Indian exports to reach $150 Bn this fiscal

India's exports will touch $150 billion in fiscal 2007-08 against the target of $160 billion due to a sluggish U.S. economy and the rising rupee, said a senior official. "Exports of $150 billion are certain this year. If there is a surge, they could even go up to $155 billion," Commerce Secretary G.K. Pillai told reporters on the sidelines of an event organised by the Confederation of Indian Industry (CII) here Wednesday.

Pillai also said that in the coming fiscal (2008-09), an export target of $200 billion could be achieved. He indicated that certain promotional schemes targeted at exporters might be done away with due to their minimal benefit. He invited suggestions from the industry in this regard."Our trade policy is complicated.

This discourages our exporters. The focus should shift from getting a number of approvals from various government agencies to self-certification. The majority should not suffer for misdeeds of a handful of unscrupulous exporters," he said."We should have only meaningful incentives to promote the competitiveness of our exporters."

Pillai urged India Inc to provide its inputs and feedback for the Krishnamurty Committee, which is expected to submit its report to Prime Minister Manmohan Singh by end of this month. The prime minister set up the Krishnamurty Committee to evaluate and examine methods of providing relief to the rupee-hit exporters, especially in sectors such as textiles, leather and handicraft, which have been witnessing shrinking profits and job losses. The ministry is likely to submit its first draft of the trade policy with the Department of Revenue within the next couple of weeks, Pillai said.

Source - Silicon India

India's Manufacturing exports to touch $ 300 b by 2015: study

Indian manufacturing export has the potential to touch $ 300 billion by 2015, growing at an annual rate of 17 per cent as against the historic growth of 11 per cent, states a study released by the Confederation of Indian Industry (CII) and McKinsey on manufacturing.

“The global trend to manufacture and source products in low-cost countries (LCCs) is likely to gather steam over the next 10 years, particularly in the skill-intensive industries, where India has a significant competitive advantage,” states the study.

The study asserts that if India could take advantage of this particular trend, it would lead to the creation of 25-30 million jobs in manufacturing by 2015 and two to three times this number in allied sectors like construction, education and entertainment due to the multiplier effect.

The aspiration, though ambitious, is attainable. The CII -McKinsey study states that India has several advantages in skill-intensive industries, such as auto components and pharmaceuticals, where the next set of offshoring opportunities will arise. Apart from low wages, these advantages include engineering skills (process, product and capital engineering), established raw material bases, a mature supply base and a growing domestic demand.

The study has also found that out of the $ 300 billion of total manufacturing exports, $ 70 billion to $ 90 billion could be captured from just four sectors — apparel, auto components, specialty chemicals and electrical and electronic products.

In apparel, global trade could grow from $ 200 billion in 2002-03 to over $ 300 billion by 2015. Of this, India could grow its exports from $ 6 billion to $ 25 to $ 30 billion by 2015. It could thus become the second largest LCC exporter with an 8 to 10 per cent share of world trade, adds the CII-McKinsey study.

The study also points out that in auto components, LCC offshoring is poised to take off and could reach $ 375 billion by 2015. “India should aspire to capture $ 20 to $ 25 billion of this by 2015 as compared to exports of just over $ 1 billion in 2003,” states the study.

In electrical and electronic products, world trade has already exceeded $ 1 trillion and countries such as China, Taiwan, Malaysia and Thailand all have a significant lead. Offshoring business from developing countries is expected to increase from $ 345 billion to at least $ 600 billion by 2015. “Of this, India should aspire to capture $ 15 to $ 18 billion, as compared to exports of $ 1.2 billion in 2002,” states the study.

India’s chemical, engineering and cost-innovation skills could also make the country one of the top two LCC exporters with a potential $ 12 to $ 15 billion in exports, the study finds.
The study, however, points out that achieving this acceleration in manufacturing exports would require that Indian players adopt a global mindset, carefully select product segments and rapidly develop India as one of the top three outsourcing hubs.

It adds that the government should also implement key reforms in taxation, infrastructure, clusters (SEZs), labour and skill development to help unlock India’s manufacturing potential.

Source - The Tribune

Creating A Virtual Contact Center

"Enabling agents as diverse as your customer base to respond seamlessly"

You may have experienced the following crisis situation or one similar to it.

The crisis: In the middle of your most important campaign of the year, you’re hit with the largest snowstorm in a decade. Not only are the roads impassible for most of your staff, you have lost power in your building several times today. And to your customers this simply means your contact center is unreachable. What do you do?

You can substitute your own critical program and trouble spot as you please for this scenario — as long as it requires immediate contact center service. When you’re faced with a situation like this, what happens if these communication channels are interrupted?

The rescue: An increasing number of enterprises are using Software as a Service (SaaS) to create “virtual” or “hosted” contact centers. For the uninitiated, Software as a Service is a way of using subscription-based software to allow contact center agents to be located away from a traditional service center. Through SaaS, agents may be in multiple time zones, using multiple communicational lines. They may even speak multiple languages when responding to customers.

For enterprises that utilize SaaS, the virtual contact center allows agents to work from home, accessing a common set of tools, appearing joined and available via “regular” support channels. Having this capability pays big dividends — here’s how:

• High-value transactions receive high, skill-based priority. When a high-value customer needs support, every transfer counts. By linking agents in the virtual call center based on skills, rather than location or pool-priority, the customer may receive an improved level of support. These agents can be part of the larger contact-center pool or an escalated group of experts.
• Home-based agents may be more productive. Agents who work from home often have more education and are more loyal than those in brick-and-mortar contact centers. They don’t have commuting problems to deal with and may be more flexible regarding extended or off-hour responses.
• Virtual contact centers can be easier to reach in a disaster. Because of their decentralized nature, when disaster strikes, many virtual contact centers remain open and operational. They are more reachable because the agents are not in a single location. During disasters, the contact centers can also share critical information with employees calling to find out about facilities, coworkers, even loved ones.

Good for the your company and your customer

According to industry research from IDC, the number of U.S. at-home agents will triple by 2010. This way of working is growing in popularity for many good reasons. The first is cost. For the company implementing a virtual contact center, or adding agents to an existing operation, the cost per agent can be much lower because no additional facilities are required — The company does not have to provision or maintain more power, air conditioning, furniture, communications equipment or computers for every new agent. Adding agents in an existing virtual center doesn’t require additional IT infrastructure or labor.

From the customers’ perspective, they can’t tell that the center is virtual. Customers use the same 800 number or series of numbers. They don’t know if agents are side by side or all over the country. Customers are still routed with an automatic call distribution (ACD) queue and skills-based routing to put the right agent on the right call.

The beauty of the virtual or hosted service is that the “back end” is transparent to the customer. And for the agent they only need a web browser and Internet access to participate in the virtual center.

Creating a virtual contact center

The virtual call center model allows a company to rely on a contact center service provider to set up an account, which is quite simple. Cost is often based on the number of agents and services provided. The provider maintains the infrastructure and contact center software as part of the service to your company.

Contact center software updates, patches and bug fixes are also handled by the service provider, making the contact center even easier to create and maintain. By using different hosted services, you can boost your company’s existing contact center performance and capabilities with minimal disruption and investment. And as your company and support needs expand, it’s easy to expand your virtual contact center, using the hosted services and virtual agents.

Managing your virtual team

Companies concerned about allowing agents to work from home have excellent management capabilities with the virtual or hosted center. Since on-site supervision is no longer a part of the management perspective, other tools are needed to monitor and manage virtual contact center activity. Call monitoring software reports number of calls per agent, length of call, even software access times. These reporting tools are often accessible from a contact center manager’s desk, which may also be off-site.

