January ‘11

JAMNALAL BAJAJ Institute of Management Studies

Issue – January 2011

Page 1

..............................15 consultingclub@jbims..................................................... 9 INCREASED LABOUR MOBILITY TO MEET DEMANDS FOR ECONOMIC GROWTH ....14 CONSULTING FUN ... 7 PUTTING STRATEGIES TO THE TEST: MCKINSEY GLOBAL SURVEY RESULTS Page 2 ........... 7 HOW THE GROWTH OF EMERGING MARKETS WILL STRAIN GLOBAL FINANCE.......... 12 CROSS WORD .CONVOYAGE January ‘11 CONTENTS: AN ARTICLE: POWER OF THE CLOUD IN THE WORLD OF BUSINESS ...................................................... 3 CONSULTANT TALKS ....................................

you have to leverage your IT costs where Cloud Computing helps you out. Welcome to the world of cloud computing. To be in business. Vineet Inamdar 1st Year MMS. JBIMS and only pays for those applications which he wants. Cloud computing is a mere extension of Software as a Service (SaaS). It is similar to a building where every office in a building uses the same infrastructure and basic facilities available but still has the capability to customize its own office space. By this. operational and set up costs which can be enormous. you need technology and to make the best use of the resources Think about the way you do business. So how does the User leverage this to his advantage? Well. data. monitor and debug these applications. But are you doing enough? Are you doing it the right way? When you need to start a business.CONVOYAGE January ‘11 An Article: Power of the Cloud in the world of Business By this case the internet). applications and computing power are all lodged at a remote location from the user. What does it have in store for the various firms across the globe?? needlessly frustrate Page 3 . he simply logs in by providing a user name and a password. or technical issues which available with you. or technology becoming outdated. servers and technical people to run. power costs. It can also be called as a Utility computing similar to utility services like Electricity and Water where you pay only for what you use. Cloud Computing is a concept where the entire applications runs from a virtual cloud (In consultingclub@jbims. talented resources and might be highly successful. Plus there are always problems with version upgrades. you need to have so many resources in your hand: Business applications like SAP or other ERP software. You might have the best technology available.

What would decide whether you should move your application(s) over the cloud or not?? It depends on how fair is your usage of the data and the application. reduction in capital architecture. the only way to survive and make progress is by expenditure and operating costs. It works on the concept of multi – tenancy where in a single software runs on a Page 4 management environment) because every frame of their movies takes eight hours to render today on a single processor.CONVOYAGE January ‘11 Traditionally bigger firms have deep pockets to buy the latest technology and use the traditional client server since the number of users can grow but everyone shares only one single instance of the software. software as a service (SaaS). Web 2. A classic example in this case is of Pixar Animation Studios.0 and other emerging technologies. scalable consultingclub@jbims. But for start-up. application. it then makes no sense to move it to the cloud. but the same is used by multiple clients (called tenants in this case). The concept of cloud computing incorporates web infrastructure. which runs its computer-animation rendering process on Windows Azure (A cloud computing or cloud services operating system for the development service hosting and service The advantages of Cloud Computing is that it gives the organization a very rapid start up. small and medium enterprise firms. How does cloud computing work? Cloud computing is Internet based system development in which large scalable computing resources are provided “as a service” over the Internet to users. it is better to move the application since it will have better utilization. since no time is wasted for resource allocation or for set up. you pay the same amount of money when you move to the cloud and in fact enjoy the advantage of a higher processing power in the form of several shared multiple servers working on your embracing cheap but effective technology. Also. But in cases of applications with high variations in the traffic. which . If the application has a fairly consistent load throughout the day.

