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Out of the top 10 countries with the highest number of internet users, only UK and Brazil seem to have stayed out of the top 10 phishing sites hosting countries. Any ideas why ? Phishing seem to be catching on in India according to Bruce Einhorn. It is no surprise that this has coincided with the retail banking boom in India.
Consumer Internet Life
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I have written about "execution excellence" before and the same remains a pillar for most if not all services companies. But with outsourcing and delivery models maturing I feel the marginal utility of better execution is decreasing. Here's why :
Improvements are usually shared: Most clients engaging in long term outsourcing relationships expect the gains from better execution (quality, productivity etc) to be shared with them. In other words, the extra value added is not fully captured by the vendor. I can understand aspects like the learning curve where the client has a right to demand a share of the pie, but seperating such gains from gains from genuine innovation is not easy. In a commoditizing business where the customer has plenty of market power, the vendor will always get squeezed.
Processes by themselves mean nothing: I was once giving an informal, on the sidelines pitch on CMMI to a product company VP and he cut me off saying " One can easily follow all the processes you are mentioning and get to the wrong place faster". He went on to add that the best way was to focus on just enough processes to get the job done. I can't agree more. Execution excellence is fine, but when it becomes synonymous with processes and when processes are viewed as the royal route to excellence..Duh!
Doing the right things versus doing things right: Ram Charan in "Execution: The discipline of getting things done" defines execution as "The discipline of getting things done". The best strategy is useless without execution. Having said that, if services companies are to move up the value chain, they need to not just think of execution but ask themselves: “What should my client do next ? " (the doing the right things part) and then follow that up with "How best can I help the client do the things he should be doing ?" (the doing things right part). Not many vendors do this currently and not too many clients expect this from vendors.
Looming competition: The China's and the Vietnam's of the world have more discipline, natural process orientation and better cost structures (lower wages and infrastructural benefits) than us. It won't take them long to learn the ropes of execution.
It is clear that execution excellence will remain at the centre, but the next generation of services companies are going to have to think and act beyond execution.
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Phil Wainewright writes about how network effects in the Web 2.0 era can compound the benefits of outsourcing. Taking the example of Employease he argues that in a world of loosely connected services, systems and processes cannot afford to stay monolithic. Phil seems to use the term "network effects" in a slightly loose way and what he probably intends to mean is that the aggregate value that a loosely coupled group of services is higher than that of a tightly coupled monolithic system. Phil has made a valid point but I do not totally agree with him on the "network effects" argument. I think the key here is synergy rather than network effects. It is the inherent synergy in the Employease model that causes an ADP to collaborate with an AON and when you have two market leading companies bringing in a couple of thousand clients more partners want to jump in and the network effect takes hold. If the synergy were not there, people would not join the network and the network effect would not manifest. Web 2.0 technologies enable resources on the network to collaborate and participate better thereby helping unlock latent synergy. What do you think ?
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Consumer Internet Web2.0
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Russian vendors seem to have a neat strategy when it comes to outsourcing as this Business Week article seems to indicate. According to this Russoft (Russian equivalent of NASSCOM) white paper:
The Soviet Union left behind a world class system of science education….Indian programmers do not have such wide experience with different technologies. Their experience is typically limited to working in large software development factories. I can agree with this.
Here is the gist of the Russian mantra:
- Avoid direct competition with India and China by positioning as a high end provider. A good move considering that they can never compete on cost or scale.
- Focus on computer science as a core competence rather than process excellence or software engineering.
If the Russians manage to get their act together, all the Indian companies that try to outsource product development might be headed for trouble. The product outsourcing market is probably less price sensitive especially at the high end and surely puts a premium on computer science skills over software engineering.
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Business Week brings up PC recycling as a way to bridge the digital divide. We also have more radical approaches like the Simputer innovation. Both approaches have their pros and cons like anything else, but I tend to favor reuse and "value engineered" innovation over radical innovation when it comes to bridging the digital divide. Here's why:
The stupendous importance of the platform: Making a radical innovation like a new platform succeed in the face of an existing, proven and mature option is a staggering task. Just ask any company that Microsoft has vanquished to know why.
Ecosystem versus devices: The question really is not access to devices but access to the ecosystem where there is information.The idea should be to find the path of least resistance to get the underprivilegded into the information rich ecosystem. An outdated PC with a local language version of Windows running just IE running would provide a much easier entry point than new devices or software.
Leveragability of the learning curve: Why bridge one divide to create another ? Why make a 'digital illiterate' learn a new device only to find that he is handicapped when it comes to what the rest of the world is doing ?
The human factor: Which CEO would not want to get rid of "junk" PC's for a noble cause ? Knowing that your junk can irrevocably and surely change someone's like for the better is a strong incentive. Meanwhile try selling a new, untested and radical innovation to the same CEO he will ask for a business plan.
Think local when it comes into innovation: Innovation should be value engineered with the objective of reducing the cost of entry by leveraging local strengths. The wind up laptop is a good example. I will say take a PC and find a way to use a gobar gas plant to run it before taking it to an Indian village. The example is extreme but the message is clear, think local when it comes to innovation.
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Disclaimer : This blog site is published by and reflects the personal views of Prakash Muralidharan,in his individual capacity. It does not necessarily represent the views of any of his employers, past or present, and is not sponsored or endorsed by any of them. No representation is made about the accuracy of the information contained in this blog.
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