Thursday, January 31, 2008

Anish De


Q: Is gas price a matter of concern?

A: "The price of gas remains a key unknown at this time. In particular since gas is generally benchmarked to international gas prices, the international market dynamics will inevitably play a role in determining the price."

"Further, gas has multiple uses beyond power generation, in fertiliser production, industrial processes, petrochemicals, city gas, etc. Hence the power sector will have to compete with the other user sectors for gas supplies."

"International gas prices have witnessed considerable volatility in the recent past, and have a marked correlation with crude prices. The prices peaked in 2005-06, but have considerably softened since then, as evident from the prices recorded at Henry Hub, the key American gas market that is often used as reference."

"It is apparent that wide variations in prices can wreak havoc on the competitiveness of power supplies. Having said so, power is likely to become an anchor consumer for gas and the large offtake offered becomes the basis for infrastructure development – particularly pipelines.
Hence it is essential that gas users obtain a reasonable deal for themselves, including contracts with either fixed prices, or those operating within a narrow price band."

Anish De, Associate Director, Ernst & Young

In an e-mail interview.

Wednesday, January 30, 2008

Jeby Cherian


Q: On BSC in management reporting...

A: "The Balanced Scorecard was created to cure the issue of the dominance of financial measures. Further evolutions of the concept led to strategy mapping where the measures were linked to strategies. While the balanced Scorecard helped to monitor the execution of the strategy it did not drive a role based execution of strategy."

Jeby Cherian, Head - Global Business Solution Center, IBM India, Bangalore.

In an e-mail interview.

Tuesday, January 29, 2008

Is fitness a priority?


Q: Are our policies and tax laws in favour of wellness or fitness as a priority?

A: "No. They are not. In some developed nations, fitness centre membership is tax deductible. Other nations like the US are lobbying for it, and it comes from a mindset that the investment made in prevention for the individual or corporate is far more productive and cost effective than the medical expenses involved in the cure phase. Research has proven this beyond doubt."

Vivekanand Palani, MD, FitnessOne

In an e-mail interview.

ERP in action


Q: In what common applications is ERP running in the background without the consumer or the man on the street being aware of the same?

A: "ERP is running behind most of the organizations that use technology to automate the business process. It is also running behind many e-businesses that automate almost all the processes of order processing. Some of the companies that use ERP systems for making the business processes automated and efficient are Tata Steel (steel manufacturing), Mani Group (construction), Tata Motors, Bajaj Auto, Mahindra, Mercedes Benz (automotive), Amazon.com (on-line bookstore). HDFC Bank, ING Vysya Bank, UTI Bank, Union Bank of India (banking), Hutchison Telecom (telecommunications), Zandu Pharmaceuticals (healthcare), Aviva Life Insurance, Birla Sun Life (insurance), Tata Consultancy Services, (IT), Titan Watches, BPL-Sanyo (manufacturing), HPCL (petrochemical), Pantaloon, HomeCare (retail), etc."

Alexis Leon, author of 'ERP Demystified' (http://www.tatamcgrawhill.com/)

In an e-mail interview.

Sunday, January 27, 2008

Cost audit

“Cost accounting, through the determination and allocation of costs to various products, provides a valuable service to the managements of companies in cost analysis and control. In this way, it can help to improve efficiency in the use of materials, labour and plant, maximise production and realise greater profits. At the same time, cost analysis furnishes useful information in respect of such important matters as gross margin, differential costs, replacement costs, etc. Cost analysis can be useful to the Regulators of public utilities and provide a basis for comparing claims and assessing the validity of issues arising out of international trade.”

From a recent order of the Ministry of Corporate Affairs constituting an Expert Group to review the existing Cost Accounting Standards and Cost Audit Report Rules

Preeti Malhotra


"In our mission to make our members corporate governance specialists, we launched this year a unique post-membership qualification course in corporate governance. The course has an open-ended syllabus. The course contents are as per the standards of international institutions teaching corporate governance."

Preeti Malhotra, former president of the ICSI

In an e-mail interview.

Sanjay Nigam on the Nano impact


"C segment cars may get indirectly affected because Nano would cause a slowdown in the used car market. Reason: The higher segment cars sell by exchange of the existing cars of owners. If the used cars cannot be sold then the sales of C segment cars will get impacted."

Sanjay Nigam, Director (Automotive Business, India), Trilogy Inc.

In an e-mail interview.

Sunday, January 20, 2008

Seven issues in Basel compliance


Q: How does 2008 look like for banks in the Basel context?

A: “I’d say, from a Basel compliance point of view, that in 2008 the following seven issues will become ever more important and if done right will help to future-proof and shape risk approaches in times to come.”

