On A Lighter Note

We make them cry who care for us.

We cry for those who never care for us.

And we care for those who will never cry for us.

This is the truth of life., its strange but true.

Once you realize this, its never too late to change......

HAPPY WEEKEND !!

IT Investment and Priorities Out of Sync

Survey shows “customer value” just lip service in most IT departments

While 72 percent of information technology (IT) managers at build-to-order and engineer-to-order manufacturers rank becoming customer value-driven as their highest priority, only 25 percent have plans to evaluate the front-office infrastructure and processes often crucial to customer value. This is according to a research report released today by software maker Cincom Systems (http://www.cincom.com/acquire).

“Best Practices in IT Front Office for Build-to-Order Products” (http://www.cincom.com/ITreport) discusses the findings of a report from a technology perspective on the state of mass customization and build-to-order practices.

Of the IT managers surveyed, about 85 percent ranked becoming customer value-driven, reducing costs and introducing new technology as their highest priorities. Many of these priorities could be met with a knowledge-management system. However, knowledge management ranked last in priority with only 34 percent ranking it as “important” or “very important.”

Seven Important Company Metrics Frequently Unmeasured

In addition, many IT managers at these manufacturing companies considered a number of measures highly important in their organization. However, seven of these important metrics were seldom tracked despite being eminently trackable, especially if front-office and back-office systems are automated and integrated.

The seven metrics of high importance¾but relatively low tracking¾are:

1. Quality of data
2. Order rework
3. Customer-facing time for sales reps
4. User adoption of IT systems
5. Quotation rework
6. Win rate
7. Perfect order rates

The survey results show that there is “a lack of understanding among IT professionals as to the potential impact of front-office automation and integration with back-office systems to the bottom line,” says Jim Wilson, Cincom Program Director and author of the report. “Success of customization efforts appears to be holding back initiatives in this area.”

Cincom Systems targeted the survey at senior IT managers at 1,840 manufacturers of complex industrial, electrical and transportation equipment and systems.

For a copy of the report, please visit www.cincom.com/ITreport.

Survey shows “customer value” just lip service in most IT departments

It’s just a wake up call for the IT industry

It would be pessimist and unfair to assume that we could no longer be the greatest providers of outsourced software services for the world. The industry simply needs to evolve to grow into a bigger industry with larger targets. At the same time, the country needs to prepare as a whole to provide an appreciable environment to overseas customers.

The country is fretting over what seems to be a not-so-bright-future for the Indian IT industry. For those making the bucks, India’s fairytale story can’t seem to go bust so soon. And it might not. Yes, the IT industry is being met with serious challenges that it needs to address immediately. But the good news is there is still a chance and all we need is to prepare for the future.

On the surface, there seems to be a downturn in India’s bright and booming IT industry. To start with, there is the fluctuating rupee against the Dollar. Some time back the Indian rupee has strengthened 15% against the Dollar the last one year. But America being the primary provider of outsourced business to India’s IT companies, their dipping economy fares trouble for companies here.

Another twist to this tale is the reduced spending on IT services by American companies as their economy slows down. Not only has this caused a drop in the rate of salary hikes and hiring, American firms are also passing on and creating lesser work for Indian’s IT companies. As the bulk of work lessens, India being the largest provider of low-cost outsourced services, the impact is reflected surely and poorly.

Fortunately, this is not the end of the story. So far, Indian companies have been providing peripheral work to foreign firms. But times are a changing and any IT firm that wants to keep evolving at the same rate will have to grow to be able to provide higher margin work like consulting.

As Infosys Chief Mentor and Non-Executive Chairman Narayan Murthy has constantly pointed out, another bottleneck the Indian IT space faces is India’s clogged infrastructure. Any foreigner, who steps down at the Indira Gandhi International Airport in Delhi or the Bengaluru International Airport for the first time, will not get the best first impression. For a country that opened its doors for other countries almost a decade back, there is poor development.

Our airports need serious makeovers. Let’s hope the new ones will provide the extraordinary experience that a visitor deserves. If you walk down the road from Bangalore’s airport to the city’s best-known hotel Leela, the traffic and pollution are stifling. Similarly, if you land at Delhi or Mumbai’s international airports, there is nothing welcoming about them yet. The efforts are on, but it needs speed and urgency. Or we are bound to lose work to competitors like China, eastern Europe and Russia, who not only provide low-cost services but also better propriety.

Competitors are another major threat to Indian’s IT industry. While the industry might not be as organized in countries like Russia and China, they are on their way. And they are also producing quality engineers, comparable to India. Even countries in central Europe are not very far from achieving what we have been bloating over.

