Sustainable Business Transformation

Management Consulting Services | Hemant Puthli Associates


  • Click on the logo to visit facebook business page

  • Follow me on Twitter

  • Advertisements
  • Hemant Puthli


    Founder & Principal (click on the picture to view profile)

  • Archived Posts

  • Subscribe

  • Subscribe to blog updates - enter your email address

    Join 441 other followers

  • Site Visits

    • 30,743 since 14 Aug 2009


Archive for the ‘Operations’ Category

Change Management Q&A

Posted by Hemant Puthli on November 13, 2009

Over the last month or so, I answered a few questions on the LinkedIn network on the subject of ‘Change Management’. The questions and my answers are reproduced below:

What is successful change management?

To evaluate the end, we must go to the beginning.

Good practices in change management require that the criteria for success be established before kicking-off the change program. Things change, of course, and when they do, those criteria need to be reviewed and ‘tweaked’ if (and as) necessary. If this is done diligently, the answer to your question will be self-evident at the end of the change program.

And as to who should spell out the criteria – well, it has to be those who are initiating and sponsoring the change (weighted towards the latter, in case they are different entities / individuals).

This may not always be as easy as it sounds, and the services of a skilled (external?) ‘change agent’ would be required to extract the success criteria out of the minds of those driving the change.

Please share what you believe to be the three most important attributes of a good change management strategy.

A good change management strategy is characterized by:
(1) Clarity of vision and strength of purpose
(2) Inclusion of all relevant stakeholders; alignment of goals; communication
(3) Effectiveness of mechanisms that deal with planning and governance

There could be others, but these would be the top 3 most critical ones, in my opinion.

Today’s challenges for Change Management?

There could be several triggers to the need for change, such as: regulatory imperatives, stakeholder demands, environmental / competitive forces, new leadership / outlook, etc. Each brings with it its own mix of issues and opportunities, but regardless of that, in each case, the organization would be better off building a consensus for change (or at least, a business case) and anticipating and planning for the change well in advance of commencing the journey.

That said, the most common dimensions of impact in any given change programme include:
1. Stakeholders – customers, suppliers / partners, employees
2. Operations – processes, systems, technology / infrastructure

Most challenges could be found in these two areas. People generally do not like change and carrying them along is perhaps the biggest challenge. I don’t think the current economic climate has significantly changed this fact. On the contrary, it has probably magnified the criticality of inclusiveness and communication with key stakeholders.

P.S.

Two things come to mind, which are perhaps unique to our current ‘zeitgeist’ and they are: (1) cultural diversity and (2) economic (job) uncertainty. These two factors make it all the more difficult to bring people on-board toward a change agenda.

The body of knowledge on Change Management is quite vast, but in many ways, these three questions are key to “getting it right”: What is success? What is a good strategy? What are the big challenges? I hope that my answers, though brief, offer a helpful perspective.

Advertisements

Posted in Governance, Operations, Organization, Politics, Strategy | Tagged: , , | 1 Comment »

Off-shoring Destinations: LatAm gets Muy Caliente!

Posted by Hemant Puthli on November 8, 2009

Research reports released in the recent past by two top-tier global consulting firms — one by A T Kearney prepared on behalf of ‘Invest Chile / CORFO’ (the Chilean Economic Development Agency), and the other by KPMG , indicate that Latin America is rapidly becoming a preferred region for outsourcing / off-shoring.

According to both reports, the main factors that are driving this trend are:

  • Geographical proximity of Central and South American countries to North America (impact: reduced travel time for client and service provider personnel)
  • Compatible time-zones (impact: overlapping business hours leading to less disruptions of daily routine for client and service provider personnel)
  • Common languages and cultural affinity with North America (impact: promotes quicker and stronger team cohesion between client teams and service provider teams, and smoother communications on an on-going basis)
  • Lower attrition rates (impact: reduced ‘leakage’ of knowledge and expertise, resulting in better cost / benefit ratio for investments in knowledge transfer and training, and better response time)
  • Improved telecommunications and other technology infrastructure (impact: reduced infrastructure risks, resulting in greater business continuity)
  • Favorable business environment including political stability and tax incentives in several countries (such as the ones mentioned below) (impact: financial attractiveness, reduced geo-political risk)