“First, data cleanup. This will be the sine qua non. Maybe it’s not glamorous, but its importance will be recognised and greater efforts will be applied to ensure data health. There will also be greater attention to data planning to ensure meeting of evolving compliance requirements…”

Saloni P. Ramakrishna, Principal Architect (Risk & Compliance Solutions) & Head (Business Development), Reveleus and Mantas, Japan & Asia Pacific, i-flex Solutions

In an e-mail interview

Monday, January 14, 2008

Satyajit Das



Q: Are there trends in Indian financial markets that worry you?

A: "Share prices in India are reminiscent of the surreal valuations of the dot.com and (earlier) Japanese equity bubbles. The quality and performance of recent initial public offerings have been variable and (in some cases) poor. Earnings growth has increasingly been driven by investment income – stock market, currency and property speculation. There is a nagging suspicion that prices are prone to being influenced by insiders and their associates."

Satyajit Das, author of 'Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives' (2006, FT-Prentice Hall)

In an e-mail interview.

Friday, January 11, 2008

A Year Without 'Made in China'


Q: Somehow this whole issue about the Chinese usurping manufacturing jobs being talked about now seeks of hypocrisy. It urges you into drawing a parallel with the way many Americans grapple with credit card debt. Keep shopping until the outstanding grows to a point where it becomes unmanageable. Solution-dump the credit card. Your comment.

A: "Well said -- one of the things I came to realize as we boycotted China was just how much consumerism is at the center of our daily lives -- and one of the unintended impacts for us was that we simply do not buy as much as we used to. Imports from nations with lower labor costs make it easier to consume, and considering the conditions under which many of those items are made that's certainly troubling. Certainly having access to less expensive goods makes it tempting to spend more, including on things that are not essential, and yet for many low-income Americans those less expensive, often good quality, good are also important. Again, this falls outside the focus of the book, so not sure how valuable my opinions are on this."

Sara Bongiorni, author of "A Year Without 'Made in China'" (http://www.wiley.com/)

In an e-mail interview.

Tax dialogue between the OECD and India


Q: What are the taxation issues that the OECD is currently discussing with the Indian Government? Also, a historical background of the discussions.

A: "The tax dialogue between the OECD and India is primarily focused on international tax issues. There are also some discussions on improving tax administration. Whilst before 2002, OECD officials met a few times with Indian tax officials and India participated in some OECD tax meetings, co-operation really picked up in 2002, when the OECD began assisting India in training high-level Indian tax officials at their training academy."

Mr Jacques Sasseville who heads the Tax Treaty Unit, Centre for Tax Policy and Administration, at the OECD (Organisation for Economic Co-operation and Development)

In an e-mail interview.

Wednesday, January 09, 2008

Intense action in the Indian auto space


Q: Do you expect shifts in the industry trends, closer home?

A: "Of all the segments in the Indian auto space, the passenger vehicle segment will probably witness the most intense market action with the introduction of nearly two-dozen new models and variants."

"The entry-level segment will be redefined owing to the introduction of a car priced under $3,000 this week. Several first-time buyers will graduate from the two-wheeler market to this base segment."

Kapil Arora, partner, automotive services, Ernst & Young

In an e-mail interview.

Competitiveness of the auto industry has to be viewed holistically


Q: Do FTAs weigh down on the indigenous industry? Again, with a falling dollar, should we be thinking of reversing import substitution drives?

A: "Not necessarily. I believe the dollar exchange correction is here to stay and one should accept it as a compliment to the overall growth and strength of the Indian economic environment. Competitiveness of the industry has to be viewed holistically within the environment. That would mean aspects such as foreign exchange, innovation , products etc play a big role. An import substitution drive is akin to a crutch given the circumstances. "

Yezdi Nagporewalla, KPMG

In an e-mail interview.

Cost management by Japanese automakers


Q: It is well known that Japanese automakers have achieved high cost efficiencies. Does that make any incremental gain from cost management too insignificant to pursue? Meaning, is there still a role for cost management, because the maximum cost efficiency has already been reached?

A: "Global competitors are getting more competitive, so cost efficiency should be very necessary for Japanese automakers.There cannot be a lowering of speed on cost management process and the Japanese companies will be always on the treadmill. In fact companies like Toyota still continue to save significant resources through cost down initiatives."

Hiroshi Okano, Graduate School of Business, Osaka City University, Japan

In an e-mail interview.

Tuesday, January 08, 2008

Tyler Cowen


Q: Do people really need to know that money can't buy them everything?

A: "Some people get addicted to money, and they work harder and harder, but toward what end? This is especially a problem in the United States, where the workaholic ethic is very common. Pride in one's work makes one happy. But beyond a certain point, just having more money doesn't much contribute to happiness. "

Tyler Cowen, author of 'Discover Your Inner Economist'

In an e-mail interview.

David Leavitt


Q: Did you have to factor in Indian sensibilities when writing The Indian Clerk? Any examples.

