpable across the industry canvass.

Avoiding baby-step

With the benefit of hindsight, it could now be argued that the RBI had indeed assessed the ‘coming decline' and avoided the baby-step to lower the repo rate by a surprising 50 basis points. The RBI Governor had justified the big drop on the ground that monetary transmission took a longer time when rates were cut. That the RBI wasn't entirely whole-hearted in its action came out sharply when the monetary authorities kept insisting that there was little leeway for further cuts in the absence of tangible efforts on the fiscal side. The non-alignment of steps between the two managers — monetary and fiscal — is hurting the economy. Time and again in the past, the RBI has reminded the fiscal mandarins of the need for discipline but with little result. The poor IIP numbers could well see the voice of rate cut protagonists raise to a crescendo. That could put the RBI in a spot. With the rising sentiments in favour of a further rate cut, the apex bank is in danger of being portrayed as the villain in the ‘India slide story'. Pulled as it is from all fronts, a battered UPA government is long on a pause mode and quietly getting into the poll mood. Surely, it won't mind the RBI running around with the ‘villain' tag!