Flexibility and expandability are significant advantages with the hosted model. When your company expands or becomes geographically diverse, the contact center can grow or move to support it, without additional infrastructure. Adding another shift or time-zone to your company’s operation is also easier to support with virtual agents who are already awake and accustomed to working in the new time-zone. Similarly, when you move into new regions requiring multilingual support, you can depend on agents native to the region — who already speak the required languages fluently.

Customer support on a limited budget

For small companies, or those with limited budgets, adding virtual agents enables them to provide a high level of support without devoting the infrastructure investment and facility cost of an on-site contact center. Companies often start with a small, centralized installation, allowing agents to work from home as they become comfortable with the hosted applications. This method allows a centralized presence initially or migrating to a virtual center, or a combination of the two. Often the addition of a second or third shift marks the migration to a virtual center, allowing the additional business to be supported by virtual agents at significant cost savings.

Your company may also benefit from regional hub-zone telecommuting incentives, by eliminating commuters and pollution from the area.

Virtual solutions — concrete benefits

Companies that create a virtual contact center experience a plethora of benefits. When you begin to add virtual agents to your business, you improve productivity and facilitate better customer responses through:

• Minimal capital start-up costs
• Low infrastructure and information technology costs
• Flexible and easily expandable workforce
• Readily available multishift and multilanguage support
• Lower agent turnover — loyal virtual agents working from home
• Smaller resource utilization footprints — lower cost per agent
• Reduced outages due to emergencies or disasters

The keys to success include finding a provider you can work with that offers the mix of services, reporting tools and supportability you want. Start with your existing program and add virtual extensions. As you expand, you’ll have the experience and relationships in place to better support your customer base as it changes. By making your move into a virtual contact center with the support of a knowledgeable vendor, you’ll ensure success for you and your customers.

By Randy Saunders at Cincom Systems

Indian firms still big in IT services, says survey

Indian firms came first in four out of 10 information technology service categories in a global survey that selects the 100 best IT services providers. US-headquartered IT firms topped in four other categories and one firm each from Mexico and China took the other prizes in the 4th Cybermedia Global IT Services Survey.

Overall, the survey affirmed India’s standing as a major outsourcing centre. India also led the way as the global delivery centre for IT service companies, with many non-Indian firms clearly favouring India. However, the survey also revealed that the rising rupee was the number one concern for many such firms.

Tata Consultancy Services was rated the best performing IT services company. HCL Technologies was rated the best performing infrastructure service provider. Genpact was rated the best performing BPO provider and WNS Global Services was the rated the best performing FAO provider.

The US firms were EDS, Sitel, EPAM Systems and Computer Sciences Corporation – all of whom have a footprint in India as well. Mexican and Chinese firms won in categories that were region specific. India is rated the number one hub for global delivery of IT services. Fifty-seven per cent of IT service employees working in delivery centres, says the survey, were located in India. Only 18 per cent were based in the US. This reflects how many non-Indian firms keep their delivery centres in India.

In the listing of the 100 best IT services firms, Indian companies trailed those in the US but were well ahead of any other country. Forty-three US-headquartered firms dominated the 100 best firms. There were 29 firms in the list. There were four Chinese companies, four from Malaysia, three from Russia and three from Brazil. There a scattering of other firms in countries ranging from Argentina to the Ukraine. The survey said these “were a gentle reminder” of the presence of other countries that could become outsourcing rivals to India.

Two years ago the same survey listed 36 Indian firms and 32 US firms in the top 100. This shift to US-headquartered firms may reflect both the fact many Indian firms are being bought up by US firms and a consolidation in the upper end of the Indian IT services industry.

However, 47 per cent of the respondents, including many from India, said a falling dollar and rising local currency was their “most critical business concern.” The survey says “Indian service providers who derive between two-thirds to three-fourths of their revenues from the US are back to the drawing board to consider non-US avenues.” Firms in the Philippines and Canada also listed currency problems as their main business headache.

Source - Hindustan Times

IT cos go innovative to beat Re blues

The upward spiral coupled with the volatile movement of the Indian currency against the US dollar has driven IT services majors to look at multiple options to minimise its shock.

In the last 15 months, the rupee has appreciated in the region of 14 to 15 per cent and every 1 per cent rise has a margin impact of 40-50 basis points for IT companies. Indian IT giants have started taking cover in fresh clauses in contracts, price re-negotiations and extended forex covers to beat the rupee appreciation and volatility risk.

For instance, Wipro has now started forward covers extending to the entire length of the project. Satyam BPO has had a couple of cases where they have gone back to the table for rupee-triggered price renegotiation. The most favourable option for the Indian companies has been re-pricing and many have managed such raises during contract renewals.

Both Wipro and Infosys have managed price increases in the range of 3 to 5 per cent from both existing and new customers. Offshore advisory firm Tholons CEO Avinash Vashistha says, “there have been three key drivers for the IT services vendors getting a price increase: Exchange rate fluctuation, demonstration of higher productivity and the competitive scenario for buyers of IT services.”

However, analysts are quick to add that, in the long term, rupee is something Indian companies will have to deal with on their own. Also, wild currency fluctuation is not something that these companies can easily pass on to their clients completely. While they may hope that client companies would meet them mid-way in raising billing rates, IT industry trackers say that companies will have to learn to deal with such volatility.

As part of risk mitigation, what Wipro will do in the future is that if a contract lasts for four years and the current rupee rate is Rs 39, it will cover the currency at that level for the entire tenure of the project so that the margins are protected.

Wipro is also looking at non-dollar denominated contracts. While US business still accounts for 62 per cent of the business, it is looking at the possibility of dealing with local currencies such as euro with respect to European countries. Most non-US based companies traditionally transact in dollars. “We are talking to customers to move into local currency in which they are. And, we are making decent success with new customers,” Wipro CFO Suresh Senapaty says. Satyam BPO has attempted some re-pricing with its customers and also new outcome-linked contract structures.

For instance, it has included in the contract clause that any significant deviation in the currency appreciation, say above 5 per cent would bring both parties back to the table for re-pricing. Satyam BPO chief Venkatesh Roddam says the company is looking at outcome-linked, guaranteed revenue structures. This means that the company will commit to guaranteed savings or productivity increase for the client in a given period of time and the pricing would be linked to the outcome. Infosys CFO V Balakrishnan says new structures based on risk-based pricing and productivity-linked contracts will emerge. Though for now, the dominant pricing structure is time and material or fixed price.

Source - Times of India

Americans prefer Indian products over Chinese: Fortune

A majority of Americans are not averse to purchasing made-in-India products, but opposite is the case for those made in China, according to a new survey conducted by renowned US-based business magazine Fortune.

In the wake of some of the American companies, including toymaker Mattel recalling products they sourced from China due to high lead content, nearly three in five (57 per cent) of the US citizens surveyed by Fortune said they were "less likely to buy a product if it is made in China".

However, as much as 52 per cent of the survey respondents said such an incident would not affect their purchasing decision if the product is made in India.

In the survey, only 35 per cent of Americans said they were "less likely" to purchase a product manufactured in India, while 11 per cent said they were "more likely" to buy such goods.
For China-made products, 11 per cent people said they were "more likely" to buy these products, while 30 per cent said it did not matter to them whether goods were exported from the dragon country.

Fortune magazine, which surveyed 1,000 adults throughout America between January 14-16, said "where a product is manufactured does not impact Americans' purchasing decisions except when that product is made in China."

"Nearly three-in-five (57 per cent) Americans are less likely to buy a product if it is made in China. When products are manufactured in other areas, such as Eastern Europe (57 per cent), Western Europe (55 per cent), Canada (53 per cent), India (52 per cent), Africa (51 per cent), Mexico (48 per cent), Japan (47 per cent), and South Korea (46 per cent), nearly a majority say it does not matter."