A: "As a non-Indian, I didn't feel that I had the authority to tell thestory from Ramanujan's point of view. This was why I chose to tell mostof it from Hardy's point of view--to explore Indian sensibility throughthe perspective of westerners. In fact there are only two short chapters in the novel that are told from Ramanujan's point of view."

David Leavitt, author of 'The Indian Clerk'

In an e-mail interview.

Monday, January 07, 2008

Is logistics a knowledge problem, or vice versa?


Q: Is knowledge a logistics problem or logistics a knowledge problem?

A: "When we define Knowledge as developed by a body of experts and standardized according to some rules, global standards and procedures, we see it as a Whole. In this sense, it can be called as 'The knowledge' or knowledge with a capital K. So, Logistics is a Knowledge problem—a problem of the individuals knowing/not knowing how to do a certain thing. However, it is not necessary for an individual to possess this kind of knowledge as he/she may acquire it over time or learn to do it their own way..."
"In so much as the whole is much greater than the sum of its parts, getting access to the disaggregated pieces of knowledge that form the whole; is more important than getting access to an organized set of knowledge. Hence, one may conclude that Knowledge is a Logistics problem more than Logistics, a Knowledge problem."

Madhuri Saripalle (AGM), Knowledge Management, TVS Logistics Services, Chennai

In an e-mail interview.

Offshore outsourcing


Q: How hot is offshore outsourcing in the US?

A: "It is noteworthy that so far in the current U.S. presidential campaign, while the issue of immigration is receiving much attention among the candidates, the sub-issues of offshore outsourcing and the use of visas for highly-skilled workers have received very little attention. While an economic downturn could change the climate for offshoring, so far the issue has been less controversial than in the past presidential election cycle."

Marc Hebert, Chief Marketing Officer, Virtusa Corporation

In an e-mail interview.

Skill shortages


Q: What are the skills that are the most apt for your kind of work? Are there any shortages?

A: "Data capture and manipulation is simple now as plenty of skill is available in this area. However, a new requirement is shaping as a crying need not only for ‘content transformation’ but for the entire IT & BPO industry as such. There is need to induct a huge dose of ‘creativity’ and ‘analytical mind’ into the industry – ‘value creation’ is a ‘research job’."

Pradeep Nevatia, President and CEO, Ninestars Information Technology Ltd

In an e-mail interview.

Friday, January 04, 2008

Rural potential


Q: As for the rural market, do you see an untapped potential, where taking ACK Media's characters through the vernacular media will give you an as-yet unexplored market?

A: "Yes we see a big potential in rural and regional markets, for example through syndication via newspapers. We have more than 200+ titles in eight languages. There is also potential for low cost titles."

Samir Patil, CEO & co-Founder of ACK Media

In an e-mail interview.

How to make cities more environmentally friendly?


Q: Is it possible to make cities more environmentally friendly on a sustainable basis?

A: "Yes, but it also possible to make cities less environmentally friendly and the last two centuries have generally pushed us in that direction. But because cities are centers of innovation and ideas, it is likely that the solutions to sustainability will be found there first."

"If we can use resources more efficiently, reduce the production of non-reusable waste, and improve the quality of life for people, those goals will move cities towards more sustainable practices."

"We must also find ways to ensure intra- and inter-generational equity along with inter-species equity, not only to work towards justice, but also to ensure that the natural and human systems that future generations and we will rely on are not jeopardized."

Christopher G. Bonne & Ali Modarres, authors of 'City and Environment' (http://www.pearsoned.co.in/)

In an e-mail interview.

Newer applications of NDT


Q: Where is NDT (non-destructive testing) finding newer applications?

A: "The traditional users of NDT include the production/ maintenance departments of large -
* Energy utilities (thermal, nuclear power plants)
* Transportation industry (railways, aviation)
* Manufacturing companies (product - automobile, process – fertiliser)
* Oil & gas (pipelines, oil rigs)."

"There are a host of new areas where NDT techniques are being applied. Some of these include Homeland Security, structural health monitoring of infrastructure and other key assets, solar cell manufacturing etc."

"While all of NDT is targeted at safety and quality, there are some applications that are of very great importance to a country like India. These are in areas such as monitoring of dams and detection of mines. Applications of NDT in wood and paintings enable people to preserve and care for their cultural heritage."

C.P. Madhusudan, Sales Director, Lucid Software Ltd

In an e-mail interview.

Systems thinking required

Q: Does our IT education system have to be modified to cater to software quality needs?

A: "Having integrated Peter Senge’s seminal work on The Fifth Discipline into my understanding of process management, most issues are complex systemic issues that deal with dynamic complexity."

"To address them effectively, one needs to have systems thinking – the Fifth Discipline – instead of linear thinking. This shift requires a holistic approach to improving all aspects that bear upon the final determinant – good quality software."