India needs to stabilize the way IT firms are working. The talent is there but we still fall short of the demand. If we want to continue supplying work to firms abroad, we need sufficient talent within the nation to meet the demand. Engineers don’t simply need to provide outsourced services that mainly involve testing services. If the industry wants to survive, it will need to train professionals to do substantial tasks that will help firms move up the value chain.

Even companies that are outsourcing work to us now want to pass on more evolved work to India. Besides, the kind of outsourcing services we are providing right now might become redundant very soon. They will soon be automated and we will be forced to take on other work. We need to prepare our systems and professionals for a future that involves different work like developing systems and solutions for foreign clients. Companies like TCS and Infosys have taken the clue and are already undertaking work that will help them grow from a service provider to a policy enhancer.

At the same time, despite what the scenario looks like, salaries are being hiked at tremendous rates. Salaries of those higher up in the ranks is soon likely to match of those in the United States. This is not a positive sign for the low-wage advantage that we currently offer.

With annual growth rates of nearly 30% in the past ten years, Indian IT industry has been resting in peace. We have provided a bulk of talent and spearheaded some of the greatest software development any country has provided. But it’s time to gear up. If we don’t change, and fast, we could very well be headed for a fall.

Offshoring: Not the Answer to the Challenges of Globalization

In the earlier version of the flat world, the contemporary business tool, offshore outsourcing, which was discovered a few years back, grabbed the world's attention. Some companies adopted the tool without any hesitation while others doubted and even criticized. But now, the verdict was clear: Offshore outsourcing enabled globalization and its economics brought value to the business. What now?

If Thomas Friedman was asked to write the new version of his international bestseller The World is Flat, he would have titled it ‘The World is Becoming Flatter’. In the earlier version of the flat world, the “contemporary” business tool, offshore outsourcing, which was discovered a few years back, grabbed the world’s attention. Some companies adopted the tool without any hesitation while others doubted and even criticized. But now, the verdict was clear: Offshore outsourcing enabled globalization and its economics brought value to the business. What now?

The direction, where global companies are heading today, leads them to the flatter world. And, the interesting thing in this new world is to watch the companies’ reaction to globalization and their changing competitive tactics. They are actually discovering new ways of doing business.

As the sourcing world gets matured, most companies plan to focus internally on making their business processes more efficient, according to a recent study conducted by Economist Intelligence Unit on behalf of EquaTerra, a global sourcing advisory firm. In response to globalization, 54 percent respondents to the study seem to be focusing internally on making their business processes more efficient while 46 percent to be concentrating externally on investing and expanding in foreign markets. “Far fewer companies cite moving operations to lower cost markets (29 percent), or outsourcing/offshoring (11 percent) as their primary response to globalization,” according to the study titled The Benefits and Challenges of Globalization.

The study, which is based on the responses from 217 C-level and other senior executives from 19 industry groups worldwide about the benefits and challenges of globalization, also reveals that 61 percent of Western European respondents cited that business-process efficiency is the most important area to address. And, the need to enter foreign markets and expand their presence there was a slightly higher priority for 67 percent Asian and 47 percent North American respondents.

Source: Equaterra/Economist Intelligence Unit

Courtesy - Global Services Media

ERP Options for Industrial Machinery and Components Manufacturers

The Aberdeen Group has created a follow‒up to that report, "ERP Options for Industrial Machinery and Components Manufacturers." It identifies specific vendors and functionalities that best-in-class manufacturers are considering, and is available compliments of Cincom Manufacturing Business Solutions.

Download the full report.

Outsourcing--To America

Some pundits and politicians love to complain about how Americans lose their jobs because of cheaper labor overseas. But many foreign companies create jobs for Americans by investing and operating in the U.S.

"International business these days is a two-way street," says Daniel F. Spulber, a professor of international business at Northwestern University's Kellogg School of Management.

While many jobs formerly held by Americans do go offshore, some offshore jobs are returning to U.S. soil. In fact, officials from states and dozens of municipalities actively court foreign companies, hoping they will bring new jobs to their areas.

This trend is most evident in the automotive industry--nearly every major automaker has operations in the U.S. America is the world's largest market for automobiles, and considering the cost of transporting cars and trucks, getting close to the customer is especially important.

Toyota (nyse: TM - news - people ) began operating in North America in the mid-1980s. It currently operates seven automotive plants there, four of which are in the U.S. A fifth plant is under production in Mississippi. Toyota employs 40,000 manufacturing employees in North America.

