January ‘11

JAMNALAL BAJAJ Institute of Management Studies

Issue – January 2011

Page 1

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

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 or technology becoming outdated.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

But for start-up.0 and other emerging technologies. 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. scalable consultingclub@jbims.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. A classic example in this case is of Pixar Animation Studios. application. the only way to survive and make progress is by expenditure and operating Page 4 management environment) because every frame of their movies takes eight hours to render today on a single processor. 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. 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. since no time is wasted for resource allocation or for set up. Web 2. it then makes no sense to move it to the cloud. Also. The concept of cloud computing incorporates web infrastructure. small and medium enterprise firms. reduction in capital architecture. but the same is used by multiple clients (called tenants in this case). It works on the concept of multi – tenancy where in a single software runs on a server. it is better to move the application since it will have better utilization. which . software as a service (SaaS). If the application has a fairly consistent load throughout the day. 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. But in cases of applications with high variations in the traffic.

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

only time will tell since there are too many constraints. cloud for computing small might be successful and medium 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. References: www. 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 Another disadvantage is that they would provide you the same set of service to consultingclub@jbims. Also. But for traditional large scale organizations. it is always economical to have your own server (private cloud) and host applications rather than migrating your application to some third party vendor. So even though you could customize it. 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. Whether cloud computing showers itself upon the world or not. everyone who uses 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. primarily of security to be handled. Also. Software as a Service has co. the biggest disadvantage is that of data Page 6 . 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.existed with traditional software vendors for several years.

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

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

Indeed. its willingness to save—will fall short of its demand for requiring new channels of financial intermediation and policy intervention. with real long-term interest rates languishing near 1.8 trillion in cash holdings at the end of 2009. as patterns of global saving and investment shift. could put upward pressure on interest rates and crowd out some investment. the world’s supply of capital—that is. the prognosis for companies that can tap into that growth over the next decade looks promising. the world’s corporations would seem to be in a strong position to grow as the global economy recovers. and they have access to cheap capital. capital to invest could put upward pressure on real interest rates. The gap between the world’s supply of. The McKinsey Global Institute’s (MGI) recent analysis finds that by 2030. led by developing economies. with $3. water and power systems. or the desired level of investment needed to finance all those projects. consultingclub@jbims. China’s efforts to rebalance its economy toward increased consumption will reduce global saving as well. ports. and balances. machinery—may put unexpected strains on the global financial system. Moreover. Short-term doldrums aside. and an aging population seems unlikely to reverse that trend. These findings for have business important executives. implications investors.5 percent. household saving rates have generally declined in mature economies for nearly three decades. Indeed. government policy Page 9 . capital flows between countries will likely change course. and demand for. as developing economies continue to pick up the pace of urbanization. and financial institutions alike. and other kinds of public infrastructure—and the many companies building new plants and buying potentially act as a drag on growth. Yet all those new roads. They enjoy healthy cash capital.CONVOYAGE January ‘11 How the growth of emerging markets will strain global finance Surging demand for capital. crowd out some investment.

and housing.CONVOYAGE January ‘11 Surging demand for capital Several economic periods in history have required massive investment in physical assets such as infrastructure. water systems. this time fueled by rapid growth in emerging markets. schools. transport systems. factories. offices. the demand for new homes. Across Africa.8 percent of GDP in 2002 to 23. factories. Asia. These eras include the industrial revolution and the post–World War II reconstruction of Europe and Page 10 . consultingclub@jbims. hospitals. 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. Considering the very low levels of physical-capital stock these economies have accumulated.7 percent in 2008 but then dipped again during the global recession of 2009. and shopping centres has already caused investment to jump. We are now at the beginning of another investment boom. and Latin America. our analysis suggests that high investment rates could continue for decades. The global investment rate increased from a recent low of 20.

in 2008). We project global investment consultingclub@jbims.CONVOYAGE January ‘11 In several scenarios of economic growth. scenarios. airports. we find that investment will still increase from current levels. followed by power and water systems. though less so in the event of slower global GDP growth. roads.8 Page 11 . The gap exists in all categories of infrastructure but is particularly large in transportation (for instance. Consider the fact that emerging economies already invest in infrastructure at a rate more than two times higher than that of mature economies (5. When mature economies invest. The mix of global investment will shift as emerging-market economies grow. To support growth in line with the forecasters’ consensus. we project that global investment demand could exceed 25 percent of GDP by 2030. compared with about $11 trillion in 2008. they are largely upgrading their capital stock: factories replace old machinery with more efficient equipment. global investment will amount to $24 trillion in 2030.7 percent of GDP versus 2. But the coming investment boom will involve relatively more investment in infrastructure and residential real estate. if the global economy grows in line with the consensus of forecasters. and people make home improvements. When we examine alternative growth demand of about $4 trillion in infrastructure and $5 trillion in residential real estate in 2030. respectively. and railways).

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

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

edu Page 14 . share of profits paid to shareholders Down 2. amalgamation of two companies 14. promise to repair or replace 13. Names of the early three winners will be published in the next month edition of ConVoyage) consultingclub@jbims. proof of payment 3. ask the bank to advance money 6. wealth of person or business 12.CONVOYAGE January ‘11 CROSS WORD Business and Finance Across money returned (Note: Solve the crossword and mail the solution to consultingclub@jbims. money lent 11. where shares are bought and sold 9. amount of money spent 14. neither cheque nor credit card 15. money paid for a loan 10. rate and efficiency of work 4. legal agreement 16. total sales of a company 17. money paid to owner of copyright or patent 7. put money into a company or business 5. part of the capital of a company 8.


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

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