Top Locations in Latin America (source: A T Kearney)

As we had noted in an earlier post in this blog, these are more or less the same factors that underpin the weaknesses of destinations like India (as also China and other Asian countries), and the more aggressive players in the Central and South American region are clearly positioning their advantages in these areas as complementary to India and China. However, there continue to be concerns in a few key areas — particularly with regard to team size and scalability. In order to overcome this drawback, several countries in the region are actively working towards improving the quality and quantity of their resource pools, by focusing on education and training in technical as well as soft skills. Clearly, the more aggressive players have recognized the criticality of growing a scalable, highly skilled workforce that is adept at innovation. Other challenges include the need to change client perceptions about countries in the region as being politically unstable and their main cities as unsafe or even dangerous. In that respect, it is useful to note that recent terrorists attacks in India and the authoritarian regime in China have rendered the latter destinations less attractive.

Service providers with a global vision will benefit significantly by investing in expansion in key Latin America destinations. As regards Indian ITO and BPO shops, the future will reward those who think beyond their domestic boundaries, venture into the global arena, embrace new cultures, learn to leverage the advantages of these destinations and learn to share their knowledge and expertise. Conversely, the ones who are less open and flexible, or who are too strongly rooted in the Indian geography and/or ethos, will be relegated to the position of helpless bystanders, as they watch their market share dwindle and see their survival threatened as the domestic competition for a diminishing slice of the pie becomes even more fierce.

Posted in Operations, Strategy | Tagged: , , , , , , | 4 Comments »

Towards Customer-centric Design

Posted by Hemant Puthli on October 11, 2009

When it comes to customer interaction, the Indian business culture – specifically in the B2C space – seems to be remarkably insensitive to spam, unsolicited messaging and over-communication. Perhaps this is due to the absence of strong privacy laws, or perhaps it is the culture that explains why such laws are absent, to begin with. A few years ago, I had blogged about telemarketing spam and though things have somewhat improved (thanks to the TRAI-mandated ‘DND’ discipline) since then, the problem in essence has not gone away, but merely taken a slightly different form.

In the case of almost all of the service providers that I am a customer of (particularly those in the financial services, media/ entertainment and telecom industries — the relatively more buoyant sectors of the economy), I find that giving them your mobile number and/ or email address is like inviting a boorish bore to your house — you wish the incessant and at times tasteless chatter would stop and that you could focus on just that fraction of the conversation that is meaningful to you. These service providers take contact information from customers based on a legitimate reason: to alert customers about important information pertaining to their account, which is why customers like me part with such information in the first place. But they then use that as a licence to pump all sorts of completely irrelevant information (mostly cross-selling and up-selling messages) through those channels. Quite often such messages are badly timed as well, which is even more annoying. In the case of a specific service provider, I regularly receive text alerts on my mobile at odd hours of the morning or night. Then there is the problem of over-communication. In the case of one specific bank, where I have registered for an auto-pay bill payment facility, I get 3 text messages and 3 emails for every bill presented and paid — one text message and one email each: when the bill is presented, when the due date is approaching, and after the auto-pay transaction has been executed. I need only one post-facto email and no text messages, but there is no way on earth I can get them to change this. I do need that one message and my preferred medium is email, but I could do without the other five. Not only are redundant alerts annoying, but they’re also a waste of resources.

Several of these Indian service providers represent the local operations of reputed global brands and I am quite sure their operations in other markets are far more rigourously controlled in terms of privacy norms. So why don’t they do that here? I can’t believe they are new to permission marketing/ opt-in marketing and other techniques. It is really not difficult to set-up a web-page at their site, where a customer can check relevant boxes that specify what kind of messages they would like to receive, through what medium and at what time of the day and/ or day of the week. Several web-based free services do it. Social networking sites like facebook, for instance, allow you to spell out with pin-point precision, your choices in terms of why and how you would like to be contacted, if at all you do. If these service providers really mean to be as customer-centric as they claim to be, and if they really care about not inconveniencing their customers, they should make the right moves in this regard.