In addition to the manufacture of cars and trucks, Toyota runs four unit factories in the U.S., where they produce such parts as engines, transmissions and wheels. Toyota also has a wholly owned subsidiary, Bodine Aluminum, an aluminum casting company, which operates three factories in Tennessee and Missouri.

BMW began operations in the U.S. in 1994, when it opened a plant in Spartanburg, S.C. "Some natural hedging was always a part of the long-term strategy, but also we have a corporate strategy of having production follow the market," says Robert Hitt, BMW's manager of public affairs. "Our original plan was to have about 2,000 workers here by the year 2000. We are now at 5,400 people here on the site."

Earlier this year, BMW announced plans to spend an additional $750 million on a new assembly facility at its Spartanburg plant and add an additional 500 employees over the next five years. This will be the third expansion since the plant opened.

Besides the actual manufacturing of their cars and trucks, Toyota and BMW are using domestic suppliers to provide parts and services for their operations. BMW has over 200 suppliers in North America, 52 of which are located in South Carolina, and 41 of these are new companies started for the purpose of supplying the plant. In South Carolina alone, suppliers of BMW's Spartanburg plant employ over 14,000 people.

Toyota uses roughly 500 major suppliers in North America. "We've always had the philosophy that we should build vehicles where they are sold, so it makes sense to have suppliers close to your manufacturing operations," says Mike Goss, external affairs manager for Toyota's engineering and manufacturing division in North America.

Foreign production in the U.S., however, is not limited to the automotive industry. Just look at Cemex (nyse: CX - news - people ), one of the largest cement companies in the world and based in Monterrey, Mexico. Between its 14 cement plants, hundreds of ready-mix concrete plants and quarries, and distribution stations in the U.S., Cemex employs about 15,000 American workers.

In fact, almost 1 million Americans get their paychecks from Mexican companies, says Ton Heijmen, senior adviser for outsourcing and offshoring for the Conference Board.

In addition to locating production near consumption, other features of the U.S. economy influence foreign companies' decisions to bring operations into America. "They may take advantage of U.S. branding, of U.S. management and technique, or U.S. design knowledge," Spulber says.

In 2005, Chinese computer manufacturer Lenovo bought IBM's (nyse: IBM - news - people ) PC division for $1.27 billion. Lenovo's purchase was motivated by the benefits it could receive by accessing IBM's intellectual property in the design and production of top of the line PCs.

Haier, a Chinese appliance manufacturer, expanded to America in 1999 with similar intentions. In 2005, Haier made a bid to purchase Maytag, to be able to sell its own products under a well-known American brand name. However, it was beat out by Whirlpool (nyse: WHR - news - people )

Even Indian information-technology outsourcing companies are bringing operations to the U.S. Despite its far-flung location, Applabs, a large independent IT quality-assurance provider, has opened offices in Philadelphia and Lindon, Utah.

How could America's workforce be as appealing to outsourcers as India's? "Companies are already seeing in Bangalore, India, that there is such a tight labor market that their wages have gone up dramatically in the past couple of years," Heijmen says. A more expensive labor market, compounded by the relative weakness of the dollar, has made operating within the U.S. an increasingly attractive option for foreign companies.

To be sure, American companies continue to offshore all manner of duties to other nations around the world. But experts say its converse, foreign hiring of American workers, won't cease anytime soon.

"Just like American companies have located plants in other parts of the world where there is a big market for their products, so have foreign companies put plants in this country, because this country is still obviously one of the biggest markets in the world," Heijmen says.

So long as America remains one of the world's largest consumer markets and there are enough economic incentives to move production to the U.S., the flow of global employment will run both ways.

Courtesy - Jonathan Berke, Forbes

Customer Experience Manager a Hot Job Title

In October 2007, Gartner surveyed more than 250 business and IT leaders who influence the CRM strategies in their businesses in preparation for the 2008 CRM Summit. They told Gartner that their top three business issues revolved around creating a customer-centric enterprise, managing organizational and cultural change for CRM success, and managing and improving the customer experience.

The importance of focusing on the customer experience was further highlighted in all three award presentations as well as by the fact that all the presenters had this term in their job titles:

• At Fiat, Giorgio Cavalieri Is Senior Director Customer Experience

• At Philips, Arjan Burgers Is Director Consumer Experience Management and CRM

• At SBSA, Rolf Eichweber Is Director of Customer Experience

Courtesy - Dale Wolf, Perfect CEM