Besides recalls of China-made products, one such incident has happened in case of India-made product as well in the recent past.

Illinois-based Raja Foods, which sells "Swad" brand of sindoor (vermillion) sourced from India, recalled 280 packages of the product last month after US Food and Drug Administration (FDA) warned that consumers should not use the product becase of high lead content.

The Fortune survey further said economy ranks as the top issue facing Americans today, with 87 per cent of respondents saying it was "very" or "extremely" important to them.

The survey considered the state of the economy, effects on personal spending, employment, international trade and which political party would do a better job of addressing these issues.
As fears of a recession continue to rise, the nation's economy has replaced the Iraq War as the most important issue facing Americans today, the Fortune poll found.

It also said that two-third (65 per cent) of Americans believe the economic conditions in this country are getting worse.

There were significant differences along party lines with a majority of Republicans (55 per cent) saying the economy was only fair or poor, compared to 87 per cent of Democrats and 76 per cent of Independents.

Besides, eight in ten Americans (79 per cent) said that the US Government had not done enough to help workers who have lost their jobs to increased foreign competition.

"A majority of Americans would support the following proposed policies aimed at helping workers who have lost their jobs to foreign competition and outsourcing," it said.

Source : - Hindustan Times

ERP Goes On-Demand in the Automotive Sector

By Lawrence S. Gould at CRM Buyers

An ASP is a form of outsourcing. What is outsourced -- or hosted -- is compute infrastructure, including computer hardware for data processing and storage, systems software, related hardware and software maintenance, as well as software applications of particular interest. The ASP customizes these applications, whether ERP, enterprise asset management, financial, or whatever, for the user company.

Enterprise resource planning (ERP) vendors are "creating products that are delivered anywhere in the world and that will provide compliance and standardization for the automotive community," according to Charlie Eggerding, vice president, automotive, for QAD. What's now notable is that user companies no longer need an extensive compute infrastructure. All they need are desktop computers that can run a Web browser and that can hop onto the Internet. Sound familiar? Think "application-service-provider-(ASP)-meets-Web-portals." Called "Software as a Service" (SaaS), in this new approach to ERP software is provided as a utility, priced like a utility, and delivered as a subscription service.

ASP versus SaaS

An ASP is a form of outsourcing. What is outsourced -- or hosted -- is computer infrastructure, including computer hardware for data processing and storage, systems software, related hardware and software maintenance, as well as software applications of particular interest. The ASP customizes these applications, whether ERP, enterprise asset management, financial, or whatever, for the user company.

ASPs wind up with multiple instances of an application, generally one for each of their customers, and each of those instances may be customized for each of the different customers and even for multiple sites of the same customer. Maintaining different versions of software (i.e., version control) is typically a very costly internal IT expense. In an ASP arrangement, user companies generally buy and capitalize the software, and then pay for the infrastructure over time.
In SaaS, more commonly known as the "on-demand" model, many different companies run off one copy of a software application. Unlike the ASP arrangement, user companies don't have to buy the software. Instead, they generally pay for the software application based on usage -- just like electric, gas, and water utilities. Usually this "utility" is accessed through a Web browser, though some SaaS providers require client-side software of one form or another.

Subscription pricing is more predictable. Users pay a fee per month or quarter or annually. Plexus Systems, for instance, licenses software groups, for example, ERP and manufacturing execution systems, for an unlimited number of users in X-number of facilities at a fixed monthly price for a period of time, say two or three years, regardless of growth. Then Plexus reviews the customer's head count because "that's the best proxy in an organization," says Mark Symonds, company CEO. "Now, instead of having to make a capital decision, customers are making operating budget decisions." (Implementation services, such as training, consulting, configurations, are extra.)

Version control is easier in a SaaS setup. Plexus, for example, has only one version of its software on a single infrastructure. "We don't have to cast about through a thousand different client-server configurations before shipping a patch with new features. Instead, we roll out new features every day. Our customers are always up-to-date on the latest version of the software," says Patrick Fetterman, Plexus marketing vice president. Yet everybody's software looks very different because of configuration settings (similar to templates).

Allaying Fears

Ironically, notes Jane Barrett, research director in the Value Chain Strategies Team of AMR Research, the flip side to SaaS and customizations is that it "kind of forces companies into using standard ERP software. It stops them from making maverick customizations to their ERP, which is a very expensive option, difficult to upgrade, and not always that robust." Outsourcing software and services is not new in automotive. Look at EDI service providers, suggests Barrett. "Rather than trying to keep up with every change that comes from GM or Ford, use someone's EDI capabilities and let them keep up with all the changes and notify you when changes need to be made. I think there's a huge value in SaaS."

Initially and typically, though, potential customers have some fears about SaaS, admits Symonds. Potential customers will ask, "What do you mean I don't have anything, not even a CD of the software? You mean my data is just out there on the Internet?"

To allay these fears, Symonds has several responses. First, Plexus has a steel-reinforced structure with biometric access around the company's ERP and database servers. These physical and electronic controls security are often far beyond what the customer has or intends to put in place. Second, companies worldwide are already reliant on the Internet every day for customer orders, communications, and so on. Last, Symonds points out that the No. 1 source of security breaches are disgruntled employees or ex-employees."Would you rather have [your company data] with a disinterested third party or have it less secure at your place with people who are very interested in your price lists, your customer relationships, and your profitability?" SaaS's recent popularity goes well beyond the "if you build it, they will come" mentality.

Realigning Priorities

First, SaaS lets users roll out enterprise applications in chunks to selected departments and divisions within the user company. second, user companies can have their ERP system up and running in days. Just enter company-specific data and off the company goes. This is attractive to a number of different companies: new companies, growing companies, divestiture spin-offs needing new or to replace existing IT, companies with old ERP systems, and companies with ERP systems customized beyond the point of being able to be customized anymore without "breaking." Third, SaaS releases "enlightened" IT pros from the drudgery of applying patches, doing backups, and those kinds of things.

"The highest value IT teams have transformed themselves as business process consultants. They focus on translating the business needs to IT," says Fetterman. The less-than-enlightened see their role as babysitting the hardware. "That's not the biggest value-add for manufacturer, especially if they find themselves as programmers for a small to mid-size manufacturer," adds Symonds.

SaaS "keeps your core competency and outsources what's not your core competency," Barrett points out. Namely, IT. (SaaS users still need IT pros to maintain file and print services, Internet connectivity, local networks, and integration to other devices such as programmable logic controllers.)

Many ERP vendors that provided their products the conventional way have rewritten those same products for SaaS. For example, the latest version of QAD's ERP system, now packaged for vertical markets, can be provided on-demand. Specifically, the QAD Enterprise Applications 2007 Automotive Edition consists of QAD's ERP system, Supply Visualization (QAD's portal-based trade exchange and supplier community, now integrated directly with QAD's Transportation Management system), and EDI capabilities-all as SaaS.

Despite its global reach, SaaS use is mostly regional so far, according to Wolfram Schmid, manager of industry and product marketing for automotive for Infor Global Solutions. In North America, France, Germany, and the United Kingdom, SaaS is becoming increasingly popular. Asian automotive suppliers, particularly those in China, are starting to look at SaaS.
Schmid doesn't think SaaS will replace traditional software licensing; it'll just be an "additional opportunity." However, QAD's Eggerding gives the conventional ERP licensing another five years. After that, it'll be SaaS mostly, if not all the way.

The China Experience

At the end of 2006, China's internet population was 137 million.

By the end of 2007, it soared 53 percent to 210 million, according to the China Internet Network Information Centre.

China is 5 million shy of becoming the nation with the largest internet population, according to PC World. And surprisingly, 40 percent of new users added in '07 came from rural areas. Typically "wired" Chinese citizens hail from urban areas like Beijing.