"This includes improving the basic education system with a curriculum that is kept current and fresh catering to the needs of one of India’s cash-cows – the IT industry."

"I would not be surprised if the current software engineering curriculum of most universities would not even make a foot-note reference to the CMMI or the People CMM! Yet, a well grounded understanding of articulating process models and an integration of such practices to a competency framework is what the IT industry needs."

Raghav S. Nandyal, author of 'Making Sense of Software Quality Assurance' (http://www.tatamcgrawhill.com/)

In an e-mail interview.

Dollar turmoil made us innovate and stay competitive

Q: Rupee impact and response?

A: "Dollar drop? We are at a gain!"

"The recent dollar turmoil made us innovate and stay competitive. We have ventured into near-shore. We have made strategic investments in the Philippines and Kenya. We managed to cut cost by 30%. This way, dollar crisis helped us gain some profits and great global delivery leveraging with near-shore facilities."

S. Shivakumar, CEO, iSource I.T. Enabled Services Pvt Ltd (http://www.transcriptionstar.com/)

In an e-mail interview.

Consulting forays by IT companies

Q: The bigwigs of the Indian IT industry, knowledge-based sector, who essentially started with outsourcing, now are increasingly looking to don the role of consultants. How easy is for manufacturing counterparts to repeat the same?

A: "Becoming a consultant requires a set of competences and a sustaining culture that have to be developed over time. In our chapter 6, we discuss how to do this and examples of companies that have achieved it. My rule of thumb is that it is a minimum 5 year change process and unlikely to be sustained without strong top down leadership."

Nirmalya Kumar, co-author of 'Value Merchants' (http://www.tatamcgrawhill.com/)

In an e-mail interview.

Where are machine tools making a great difference?

Q: What are the industries in which machine tools are making a great difference - in terms of revenues, quality etc.?

A: "In industries like aircraft, aerospace, automotive, defence, construction, power plant, nuclear, steel etc, machine tools make a real big difference by delivering manufacturing perfection, cost competitiveness and profitability."

"Even a small company which realises this and invests in state of the art machine technology gets immensely benefited by creating high revenue niche markets for its products."

A.P. Jayanthram, Vice President Regional Operations, Empire Industries Ltd, Chennai

In an e-mail interview.

Thursday, January 03, 2008

Work-life balance

Q: What are the symptoms of a life out of balance?

A: "Each one of us has a different tolerance level-yet nature provides a defence mechanism for every individual."

"As things start going wrong our body, heart and soul tell us about the impending disaster. Problem starts when we ignore these natural alerts. We wait for the crisis to happen. We are running so fast that we have no time to wait and think."

"Anxiety, sleeping disorder, depression, emotional disconnect, self centred attitude, anger, irritation etc. all start very gradually. These are the innocent telltale marks of life going in the wrong direction."

Virender Kapoor, author of 'My Honeymoon with a Pinch of Salt'

In an e-mail interview.

REITs and taxation

Q: What is the argument for making REITs pass through for tax purposes?
A: "India has a progressive basis of taxation for individuals – you pay a tax at a rate based on your applicable slab. If tax were to be imposed at the level of the REIT, at say 30 plus surcharge and cess, the returns to a marginal investor or a pensioner who is at a lower bracket would be unfairly impaired."

"This would defeat the very basic underlying philosophy behind REITs which is to enable retail investors take small positions in a professionally managed portfolio of assets and share the returns – something they could not do directly."

Jai Mavani, Executive Director, KPMG India Pvt Ltd.

In an e-mail interview.

Cost management in software companies

"Operating from India continues to be economical as the cost of delivery is much lower. A gradual rupee appreciation, say 2-3 per cent per annum is manageable but a steep rise like what we saw recently, around 15 per cent in a short span of 5 to 6 months, would throw up a big challenge."

"But in spite of these steep movements IT companies have shown a lot of resilience. For example, in the case of Satyam, while the adverse impact on operating margins due to appreciation could be about 420 basis points (bps), we are planning to curtail its impact to around 175 bps for the financial year 2008 by adopting various innovative ‘revenue enhancement and cost optimisation’ initiatives."

V. Srinivas, Chief Financial Officer, Satyam Computer Services Limited

In an e-mail interview

On Tata's 'one lakh car'


“The ‘one lakh car’ could do for rural Indians what Henry Ford’s Model T did for early-twentieth-century Americans or Andre Citroen’s 2CV did for French farmers impoverished after World War II,” foresees a recent book by Iain Carson and Vijay V. Vaitheeswaran.


“Ratan Tata’s original dream was that this car would make budding entrepreneurs of tens of thousands of Indian mechanics in small towns and villages across the subcontinent, as they would assemble the cars from kits stamped out in a Tata factory in West Bengal,” they write in Zoom: The global race to fuel the car of the future (October 2007). “Now he accepts this will happen in a later phase.”