Negatives on Cloud Computing: While the entire concept of cloud computing has gathered steam in the past few months. the company managed to get newer applications deployed and there was ample support for the software through multiple devices like mobile phones and Page 5 . India. By reducing the number of servers from 120 to 20.CONVOYAGE January ‘11 means it would take them about 272 years to render an entire movie. Some industry examples where companies have actually cut down on their IT costs drastically and become more optimally competitive: KPIT Cummins: Headquartered in Pune. To handle issues like the increasing cost of hardware. With Azure. Larry Ellision. But now. and increasing the server utilization. effectively there was a need with to its communicate employees. producer and distributor of Coca-Cola products. Coca Cola Enterprises: consultingclub@jbims. solutions and Coca-Cola Enterprises is the world’s largest marketer. it was possible for them to communicate with the company since services in the fields of finance. software licenses. they can get the job done as fast as they need. there have been increasing criticisms on cloud computing. KPIT Cummins is an emerging leader in providing consulting. CEO and co-founder of Oracle while quoting some companies which boasted of providing ERP systems on the cloud. The result is huge spikes in Pixar‘s usage of Azure as they render on-demand. Traditional way of communication was via email to which sales employees had limited access. particularly with its sales employees to deliver information to them in real time. the company migrated to a virtual environment and optimized the server space utilization. In order to grow against heavy competition and a complex environment. accounts and manufacturing. In order to fill up this messaging need and maintain contact with the employees. said it was unclear on what could be hosted from the server. He said provision servers from several months to a few hours. power usage and consumption. they migrated to Microsoft online services where the software and data were hosted online with real time support.

it is always economical to have your own server (private cloud) and host applications rather than migrating your application to some third party vendor. only time will tell since there are too many constraints. the biggest disadvantage is that of data security. everyone who uses it. It is true today that all organizations providing cloud computing services have to comply with several security standards but instances of data breach are not uncommon. But for traditional large scale organizations. Another disadvantage is that they would provide you the same set of service to consultingclub@jbims. But it is definitely a new concept in the use of IT which gives a method to companies to be more cost effective in terms of the technology usage. the logic still remains the same: Same set of services to offer from a host of services from which you need to select which service you require. primarily of security to be Page 6 .existed with traditional software vendors for several years. So even though you could customize it.CONVOYAGE January ‘11 that the entire issue of ‘cloud’ which is a new name for coined for the ‘hosting from the internet or over the network’ is in fact over blown and has always existed in the past. References: www. Software as a Service has co. cloud for computing small might be successful and medium enterprises. Whether cloud computing showers itself upon the world or not. It would not be possible for an organization to deploy its highly sensitive data over a remote server which houses data and provides services to different users.

Nearly two-thirds of respondents indicate that their companies pass three or fewer of the ten tests. executives around the world answered a series of questions that allowed us to test how fully their companies’ business unit strategies pass ten tests that we believe. make for a good strategy. described as matching industry best practices and delivering operational imperatives—in other words. some seem content just to play along. the rest say their strategies are better beating strategy. In this survey. and what the implementation plan Page 7 . the results underscore that companies can do much more to pressure-test their strategies. The remaining nine tests disaggregate the picture of a market- consultingclub@jbims. what level of insight the strategy rests on. meaning that our description of the test closely describes a particular element of their strategies. The results of a recent McKinsey survey suggest one reason: just 53 percent of executives characterize their companies’ strategies as emphasizing the creation of relative advantage over competitors. Competitive advantage is the essential ingredient of any strategy. based on years of work with clients and academic research. And only 2 percent of respondents say their companies pass nine or all ten tests. Yet for many companies. just playing along. They may not be asking themselves the right questions. The first— whether the strategy will beat the market by creating competitive advantage—is comprehensive. While it’s certainly possible for a strategy to succeed at a company that fails all or even most of the tests.CONVOYAGE January ‘11 CONSULTANT TALKS Putting strategies to the test: McKinsey Global Survey results Creating a winning strategy is a struggle for most companies. advantage is an elusive goal. The results also suggest some ways that companies can prioritize improvements in their approach to strategy based on the tests respondents say contribute most to financial performance and are most frequently used in their sectors. assessing how the strategy positions the company in the market.

