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Posts tagged “technology

A giant leap of success

India has come a far way of from just plain call centres. Half the world thinks of India being a call centre hub because of its cheap labour well go ahead and say that cause its true but theres more to it. Its similar in the past when called India as the land of snake charmers. Even two decades after the Indian technology miracle began it is hard not to be impressed by the scale of the achievement.


Indian IT has made shareholders and employees rich and now boosts the country’s balance of payments by $59 billion a year. Yet its impact goes far beyond the numbers. The big firms were among the first to win blue-chip American and European clients and to adopt blue-chip governance and accounting norms themselves. This won acclaim from foreign investors.

I hope this changes the perception of India being a third world country.

In the grand scheme of things  companies like Infosys, Wipro, TCS ’ performance is still strong, with sales growth and margins which are, by global standards, impressive. Although many Western multinationals initially slashed their budgets in response to the financial crisis, they quickly performed a U-turn and increased spending, as they redoubled their efforts to redesign and outsource key parts of their businesses. BUt even though there is strong link up between the Sales growth and Employee and Indian IT companies are desperate to escape their tag as “body shops” whose main competitive advantage is low labour costs. But i still think of it as an advantage.

This is straight from “The Economist”

The cost arbitrage available by employing Indian engineers rather than Western ones is still at least 50%. The strategic worry probably reflects three things, though. First, large Western rivals have come a long way in replicating some of the advantages of Indian firms. Wipro’s Mr Senapaty says that for many years they dismissed the Indian model as a temporary phenomenon boosted by the dotcom bubble and the Y2K scare: “It was only in 2003 and 2004 that they realised the Indian model would survive.” Now firms such as IBM and Accenture have vast employee bases in India too, and although they still struggle to grow as consistently or as profitably as Indian firms, they can compete better.

Wages for employees in India are rising at over 10% this year, and as the economy develops there will be more competition for talent from other industries. There is a need is to improve the supply, and the quality, of graduates cause the dark side is that only about a quarter of job applicants are typically considered employable – but i’m sure that would not take long.

But in time India’s IT firms will surely invent new products and markets. After all, they are past masters of taking something that only exists in their imaginations and turning it into a multi billion dollar reality.


RIM’s BlackBerry: Failure to Communicate

When apple unveiled its new tablet device I pad people welcomed it and a fantastic innovation, then even made it the gadget of the year, Steve Jobs in his words described the I pad “truly magical and revolutionary product,” something “and “unbelievably great.”

But when Jim Balsille the co CEO of Research in Motion introduced the Playbook his company’s answer to the I pad Balsille spoke something that not many understood. On the technical level the playbook seems better than the I pad, Morgan Stanley analyst Ehud Gelblum wrote that its technical features appear “to outperform competing device hardware on nearly every metric. But the problem lies in selling and people adapting it, if RIM cannot sell it then it would not really matter if the device is technically better than Apple’s I pad.

Competing with Apple gets tough and the reason it gets tough because Apple relies on innovation and comes out with a device that is not available in the market and this is exactly what people want, something that is not available. And with Apple fantastic marketing and awareness it is comparatively easy for them to get the customers adapted to their products.

RIM is also good at innovation and can be seen with products such as the Black Berry which is the No 1 smart phone in a lot of countries, but RIM has been slow to the marketing game. The first BlackBerry TV ad ran in 2008, nine years after the product was launched, when it was already racking up sales of more than $6 billion a year. (Sales hit almost $15 billion in the year that ended Feb. 27.)

They also lacked a full time Chief Financial officer for 2 years until their Chief accounting officer was appointed for the job. Most of the companies falter because they get locked into a system that has worked for them for quite a while when everything else outside is fast moving and changing. Just having a technological edge is not enough it is how you pass on the message or communicate the technology to your customers.