To my mind, this is an excellent opportunity for a brand to demonstrate maturity and leadership, by respecting customer privacy even in markets where the regulatory framework does not require them to do so. Sadly, I am not sure any of them sees it that way.

Posted in Operations, Strategy | Tagged: , , , , | 1 Comment »

The Art of Giving

Posted by Hemant Puthli on September 25, 2009

Further to the last post (below), on the subject of Charity, here’s an interesting talk by Jacqueline Novogratz, the founder of Acumen Fund.

Clearly, it’s time to change the way we give!

Posted in Economics, Operations, Society, Strategy | Tagged: , , , , , , | Leave a Comment »

Staying On Top: The Challenge to India’s Leadership in Off-shoring

Posted by Hemant Puthli on August 28, 2009

In a recent (August 2009) article in the McKinsey Quarterly (accessible by clicking here, and then clicking on the shortened URL link mentioned in the archived tweet), Noshir Kaka et al. suggest that Innovation will be a critical success factor for India to maintain a leadership position in the globalized business / technology services industry. Here’s an extract from that article:

Indian business and technology services companies needn’t stand by passively and watch their global market share decline. Innovation will be the key to maintaining and even expanding their market share. Business models that continue to focus on low labor costs won’t suffice.

While it is true that “business models that continue to focus on low labor costs won’t suffice”, in August 2009 this cannot be a epiphanic revelation! This is yesterday’s news, not thought leadership. Most companies foresaw this many years ago, and (as the McKinsey article suggests) turned to Innovation (among other strategies), hoping to leverage it to create a sustainable competitive advantage for India as a destination. All Indian ITO/ITeS industry majors have been chanting the Innovation mantra since then. (Show me one Indian company of some standing in the global business / technology services space that does not lay claim to ‘Innovation’ as its key differentiator at its web-site or in its brochures.) Several companies have been relentlessly trying to institutionalize Innovation in everything they do, in a bid to maintain their market share in the face of competition — from within the Indian market as well as from companies based in the other BRIC countries (and their corresponding regional neighbours in Latin America, Eastern Europe, Asia / South Asia / South-East Asia) and also emerging destinations such as Egypt (and, potentially, other West Asian / African countries). However, the very act of institutionalization makes it a replicable commodity, just like any other ‘best practice’. Which means others can do it too.

My comment to the article (not visible at the site at the time of writing this post) is reproduced here below, and what follows subsequently is an elaboration of the rationale behind my argument and an elucidation of my point of view on the subject.

India’s competitive advantage (beyond wage arbitrage) has always been scale and process maturity. Other destinations simply cannot match the ability of Indian companies to offer large pools of talent to dip into (in terms of breadth as well as depth), or to ramp-up their teams quickly. Besides, a lot of non-Indian companies are still struggling with the challenges of managing process quality in very large projects. However this is not a sustainable competitive advantage. China has the potential to match and surpass India’s strengths in terms of both scale as well as process maturity, given the size of their literate population and their culture of rigour and discipline (which is being applied even now, for example, to learning English as well as learning large scale process management). But other than China, there aren’t too many countries that represent a real threat to India. Innovation is a buzz word, in my opinion, and though this may sound counter-intuitive, it is a fairly commoditizable and replicable attribute. It does not represent a sustainable competitive advantage. Talent pools from the countries / cultures that presently constitute off-shore destinations (or aspire to join the club) are equally good or bad at learning, practising and delivering on the promise of innovation. There is nothing unique about Indian ingenuity that makes Indian talent intrinsically and significantly more innovative than the average knowledge worker in, say, China or Egypt or Eastern Europe or even Latin America!