Music was the most popular online feature, with 86.6 percent Chinese going online for it. Instant messaging came in second, with 81.1 percent.

Email ranked fifth, with 56.5 percent.

Just wait till there's a Chinese version of LinkedIn, FaceBook, and all the other social media! The China Experience will be revolutionary. Is this a new business oppurtunity waiting to be tapped?

Dale Wolf at The Perfect Customer Experience

Lessons from January 2008: Udayan Mukherjee

The thing about life is that one makes mistakes. Many mistakes were made in the second half of 2007 and those sins have to be washed away by blood, such is the way of financial markets. Some participants will go down under and never be able to get back to the market again but most will survive. The pain will linger for many months, maybe years but lessons have to be learnt. Every such debacle has lessons for us and the sooner we forget them the more we suffer.

The first lesson is not to let stock price performance become the sole reason for buying, a mistake which was made in abundance in the last 3 months. What couldn't be explained by fundamentals was credited to liquidity. The present lost all relevance as people chose to focus on the distant future, perhaps simply because the present could never justify those ticker prices; only a hazy dream of the future could. Traders and investors had no time for fundamental analysts, in many cases they were labelled "cribbing fools". Chartists became the most celebrated tribe on the street as only they could see and predict the one way run to glory for many of the hot stocks even as fundamental watchers cringed at valuations....till the music stopped. Don't get me wrong, charts do work in trending markets but once stock prices veer away completely from fundamental value, people need to get careful. But they never are. Now that the blinkers are off, people should ask themselves why stocks like RNRL, Ispat, RPL, Essar oil and Nagarjuna fertilisers have lost 50-70% of their value. It is simply because their stock prices had snapped all connection with underlying business fundamentals, earnings and value. Their stock prices became the only reasons for buying them which works for a while but not forever.

The other big lesson, one which should have been driven in earlier in May 2006, is the danger of overextending oneself in the futures market. The lure of stock futures is easy to understand. Put in some margin, take a big exposure on a fast moving stock, make a killing when prices shoot up. Repeat exercise. Just that people forgot that prices may also come down and at a pace which noone can even imagine, maybe their friendly stockbrokers forgot to tell them that part of the story. The result : unbridled speculation that ran into lakhs of crores, excesses that we are paying for today. Even this fall will not cure investors of their love for futures speculation but if at least some amount of caution is injected it would have been a worthwhile learning. Futures are not toys for amateurs, they are time bombs in the hands of inexpert and inexperienced traders, it's only a matter of when the fuse runs out.

The other learning which I hope will play out in the future, as it has in the past, is that it pays to be brave in times of panic such as these. If I was allowed to invest myself , which I am not, I would have no hesitation in deploying serious money into the market today, knowing fully well that prices may fall more tomorrow. And I would be standing there tomorrow to buy more of the same, till my money ran out. India is going to be a terrific stock market story for many years to come, even an intermediate bearish patch cannot shake that conviction of mine. At best, one will have to wait a bit for the returns to follow. That's alright. You are happy to put money in a bank FD and then wait for one full year to collect that measly 8%, aren't you? Then why does the stock market need to give you 20% every month? In the last one year, I haven't seen so many good stocks trade at such mouth watering levels. Forget trading, avoid the duds which were fuelled up by operators, just go out and buy those bluechips. They will deliver, even if there is a global market meltdown for a while, and if you are a bit patient you will be rewarded. But do remember January 2008, as history will repeat itself again in the future. Just that our memories tend to be too short and our greed too much. Udayan Mukherjee NOTE: This column was written at 2pm, even as the markets were trading.

Source : www.moneycontrol.com

Why did the Market Fall?

Systemic probs, margin calls behind mkt woes: Dipan Mehta

Speaking to CNBC-TV18, Dipan Mehta, Member, BSE and NSE, said the reason for the fall in opening trade lies in the structure of the market. “We have been increasing the futures list and have been seeing leveraged positions being built-up in excess of Rs 1 lakh crore on the futures market. We have been seeing a lot of investors turn to traders and take long positions in the futures market. The damage of all these policies is something that we have to face at this point of time.”

He feels these leveraged positions are what are causing problems at this point of time. “Not to mention the fact that we are seeing relentless selling coming from FIIs as well. The circuit down closing on ridiculously low volumes has more to do with mark to market problems and margin calls.”

Excerpts from CNBC-TV18's exclusive interview with Dipan Mehta:

Q: What do you expect to see when the markets reopen? How much panic or problem is there by way of systemic issues right now?

A: It’s more of a systemic issue at this point of time. Just consider the facts. We have the best fundamentals in the entire globe and yet our markets are the worst performers. What are the reasons for that, no market is down 10% and we are down 10-12%.

The question we need to ask is what is the reason for that? The reason lies in the structure of the market. We have been increasing the futures list and have been seeing leveraged positions been built-up in excess of Rs 1 lakh crore on the futures market. We have been seeing a lot of investors turn to traders and take long positions in the futures market. The damage of all these policies is something that we have to face at this point of time. These leveraged positions are what are causing problems at this point of time, not to mention the fact that we are seeing relentless selling coming in from FIIs as well. But the circuit down closing on ridiculously low volumes has more to do with mark to market problems and margin calls.

Q: What is your expectation that buying would emerge in good quality stocks and will come off circuit? Do you think the systemic problems will lead us from one circuit to another?

A: Try to understand that the exchange calculation of margins is online. Every time a price comes in, the margin gets recalculated, whether it is initial margin, mark to market on any cash market or futures market.

So, if the market closes lower; that much more of the brokers margins are getting utilized. At this point of time, a lot of brokerages, even if they have liquidity, their margins which they have placed to the exchanges, are getting utilized to fund mark to market.

But at Stage I, the exchange will debit or take these margins from the broker’s account. That is creating the maximum problem. It is just that the online calculation of margins, the way the market goes down further, the mark to market losses, only expand. You cannot exit out of the positions, because the market is closed or there are no buyers. It is causing panic and tremendous stress on the entire system or the capital markets.

Q: Which is bigger, the weight of money, which might want to get in at these prices or technical unwinding pressures, which still remain in the system?

A: The technical unwinding problem still remains in the system. I would like to draw some parallel to what happened in May 2006. At that point of time, the total low open interest in stock futures was at Rs 33,000 crore. By June 14, when the market bottomed out, it fell to Rs 10,000 crores, which means that 70% of the open interest got squared up or was unwound.

At this point of time, the total decline is about 30% or Rs 24,000 crore. So, if you have a co-relation between what happened in May and what could happen at this time in 2008. We may have some more unwinding of positions take place at this point of time. That may keep certain pressure on the market.

If your confidence and stability comes back and overall investors get the impression that the worst is over and a lot of stock prices will eventually trade at high levels than what they are at this point of time, then the investor or speculator is not panicky to square up his long positions.

So, it is a bit of an emotional-cum-sentiment kind of issue, at this point of time. There is fear on the street and if some confidence comes back, the market will get back into its fair rhythm. All the issues of liquidity, mark to market and other issues will automatically get resolved.

So, it has more to do with confidence at this point of time.

Q: There has not been too much raised, by way of leveraging issue. How are things for retail and HNI, because they have taken fair positions in some of the IPOs. Is there probably a bit of a leverage situation in the secondary market as well?

A: The major leverage in the secondary market is through stock futures. If you see the numbers, which come from margin trading or from temporary funding provided by the brokers; those numbers are a pittance compared to the size of trading volumes or open interest, which is there in the futures market.

So, the primary provider of leverage in the secondary market is to the future.

Q: What is playing out in the dealing rooms now?