CONVOYAGE January ‘11 While it’s certainly possible for a strategy to succeed at a company that fails all or even most of the tests. For example. Executives in the health care and hightech sectors. more executives select flexibility to make choices in the future than any other test. The results also suggest some ways that companies can prioritize improvements in their approach to strategy based on the tests respondents say contribute most to financial performance and are most frequently used in their sectors. when asked which three tests have the most positive effect on financial performance. stress the importance of management having a strong belief in the strategy’s underlying assumptions. novel insight is the test rated least important to financial performance and passed least frequently. When executives assess the tests’ impact on financial performance. consultingclub@jbims. arise some among interesting differences industry sectors (Exhibit 4). And as Exhibit 2 shows. Taking the tests to the bottom line Whether executives say their companies pass a given test is likely. And Page 8 . to be partly related to whether they think it matters. the results underscore that companies can do much more to pressure-test their strategies. Executives in the energy industry. meanwhile. this is the test the most companies pass. are likelier than all others to say a focus on trends has a good effect on their financial performance. nearly half of them cite that test. of course. Conversely. for example. with 46 percent saying so. there is a rough correlation between passing a test and executives saying a test is instrumental to financial performance.

Indeed. Moreover. water and power systems. with real long-term interest rates languishing near 1. and an aging population seems unlikely to reverse that trend. led by developing economies.5 percent. capital to invest could put upward pressure on real interest rates. implications investors. its willingness to save—will fall short of its demand for requiring new channels of financial intermediation and policy intervention. The gap between the world’s supply of. and demand for. Yet all those new roads. the world’s supply of capital—that is.CONVOYAGE January ‘11 How the growth of emerging markets will strain global finance Surging demand for capital. household saving rates have generally declined in mature economies for nearly three decades. as patterns of global saving and investment shift. China’s efforts to rebalance its economy toward increased consumption will reduce global saving as well. consultingclub@jbims. could put upward pressure on interest rates and crowd out some investment. capital flows between countries will likely change course. and balances. Indeed. or the desired level of investment needed to finance all those projects.8 trillion in cash holdings at the end of 2009. and other kinds of public infrastructure—and the many companies building new plants and buying potentially act as a drag on growth. machinery—may put unexpected strains on the global financial system. and they have access to cheap capital. with $3. The McKinsey Global Institute’s (MGI) recent analysis finds that by 2030. and financial institutions alike. the prognosis for companies that can tap into that growth over the next decade looks promising. ports. crowd out some investment. These findings for have business important Page 9 . as developing economies continue to pick up the pace of urbanization. government policy makers. the world’s corporations would seem to be in a strong position to grow as the global economy recovers. They enjoy healthy cash capital. Short-term doldrums aside.

and Latin America. our analysis suggests that high investment rates could continue for decades. the demand for new homes. These eras include the industrial revolution and the post–World War II reconstruction of Europe and Japan. hospitals. water systems. factories. The increase from 2002 through 2008 resulted primarily from the very high investment rates in China and India but reflected higher rates in other emerging markets as well. transport systems. schools. Asia. We are now at the beginning of another investment boom.8 percent of GDP in 2002 to Page 10 . and shopping centres has already caused investment to jump.CONVOYAGE January ‘11 Surging demand for capital Several economic periods in history have required massive investment in physical assets such as infrastructure. and housing. offices. Considering the very low levels of physical-capital stock these economies have accumulated. factories. this time fueled by rapid growth in emerging markets. The global investment rate increased from a recent low of 20.7 percent in 2008 but then dipped again during the global recession of 2009. consultingclub@jbims. Across Africa.

edu Page 11 . if the global economy grows in line with the consensus of forecasters. and people make home improvements. global investment will amount to $24 trillion in 2030. respectively. airports. When we examine alternative growth demand of about $4 trillion in infrastructure and $5 trillion in residential real estate in 2030.CONVOYAGE January ‘11 In several scenarios of economic growth. scenarios. To support growth in line with the forecasters’ consensus. When mature economies invest. we find that investment will still increase from current levels. and railways). we project that global investment demand could exceed 25 percent of GDP by 2030.8 percent. though less so in the event of slower global GDP growth. followed by power and water systems. in 2008). they are largely upgrading their capital stock: factories replace old machinery with more efficient equipment. compared with about $11 trillion in 2008.7 percent of GDP versus 2. Consider the fact that emerging economies already invest in infrastructure at a rate more than two times higher than that of mature economies (5. The mix of global investment will shift as emerging-market economies grow. roads. The gap exists in all categories of infrastructure but is particularly large in transportation (for instance. But the coming investment boom will involve relatively more investment in infrastructure and residential real estate. We project global investment consultingclub@jbims.