Clients based in North America and Western Europe (the predominant ‘buyer’ markets) have been tapping into India as a destination for well over a decade, and by now have a good understanding of the issues and opportunities that India represents. They know where the trade-offs are: while on the plus side, as I have argued, India offers a wider range of skills, better scale and better process quality, the down-side comes primarily in the form of higher attrition, greater geographical distances and time-zone differences, cultural incompatibility and to some extent lack of infrastructural robustness. Attrition can be a major problem for clients who have invested time, cost and energy in transferring knowledge. Secondly, while it is true that India enjoys the advantage of a large educated and English-speaking resource base, one must also remember that cultural compatibility is not just about being able to speak a common language (which itself is debatable in the first place, since a lot of the knowledge workers who originate from smaller towns in India cannot really boast of fluency in English, not to mention American colloquialism). Thirdly, while time-zone differences of up to 12 hours do offer the advantage of having someone, somewhere, working on a project 24×7, they do not solve the problem of logistics (when professionals on either shore need to travel great distances to the other shore) and the problem of disrupted daily routine (when professionals on either shore need to be on conference calls at odd hours in their work day).

Comparatively, Central and South American destinations are closer, by way of both time-zone compatibility (in terms of virtual meetings / conferences) as well as geographical proximity (in terms of travel) for North American clients. The same goes for Eastern Europe in the case of European clients. Also, clients find better cultural compatibility in dealing with teams in those destinations, and business communication between client and provider teams is relatively easier and smoother. Language barriers are not significantly higher than when dealing with India, and in many cases may even be lower. Also, attrition is comparatively much lower in most of these destinations. The only disadvantages these destinations have are: skill mix, scalability (especially in terms of ramp-up time) and process maturity. And that is where India has been scoring. Of all competing destinations, China is the only one that has the capability (not to mention the will!) of outstripping India on these fronts. Through concerted efforts in strengthening infrastructure (power, telecoms, etc.), in fighting attrition, in broadening and deepening the pool of trained and qualified professionals, and in imparting cross-cultural and soft-skills training to its resources (a la finishing schools), India can hope to keep the No. 2 slot if / when China overtakes India (may just be a matter of time). Perhaps this is a more pragmatic goal for India as an off-shoring destination.

That said, the opportunity for Indian companies to maintain their leadership position lies not in trying to fight the up-hill battle of keeping India as the most preferred destination. In fact, it lies in not confining themselves to India as a destination. Again, this is not an epiphany — in fact it is not even news. Most of the top-tier India-based service providers (including those founded by entrepreneurs of Indian origin) have already started the process of building (or in some cases, consolidating) ‘near-shore’ hubs in Central and South America, Eastern Europe and other regions. A few have done this through organic growth, but most have done so through acquisitions of stake in local players, to whom Indian companies offer stability, scale, leadership in process maturity and access to other markets, in return for a better presence in the local / regional market, a ready local client base, and the ability to provide a multi-locational offering to their global clients. Leading Indian companies have already figured out that globalization is no longer about staying in India and offering ITO / BPO type of services to the world, as clients have increasingly started demanding lower attrition rates and flexibility in terms of location and time-zones, over and above range of skills, scalability and process maturity.

India as a destination will lose its leadership position in a few years — at the very least, the gap between India and other destinations will start closing rapidly (it already is) as they ramp-up and start competing. Innovativeness is not a special gift that is unique to India-based talent pools and believing that it is so can at best be termed as misplaced patriotism (at worst, it is a kind of jingoistic denial of reality) on the part of Indians. Innovation is a great value proposition and I am not suggesting that it should be abandoned altogether (especially because others will start offering it too!) The smart thing to do, for service providers of Indian origin, is to focus on developing a global delivery footprint (not just sales offices) and the ability to provide the right mix of capability, capacity (i.e., scale), team stability and cultural compatibility, and process excellence, at locations preferred by the client — on-site/ off-site/ near-shore/ off-shore. And as the adoption of globalization shifts to the mid-tier client base, focus on forging strong partnerships with clients to achieve the distinction of becoming an extended team of the client organization. Cultural compatibility and responsiveness to changing client needs are key. Innovation will just be a hygiene factor.

Posted in Operations, Organization, Strategy | Tagged: , , , , , , , | Leave a Comment »