A: There is a squaring up of long positions. We are seeing a lot of expansion taking place among the retail brokerages. There are issues that the country has, in terms of communication, transfer of funds and collections. That is perhaps playing out.

Maybe, it has more to do with squaring up of long positions. I can imagine that the dealers are in touch with their clients, to ask them whether they are going to fund the mark to market losses, in the next few hours, or would like to square up their positions. That must be playing out at most brokerages, which have got a large retail base.

Watch the Video at Moneycontrol.com

Battling national risks

Though trade-offs in public policy are far more complex than in corporate policy, risks have to be managed in both

Cafe Economics | Niranjan Rajadhyaksha | Mint

Should governments manage risk the way companies do?

This may seem to be the wrong time to ask such a question. After all, these have not been good times for risk managers in the West. Many of them have been rapped on the knuckles for their failure to prevent mounting losses in the trading rooms that they were meant to police. Some have met a worse fate. Banks such as Citigroup, Merrill Lynch and Canadian Imperial Bank of Commerce have asked their chief risk officers to leave because they could not prevent the build-up of bets that eventually backfired.

Yet, central corporate risk offices do help top management get a grip on what the various decisions taken across the company mean for overall corporate resilience. Individual traders and managers usually assess the risk of their individual bets, or at most of the total investment and business portfolios they are managing. They have an incentive to take large risky bets to pull in the mega profits that will ensure a handsome bonus at the end of the year. They have little immediate interest in what this could do to the entire company they work for. Corporate risk officers are in-house regulators: they try to keep the risk faced by the entire organization under control and minimize potential losses.

This edifice has been shaken with the subprime and derivative tremors in the US and elsewhere. So, it is interesting that the World Economic Forum (WEF) has recently reiterated a suggestion it had made a year ago—that national governments should have a country risk officer who would be the “public sector equivalent of corporate risk officers in the private sector.” Why? Because “managing risk on a portfolio basis is as important in government as it is in the private sector,” says WEF in its new Global Risks 2008 report.

So, should governments think in terms of national risk? And try to manage it?

The idea seems alluring. Countries face risks—geopolitical, economic and environmental. Many of these risks are correlated. For example, consider the current rush to give subsidies for ethanol production in a bid to cut dependence on imported oil. Ethanol subsidies try to manage one type of national risk—energy insecurity. But they worsen another. Ethanol subsidies have put food security in some countries at risk, as corn, grain and sugar cane are diverted for fuel.

How should energy security and food security be balanced in public policy? There are two ministries and two sets of stakeholders involved. Is there a useful framework to sort out the tangle?

Then, some are global and outside the control of any single government: avian flu and climate change, for example. How does a government negotiate with others on these issues? These risks should ideally be quantified so that the trade-offs are more transparent.

Could a national risk officer do the job?

However, there are some important differences between risk management at the national and corporate level. The WEF report points to a few. For example, business is all about taking risks while governance is often about avoiding risks. Also, companies have a clear mandate to maximize profits and shareholder returns and their risk management can be designed with these clear goals in view. Governments, however, have to satisfy a far broader group of stakeholders and policy goals. And the trade-offs in public policy are far more complex than in corporate policy.

Britain has already taken a few baby steps towards setting up a national risk management office. It set up the Civil Contingencies Secretariat (CCS) in 2001. It sits at the heart of the British government, in the cabinet office: the stomping ground of the Sir Humphrey Applebys of the world. This group started off trying to improve post-crisis management, but has now taken on a more forward-looking role “in identifying and assessing potential risks to national resilience.” While the CCS website suggests that terrorism is the chief concern, it does mention other threats as well: flooding, outbreak of disease, failure of key utilities such as power and water, industrial accidents and even public protests.

It is not yet clear whether initiatives such as CCS will evolve into Orwellian nightmares. Or what risk management techniques national risk offices would use. Or whether the state will clamp down on private business and individuals in the name of protecting national resilience. It is always preferable if the financial markets evolve further and provide ways to buy insurance against large nationwide shocks. Bonds that insure against natural catastrophes such as floods and earthquakes (the so-called cat bonds) have already become popular.

That said, evaluating public policy from a risk manager’s viewpoint could be a useful route to follow.

Your comments are welcome at cafeeconomics@livemint.com

Sensex crash: Who won, who lost

PTI January 21, 2008 Rediff

The BSE index's downslide of over 1,400 points was spread across the market, with just one stock ending in green for every 20 falling prey to the meltdown.

According to data available with the Bombay Stock Exchange, 139 stocks, or 4.94 per cent of all actively traded scrips, gained. In contrast, 2,657 stocks, or 94.52 per cent, ended in the red on the bourse.

The gainers did not include a single company from Sensex, 30-share index of blue-chip companies. Besides, there were just three gainers on the BSE 500 index as well.

The BSE 100 index also did not have any gainers, while there were two in the BSE 200 index.

Taking a cue from global markets, the benchmark Sensex on Monday tumbled by 1,408.35 points, biggest single-day loss, shaving off over Rs 6 trillion from investors' wealth.

However, shrugging off the overall weakness on the bourses, as many as 30 companies saw their share prices rising to new life-time highs, while 51 stocks got stuck at their upper circuit limit.

While the stocks scaling new peaks included some known names like Essar Shipping, Southern Ispat and Usher Agro, the list of those hitting upper circuit limit were mostly penny stocks belonging to T and Z groups of the BSE.

A total of 15 stocks remained unaffected by the upheaval in the market and closed flat.

• Biggest-ever loss: Sensex plunges 1,400 points
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• The 10 biggest falls in Sensex history
• Trading halted: BSE asked to clarify
• Market crash: Have you been hit?
• Investors lose over $300 bn in 6 days
• Market correction? What's that?
• These media stocks could make you

Retailers, get ready for the magic of CRM

International giants entering India in a big way was an impending trend only waiting to happen. If you haven’t prepared for the tussle yet, this is your chance. Indian retailers are set to impress customers and increase their bottom-line with the aid of the right CRM.

COMING SOON!

The Ultimate Productivity Tool: The Unified Desktop

From Job Satisfaction to Better Business Intelligence – The Desktop Brings It Together

By Randy Saunders at Cincom Systems

Fundamentally, people enjoy being good at their jobs, and they enjoy being provided with the means to do their jobs well. Knowledge empowers the smart agent, and ready access to appropriate information for each customer makes the challenge of a diverse customer base much more manageable and enjoyable for front-line employees. Job satisfaction is closely tied to the ability to understand and execute the tasks at hand, and the unified desktop is an important tool for employee empowerment.

Routine customer-service interactions may require agents to interact with five, 10 or even 15 or more systems. Much of the time, these systems are ignorant of one another, requiring agents to log on each time they access a new system. This requires customer data to be re-keyed with each new program, each with its own unique interface that must be learned and mastered over time.

The only way agents can be productive and meet their performance and satisfaction targets is to understand the slate of tools at their disposal. As a result, companies that persist in relying on multiple disconnected agent applications on the desktop condemn themselves to lengthy, complex agent training practices that must touch on each and every application, documenting all of the use cases, dependencies, and quirks of each one. This is expensive and time-consuming. The alternative, skimping on agent training, leads to wasted time, increased escalation, and lower customer satisfaction.

Unifying the agent experience into a single, consistent desktop takes the complexities out of the training process and job performance. By promoting a single, browser- and tab-based approach that is widely understood by computer-literate professionals, enterprises can streamline the agent education process, making it easier to bring new agents online without spending weeks in technical training. Cutting out lectures on green-screen etiquette also frees up more time for value-boosting activities, such as cross-selling briefings and product education. Simplification equates to higher job performance and satisfaction.