” said Hans-Paul Bürkner. exceeding 4 percent across all countries sampled. and communications industries in developing nations. talent scarcity will become a threat to sustained growth. foreign-born workers with university degrees or equivalent qualifications make up just 2 percent of the European labor market. Improved consultingclub@jbims. and managers. Today. (Labor-demand growth rates are compounded annually. erratic employability of the workers in the Southern Hemisphere. Professionals will be in BCG’s president and chief executive officer.5 percent in the United States and nearly 10 percent in Canada. The roots of the global talent risk include the widely uneven quality of educational systems. Kingdom. • In the next two decades. technicians. and demographic changes in the Northern Page 12 .) • Health care research and development alone will generate enormous demand for skilled labor worldwide. and the United States. “Human capital has replaced financial capital as the engine of economic prosperity. the United particularly high demand in the trade. • Demand will be biggest for highly educated professionals. compared with 4. particularly in knowledge-based economies. In Canada. Germany. • Employees without critical knowledge and technical skills will be left behind. demand for professionals in manufacturing will peak at more than 10 percent in developing countries. transportation.CONVOYAGE January ‘11 Increased Labour Mobility to Meet Demands for Economic Growth Industries and countries worldwide will require major increases of highly educated people in their workforces to sustain economic growth If left unaddressed. expected immigration and birth rates will not offset the workforce losses caused by aging populations. where retirement of the baby boomers will result in an unprecedented talent deficit.

• Increase employability by advancing hand with increased labor migration. technological literacy and cross-cultural learning skills. immigrants. recommendations in the report and to the talent mobility dialogue hosted by the World Economic Forum online and at meetings in Brussels. Members of the Global Agenda Council on Skills and Talent Mobility. older professionals. Doha. World Economic Forum. The report proposes seven core responses to global talent risk: • Introduce strategic workforce planning to address imbalances between labor supply and demand. senior director. consultingclub@jbims. • Extend the pool by tapping women. Dubai. • Develop a talent “trellis” by focusing on horizontal and vertical career and education paths. The scale of the predicted talent gap requires concerted action. and New York in 2009 and 2010. The World Economic Forum Annual Meeting 2011 in Davos-Klosters will seek to catalyze a pragmatic. • Ease migration to attract the right talent globally. and practitioners. • Encourage temporary and virtual mobility to access required skills easily. Davos-Klosters.” said Piers Page 13 .CONVOYAGE January ‘11 education and training must go hand in “The global problem is no longer a mere talent mismatch. Montreal. • Foster “brain circulation” to mitigate brain drain. New Delhi. as well as more than 100 high-level contributed experts to and the the disadvantaged. result-driven action focused on effective sharing of good practices. starting with—and going well beyond—removing barriers to the mobility of talent. head of partnership. Cumberlege.

ask the bank to advance money 6. money paid for a loan 10. Names of the early three winners will be published in the next month edition of ConVoyage) consultingclub@jbims. amalgamation of two companies 14. proof of payment 3. promise to repair or replace 13. neither cheque nor credit card 15. money returned (Note: Solve the crossword and mail the solution to consultingclub@jbims. rate and efficiency of work 4. where shares are bought and sold 9.CONVOYAGE January ‘11 CROSS WORD Business and Finance Across 1. money paid to owner of copyright or patent 7. amount of money spent 14. part of the capital of a company 8. wealth of person or business Page 14 . put money into a company or business 5. total sales of a company 17. money lent 11. legal agreement 16. share of profits paid to shareholders Down 2.


Rahul Salvi Cell.mayankgoel12@jbims.CONVOYAGE January ‘11 The Consulting Club -Enhancing Quality… Contact us.+919867798948 Email id .edu Saurabh Sonparote Cell.+919867393620 Email id consultingclub@jbims.+919819539767 Email id-saurabhsonparote11@jbims.+919819292862 Email id .rahulsalvi11@jbims.+919821708412 Email id Ekinath Khedekar Cell.+919920018159 Email id .edu Junior MembersMayank Goel Cell .edu Page 16 .+919769220527 Email id .edu Parinita Jatkar Cell Pramod Kanojia Cell .edu Kush Tandon Cell .edu Prasad Gholve Cell.parinitajatkar12@jbims.+919987442845 Email id – Senior MembersDr.

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