Productivity Beyond the Contact Center

Bringing the entire contact center in sync with the same customer-service desktop has a significant benefit for management reporting and understanding as well. Because all agents have the same tools and techniques at their fingertips, meaningful, apples-to-apples comparisons between all of the agents on the service force are possible. Other metrics, such as customer cost-to-serve and cost-per-sale, are also free of distorting variables.

Management is also more clearly able to see the impact of call resolution because call closure procedures are uniform, no matter what back-end functionality comes into play during the course of the call. Compare that to a contact center using several customer-service desktop tools, where post-call procedures may differ by application and involve inconsistent closure status codes, or not even offer the same abilities to record the status of the inquiry and the customer’s post-call disposition. A consistent view into post-call activity makes understanding customer lifecycle and retention trends much easier.

The universal desktop view also makes it considerably easier for constituencies such as sales, marketing, and finance to understand the customer-service business processes at play and tailor their own activities accordingly. Marketing and the contact center, for instance, can quickly find themselves at odds if customer campaigns are launched when the support staff is not prepared for an increase in call demand or the new requests that will be generated by customer response. When marketing and service can work together, using a common frame of reference provided by the universal desktop, such conflicts are far less likely. In fact, the thin-client accessibility of many available universal desktops enables employees and executives across the company to see the exact customer service experience, without the need to deploy additional programs or special access on the user’s desktop.

The concept of a “universal” desktop shouldn’t be mistaken with one that is inherently inflexible or ill-suited to a diverse work environment. On the contrary, the universal desktop concept is particularly well suited to diverse, complex working environments because the desktop view can be tailored to instantly adapt to the task at hand, whether categorized based on user role or access clearance, or the topic of the customer interaction. Universal desktops can be quickly configured to support multiple departments and customer campaigns simply by implementing rules that dictate how the desktop will appear to each user, all without requiring the user to change applications or even know what functionality they will need at any given time.

The More They Know, the More You Grow

Every aspect of modern business runs on information, and the contact center is the hub of knowledge flow, both into and out of the organization. Bringing sensible presentation and a unified view of critical business data to every agent desktop is a meaningful and critical way to rationalize the powerful yet uncoordinated applications that drive each and every customer touch, and improve client value at every opportunity.

Every touch in the contact center, whether inbound or outbound, represents a unique and immediate opportunity to extend and strengthen a customer relationship. Each interaction, whether it is a sale or a save situation, requires that your agents be prepared to respond quickly to the unique demands of the individual customer, and have the best decision support available. The universal desktop gives your organization the best chance to make the right decisions for customer satisfaction and profit growth, each and every time a customer interacts.

 

This article is an excerpt from the Cincom white paper “Grow Your Business: The Value of Knowledge in the Contact Center.”

 

An IPO that made a WORLD RECORD!

Reliance is the name!!!!

Reliance Power maiden issue sets world record

The just-concluded maiden public issue of Reliance Power, which was oversubscribed 73 times and garnered an astronomical $190 billion, has created many world records, its chairman Anil Ambani said on Saturday.

"It is the largest subscription of any IPO (initial public offering) anywhere in the history of global capital markets, with a record five million applicants," a beaming Ambani said at a press conference here, a day after the issue's conclusion.

"When Reliance Power lists early February, it will be among the 10 top listed companies in India with the largest number of shareholders in any listed Indian company or in the world," he said.

"If we assume it lists at the issue price of Rs.450, the market capitalization for the group will be around $100 billion," he said, adding that it will make his Reliance Anil Dirubhai Ambani Group the second largest in India in terms of market capitalisation.

Ambani said the issue came at a time when the Indian markets and global markets were experiencing a meltdown but yet attracted a record subscription of $100 billion from foreign funds, equalling 40 percent of India's foreign exchange.

"The inflow amounts to one-and-a-half times the cumulative foreign institutional investment (FII) flows into India since 1992. The Reliance Power IPO is greater than the combined subscriptions recorded by five top in India so far."

The five top public issues in the past were those by Mundra Port, Power Grid Corp, Reliance Petroleum, Idea and Power Finance Corp.

According to Ambani, provisional calculations revealed the issue was subscribed 73 times over. While the amount set aside for qualified institutional buyers, including foreign funds, was oversubscribed 82.5 times, that for retail buyers was subscribed 14.4 times over.

He said the company would fix the issue price at the top end of the price band at Rs.450 per share, with a discount of Rs.20 per share for retail investors - another first in India.

The Reliance group, that now stands divided between Anil and his elder brother Mukesh, came with its first public offer 31 years ago for launching a textiles unit. The issue then was oversubscribed eight times.

In contrast, when the Reliance Power IPO opened itself to subscriptions Jan 15, it was fully subscribed twice over in the first 58 seconds. By the end of the opening day, it was subscribed 10 times over, Ambani said. The company notched another record in launching the issue within eight working days of receiving regulatory approvals Jan 2, he added. It also distributed over 40 million application forms, and involved 177 bank branches at 126 bidding centres.

Ambani said after his group was carved out of the larger Reliance empire in June 2006, the market capitalisation had gone up from $4 billion to $100 billion.The companies under the fold include Reliance Communication, Reliance Capital, Reliance Power, Reliance Natural Resources, Adlabs and Reliance Energy.

Reliance Power proposes to use the funds to build power generation units across the country. As per company officials, projects worth 28,000 MW are in the pipeline.

"This is the largest portfolio of power generation within a geographical area or a group anywhere in the world," Ambani had told a press conference earlier. The government envisages an addition of 80,000 MW during the 11th five-year plan (2007-2012).The company, which is an associate of Reliance Energy, was in November awarded the 4,000-MW Krishnapatnam power project in Andhra Pradesh, with the lowest bid for a tariff of Rs.2.33 per unit among all qualified bidders.

Another major project of the company was the 4,000-MW Sasan power project in Madhya Pradesh, awarded in August 2007.

Free trade fears on the rise

Economic anxiety has inspired a backlash against free trade, as a new Fortune poll shows, giving Democratic candidates a potent issue. Will it lead to protectionism?

By Nina Easton, Washington editor | CNN Money

(Fortune Magazine) -- "We are the champions - of the world" may be the verse that rings out in stadiums across the U.S., but in the great game of global trade, Americans are increasingly feeling like the losers. A large majority - 68% - of those surveyed in a new Fortune poll says America's trading partners are benefiting the most from free trade, not the U.S. That sense of victimhood is changing America's attitude about doing business with the world.

We are a nation crawling into a fetal position, cramped by fear that America has lost control of its destiny in a fiercely competitive global economy. The fear is mostly about jobs lost overseas and wages capped by foreign competition.

But it is also fueled by lead-painted toys from China and border-hopping workers from Mexico, by the housing and credit crisis at home, and by the residue of vulnerability left by 9/11 and the wars that followed. Americans were willing to experiment with open borders during the exuberant 1990s. Today that mood has darkened. We are turning inward. Especially now, as the U.S. economy sputters, we are on the verge of becoming a country of economic nationalists.

That may be hard to imagine if you are reading these words from the aisle seat of a packed business-class cabin on one of those new nonstop flights to Guangzhou or Mumbai or Abu Dhabi, the numbers on your company's latest deal flashing on your laptop screen. It may be hard to imagine, too, if your factory can't keep up with orders for diesel engines flooding in from Beijing or electronic parts requests from Brazil. Despite a continued massive trade imbalance, U.S. exports grew 12% last year, providing a cushion against the painful housing downturn.

Yet for several years average Americans have increasingly felt that they're running in place. Median household income in 2006, at $48,201, was barely ahead of where it was eight years earlier. So the prospect of a recession has made the anxious middle class even more so. Coming in a presidential election season, the approaching storm clouds have turned the economy into the No. 1 issue on the campaign trail. Fear is a potent force in American politics, and Democratic Party leaders have astutely tapped into rising voter unease about globalization.

Fortune's poll, a survey of 1,000 adult Americans taken Jan. 14-16, shows that voters have identified winners and losers in the free-trade agenda. Nearly half of those polled believe that growth in international trade has made things better for consumers (though nearly as many think it has made things worse), but 55% believe American business has been harmed, and 78% think it has made things worse for American workers.

Candidate Barack Obama encapsulated this feeling on the campaign trail in December when he said, "People don't want a cheaper T-shirt if they're losing a job in the process." What might be dismissed as just campaign-season populism has been given intellectual credibility by some economists, notably Princeton's Alan Blinder, a professed free-trader who has crossed over into the camp of those concerned about the outsourcing of service industry work. He has predicted that as many as 40 million U.S. jobs could be vulnerable, thanks to modern technology and more than one billion eligible new workers.

Speaking in November at a Federal Reserve Bank of Chicago conference, he declared, "It's not the British that are coming. It's the electrons that are coming, and it's going to cost jobs." The national mood swing is a dramatic one. With stubborn optimism and entrepreneurial swagger, Americans led the world in building a roadmap for global commerce during the 1990s, when Bill Clinton overcame resistance from organized labor to sign the North American Free Trade Agreement (NAFTA), linking the U.S., Canada, and Mexico to create the world's largest trade bloc.

It was an internal party battle that Clinton took on with gusto, beginning in the fall of 1991, when as a presidential candidate he shut down a debate among his strategists over what position he should take on trade. "Finally, Clinton looked up over his spectacles and said, 'I want all of you to understand something: I'm not going to run as an isolationist, and I'm not going to run as a protectionist,'" recalls William Galston, a party strategist now at the Brookings Institution. "I'll never forget that day."

President Clinton was able to bring along a majority of the public on an aggressive free-trade agenda. But today, according to the Fortune poll, nearly two-thirds of Americans are even willing to pay higher prices to keep down foreign competition. Now Clinton's party is leading America into this new era of doubt, its economic gurus convinced that globalization - in its current form - is costing the middle class and enriching an elite.

A time-out for free trade

Both Democratic frontrunners want changes to NAFTA, which Hillary Clinton now says has "serious shortcomings." Candidate Clinton also says she will take a "hard look" at the U.S. position in the Doha round of World Trade Organization talks, insisting "there is nothing protectionist about this." Obama praises globalization for bringing millions of workers into the global economy but wants a tax code that discourages companies from shipping jobs overseas.

No matter which candidate or which party takes control of the White House one year from now, free trade will - in the words of Hillary Clinton - take a "time-out." That's because Congress - which will most likely remain in the hands of the Democrats regardless of who wins the White House in November - took away President Bush's ability to negotiate trade deals by quietly letting so-called fast-track authority lapse last summer. And lawmakers won't hand that power back to any new President - Democrat or Republican - without major new federal programs (and new trade rules) designed to ease the stress of globalization on U.S. workers.

The Democratic mantra is now "fair trade, not free trade." During a "time-out" on trade deals, a President Obama or President Clinton would seek to extend international labor and environmental standards (already approved by Bush in the current crop of deals) and step up enforcement against China and other trading partners. A Republican President will need to accede to most of those demands to move a trade agenda forward in a Democrat-controlled Congress, and at least one of the party's leading presidential candidates - former Arkansas governor Mike Huckabee - is mostly in sync with the Democratic mood, complaining about "an unlevel, unfair trading arena that has to be fixed."

It's not just America that's experiencing a trade backlash. Peter Mandelson, the European Union's commissioner for trade, looks past his frustrating meetings with free-trade skeptics on Capitol Hill to his own continent and describes growing "economic insecurity that is ripe for disaster, that feeds populism and protectionism." Former U.S. Trade Representative Mickey Kantor told Fortune that as the global economy becomes more integrated, "trade has lost more and more credibility all around the world - India, Brazil, France. For some reason, everyone thinks they are the loser."

Maytag as a metaphor

In the U.S. the newly shuttered Maytag plant in Newton, Iowa, doubles as an altar to the political spirit of economic nationalism. In the months leading up to the Iowa caucuses, Democratic candidates -and Republican Huckabee - trooped into town to genuflect and borrow its brick image for their argument that globalization has hurt the middle class and enriched a narrow elite on Wall Street. Maytag, which anchored this town for more than a century before it was battered by foreign competition, seemed the perfect election-year symbol for the price of globalization.

But was U.S. trade policy really the culprit? "Maytag was mismanaged," says town mayor Charles Allen. By the time rival Whirlpool gobbled it up in 2006, Maytag's market share was at an all-time low, customers were grumbling about the quality of its washers and dryers, and one analyst was quoted describing the company as a "two-inch putt from bankruptcy." Maytag CEO Ralph Hake was blamed for cost cutting that destroyed innovation.

When I visited Newton on the eve of the Iowa caucuses, I expected a dying town. Instead I found a vibrant community of 16,000 with serene neighborhoods and a bustling downtown. The damage caused by the plant's closure shouldn't be minimized - unemployment in the area shot up to 5.6%, far above the state average. But Allen says the town had long been adjusting to the prospect of losing its largest employer. A NASCAR raceway has opened; a new biodiesel plant is up and running; TPI Composites, a wind turbine manufacturer with plants in Mexico and China, has just agreed to build a new facility with 500 jobs. And about 50 former Maytag engineers have launched their own research and development business, called Springboard.

All this local ingenuity and determination to create a new economy was lost in the political noise leading up to the Iowa caucuses. Most analysts agree that the underlying reason for public anxiety over globalization is the visibility of factory closings and the stagnation of income. But the reasons behind this decline are complex. Technology, for one. "It's first and foremost a story of technology and of the technology driving out middle-income jobs - whether they are in services or in manufacturing," economist Laura D'Andrea Tyson, an advisor to Hillary Clinton, told Fortune's Global Forum last October. By contrast, for educated elites "technology gives you a global stage on which to earn your income."

Diana Farrell, director of the McKinsey Global Institute, cites demographics for a "very large part of the softening in growth of wages." In other words, wages moved upward with a baby-boom generation that saw rising waves of Americans going to college and then on to higher-paying jobs. But that upward motion has crested; the population has stabilized. But those aren't answers that satisfy voters in a heated election campaign. (As Tyson noted, "On the campaign trail, a one-sentence answer is what matters.")

So Democratic leaders have tapped into the sour public mood over globalization. "The public is not listening for how you expand trade," says Kantor, a Democratic veteran now informally advising Hillary Clinton. "The public wants to hear just how frightened you are. Someone has to say, 'I understand it, I get it.'" But then what?

Most Democratic leaders insist they don't want to, nor believe they can, halt the global flow of commerce. Where they hope to connect with voters is by promising to strengthen the safety net. "America frankly does a disgraceful job with displaced workers," declares economist Blinder. Americans resoundingly agree: In our poll, 79% of those surveyed said the U.S. government hasn't done enough to help workers who lose their jobs to foreign competition.

People in the survey favor more job training, longer unemployment benefits, and limits on imports from countries that use child labor or pollute the environment. Blinder calls for an education system more focused on jobs that can't be shipped offshore. There are plenty of worthy ideas, but policy prescriptions have to be combined with leadership that encourages Americans once again to believe in their ability to compete in the world. Just as the shutdown Maytag factory provided an easy symbol of globalization's cost in the 2008 election, the town of Newton, Iowa, could symbolize the ultimate gains of adjustment in the next. But only because of a belief by local leaders that they wanted to be part of a global economy, not shut off from it. 

Simplifying Web 2.0

Mass amateurisation of the Web. That's Web 2.0 to you!
What exactly is Web 2.0? When everybody can use the web to showcase their opinions, their work and get it to look and behave the way they want to, you get an amateurised version of the Web. But is it working!

COMING SOON!

High-value Manufacturers Need to Maximize Customer Ownership Experience

“Getting it right the first time is critical to the customer ownership experience – and a challenge for complex manufacturers.”

By Randy Saunders, Cincom Systems

Manufacturers of high-value capital equipment and their distributors recognize that the initial purchase of a complex industrial product is a fraction of what the customer will spend over the course of owning and operating that equipment. Over a product's 10- to 20-year lifespan, customers will rely on your service and warranty department's support to minimize downtime and keep their equipment performing.

Consistent and reliable customer service – the ability to “get it right the first time” – is critical to satisfying the ownership experience. Customers care nothing for the complexities that make delivering customer service in the manufacturing industry so different and more challenging than other areas. They don’t want excuses or delays. If the customer’s production line is at risk while waiting for a spare part or service, they demand immediate service. Manufacturers that meet these service expectations and challenges have an excellent competitive differentiator that can lead to winning new and repeat business.

The Nine Key Customer-Service Issues of Industrial Equipment Manufacturers

Manufacturers of complex equipment have many unique challenges when it comes to customer service. That's why most companies find that ordinary contact center software doesn't meet their needs and that they require a more specialized solution. Here we’ll consider nine of the key issues facing many complex manufacturers and what to look for in customer-service technology that will help you address these challenges.

1. Segmenting and prioritizing high-value customers and projects - Every manufacturer has its top-revenue or profit-generating customers. Or maybe it's the customers with the greatest global potential, a specific project with a tight deadline or a pilot project with a highly desired account. For any number of reasons, you might want to make specific customers or projects a top or higher priority.
What to look for: “Most people leave a company because they feel they’re not treated well,” according to Arthur Hughes, author of “The Customer Loyalty Solution.” “They feel that, for some reason, they have been ignored or not treated properly. The ability to dynamically set priorities so that all interactions from your most critical accounts either go to the top of the queue or are always handled by your top service specialists is a critical first step to preventing this neglected feeling.”

2. Complying with individual service level agreements (SLAs) by customer or even by project - Service-level management for customer support varies from manufacturer to manufacturer and is often one of the most critical and contentious elements of a contract. Some may have a single published service level, while others offer tiered service contracts with perhaps two or three levels of service. Or, individual service-level agreements may be customized by customer or even by project; an agreement may call for different service levels and different metrics for each product the customer buys. Needless to say, this can become very complex to manage in the contact center, magnified even more when there's a merger between companies or even a consolidation of divisions.
What to look for: One manufacturer has found that without a “single view” of the customer through a unified desktop, meeting specified service levels quickly became unmanageable. The ability to track and report on SLA performance metrics allows them to quickly and easily identify any problem areas, and to more precisely negotiate future contracts and SLAs.

3. Supporting complex equipment that's routinely modified and reconfigured over a long production life - Over a product's 10- to 20-year life span, complex machinery is often reconfigured to address changing maintenance requirements or customer needs. Many times the discrepancies between a product's original configuration and its current configuration can be dramatic.
What to look for: One Midwest machine manufacturer had this very problem. Because its machines are highly specialized and have a long service life that may extend more than 20 years, each time a customer called, the service agent had to manually research the customer’s history to ensure that they received the correct part or service order. This led to much longer customer wait times than the company felt was acceptable. A unified agent desktop that automatically searched and displayed a complete profile and history enabled the company to respond quicker as well as measure and track customer interactions and transactions for improved productivity and reporting.

4. Solving customer issues quickly - Most customer-service departments routinely access four or more different business applications to find an answer. Often this is because of existing databases or systems that are not able to collaborate across applications. Not only is this time-consuming for the service rep, the customer is waiting.
What to look for: A unified desktop that gives your service reps a 360-degree view of all pertinent customer information will enable them to improve first-call resolution and call-handling times. By delivering the right amount of back-end information to address the task at hand without toggling from system to system or drilling through information, the service rep’s time and effort is reduced and the customer experience enhanced. One manufacturer found that such a system enabled them to improve their call response time by 73%.

5. Sharing customer and product knowledge across all reps - Duplication of efforts is frustrating for both service reps and customers alike and practically unavoidable when the systems don’t integrate across applications and stations.
What to look for: While it would be great if a customer could communicate with the same customer-service agent with every interaction, often this is not physically possible. However, it is possible to create a case management and contextual knowledge base that reps can tap into to resolve customer issues. Make sure the application can be configured to store any information about customer communication history, product issue-related events and status, and any product information such as operational and warranty/repair information.

6. Consistent handling of customer requests through their communication channel of choice - Gone are the days when customers just picked up the phone to call customer service. Today, they may communicate using web forms, web-based live chat, e-mail or fax. On a single problem or issue, they may interact with your service center using a combination of all the above.
What to look for: The ability for service reps and engineers to manage, synchronize, and coordinate all customer interactions over multiple communication channels. So no matter how the customer interacts with the contact center, all communications are managed, queued, and tracked consistently. For example, the parts and services group at a large machine manufacturer uses a hosted application with multiple channel capabilities to interact by phone, e-mail and fax. They are able to view all previous interactions regardless of channel to get a complete view and status of any parts or service orders.

7. Intelligently routing customer interactions to the best available service rep - All service reps are not created equal, and as every business will testify, not all customer interactions are of equal importance.
What to look for: The most successful contact centers are able to group service reps by skill level, geography, and familiarity with a specific customer, dealer, or project. This is especially true for complex manufacturers. The manufacturer mentioned above intelligently queues all customer interactions and then distributes the contact using skills-based routing to ensure a qualified rep handles each interaction. Additionally, if a customer needs to be escalated to a knowledge worker such as an engineer, you’ll want that knowledge worker to view the same history, case management, and resources so that you can have an uninterrupted, continuous conversation.

8. Balancing the workload across all service reps and locations - A key to maximizing call center operations is to optimize the call distribution and level the workload by managing the interaction queue and routing all communications appropriately. What to look for: A web-based, hosted system that can route calls and present desktop views anywhere, giving you flexibility to manage high call volumes and leverage company experts at home or in other locations. This also provides a strong level of business continuity capability in the face of an emergency or other event that might otherwise impede service.

9. Performing real-time measurements and reporting on your customer-service and warranty operation - In the pursuit of the continuous improvement required to remain competitive in today’s business, it is a necessity to be able to track, analyze and report on what's happening in the service center.
What to look for: Managers should have the ability to analyze critical service metrics including service-contract performance and profitability, up-to-the-moment service activity by customer, and actionable customer and business insight. Managers should also have the option to select from standard reports or create their own ad hoc reports. This has enabled the contact center manager of one manufacturer to track the number of quotes converted to purchases and provide detailed reports on results, helping to guide future actions.

Manufacturing experience delivers rapid ROI and implementation

The unique nature of industrial manufacturing and the common issues of multiple databases and applications often bring complexity to the contact center. Manufacturers looking for a customer-service and warranty communications system should look for a vendor that has experience in the manufacturing industry and understands their unique environment. They should expect to see examples or testimonials from existing installations that show measurable results in the following areas:

· Improvements in service efficiency

· Increases in parts and service revenue

· Increases in new-equipment sales and replacement parts from new and returning customers

A recent trend in the industry is a move to hosted solutions. Hosted solutions can greatly streamline your implementation, minimize internal IT requirements, eliminate hardware investments, and reduce maintenance costs. With these advantages, you can reap the benefits of a robust customer-service application, with minimal risk.