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JAMNALAL BAJAJ Institute of Management Studies
Issue – January 2011
..... 7 HOW THE GROWTH OF EMERGING MARKETS WILL STRAIN GLOBAL FINANCE............................edu Page 2 ............................... 7 PUTTING STRATEGIES TO THE TEST: MCKINSEY GLOBAL SURVEY RESULTS ..........................CONVOYAGE January ‘11 CONTENTS: AN ARTICLE: POWER OF THE CLOUD IN THE WORLD OF BUSINESS ...................................... 9 INCREASED LABOUR MOBILITY TO MEET DEMANDS FOR ECONOMIC GROWTH ........................14 CONSULTING FUN ....... 3 CONSULTANT TALKS ..................................................... 12 CROSS WORD ......................15 consultingclub@jbims...........................................................
So how does the User leverage this to his advantage? Well. Cloud computing is a mere extension of Software as a Service (SaaS). data. Vineet Inamdar 1st Year MMS. power costs.CONVOYAGE January ‘11 An Article: Power of the Cloud in the world of Business By this case the internet). servers and technical people to run. you need technology and to make the best use of the resources Think about the way you do business. Plus there are always problems with version upgrades.edu Page 3 . 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. To be in business. You might have the best technology available. But are you doing enough? Are you doing it the right way? When you need to start a business. 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. monitor and debug these applications. you need to have so many resources in your hand: Business applications like SAP or other ERP software. or technical issues which available with you. By this. Cloud Computing is a concept where the entire applications runs from a virtual cloud (In consultingclub@jbims. JBIMS and only pays for those applications which he wants. Welcome to the world of cloud computing. or technology becoming outdated. he simply logs in by providing a user name and a password. you have to leverage your IT costs where Cloud Computing helps you out. talented resources and might be highly successful. applications and computing power are all lodged at a remote location from the user. operational and set up costs which can be enormous. What does it have in store for the various firms across the globe?? needlessly frustrate you.
0 and other emerging technologies. small and medium enterprise firms. A classic example in this case is of Pixar Animation Studios. If the application has a fairly consistent load throughout the day. it then makes no sense to move it to the cloud. since no time is wasted for resource allocation or for set up. 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. But in cases of applications with high variations in the traffic. it is better to move the application since it will have better utilization. the only way to survive and make progress is by expenditure and operating costs. but the same is used by multiple clients (called tenants in this case). scalable consultingclub@jbims. It works on the concept of multi – tenancy where in a single software runs on a server. But for start-up. 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. The concept of cloud computing incorporates web infrastructure. 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.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. which . software as a service (SaaS).edu Page 4 management environment) because every frame of their movies takes eight hours to render today on a single processor. application. Also. reduction in capital architecture. Web 2.
they can get the job done as fast as they need. 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. But now.edu Page 5 . solutions and Coca-Cola Enterprises is the world’s largest marketer. With Azure. power usage and consumption. CEO and co-founder of Oracle while quoting some companies which boasted of providing ERP systems on the cloud. software licenses. producer and distributor of Coca-Cola products. particularly with its sales employees to deliver information to them in real time. said it was unclear on what could be hosted from the server. KPIT Cummins is an emerging leader in providing consulting. In order to fill up this messaging need and maintain contact with the employees. Negatives on Cloud Computing: While the entire concept of cloud computing has gathered steam in the past few months. the company migrated to a virtual environment and optimized the server space utilization. the company managed to get newer applications deployed and there was ample support for the software through multiple devices like mobile phones and computers. Some industry examples where companies have actually cut down on their IT costs drastically and become more optimally competitive: KPIT Cummins: Headquartered in Pune. and increasing the server utilization. India. By reducing the number of servers from 120 to 20. Traditional way of communication was via email to which sales employees had limited access. To handle issues like the increasing cost of hardware. The result is huge spikes in Pixar‘s usage of Azure as they render on-demand. it was possible for them to communicate with the company since services in the fields of finance. Larry Ellision. accounts and manufacturing. Coca Cola Enterprises: consultingclub@jbims. He said provision servers from several months to a few hours. effectively there was a need with to its communicate employees. there have been increasing criticisms on cloud computing.CONVOYAGE January ‘11 means it would take them about 272 years to render an entire movie.
everyone who uses it. References: www. Whether cloud computing showers itself upon the world or not. the biggest disadvantage is that of data security.com Another disadvantage is that they would provide you the same set of service to consultingclub@jbims. 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.edu Page 6 . Software as a Service has co. 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. 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 handled.existed with traditional software vendors for several years. cloud for computing small might be successful and medium enterprises. So even though you could customize it. it is always economical to have your own server (private cloud) and host applications rather than migrating your application to some third party vendor. But for traditional large scale organizations.microsoft.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. Also. only time will tell since there are too many constraints. 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. Also.
based on years of work with clients and academic research. advantage is an elusive goal. some seem content just to play along. 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. The remaining nine tests disaggregate the picture of a market- consultingclub@jbims. Competitive advantage is the essential ingredient of any strategy. In this survey. The first— whether the strategy will beat the market by creating competitive advantage—is comprehensive. the rest say their strategies are better beating strategy. meaning that our description of the test closely describes a particular element of their strategies. Yet for many companies. They may not be asking themselves the right questions. make for a good strategy. just playing along. 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. Nearly two-thirds of respondents indicate that their companies pass three or fewer of the ten tests. described as matching industry best practices and delivering operational imperatives—in other words. and what the implementation plan involves. the results underscore that companies can do much more to pressure-test their strategies.CONVOYAGE January ‘11 CONSULTANT TALKS Putting strategies to the test: McKinsey Global Survey results Creating a winning strategy is a struggle for most 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.edu Page 7 . And only 2 percent of respondents say their companies pass nine or all ten tests. While it’s certainly possible for a strategy to succeed at a company that fails all or even most of the tests. what level of insight the strategy rests on. assessing how the strategy positions the company in the market.
Taking the tests to the bottom line Whether executives say their companies pass a given test is likely. consultingclub@jbims. there is a rough correlation between passing a test and executives saying a test is instrumental to 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 sectors. this is the test the most companies pass. When executives assess the tests’ impact on financial performance. And as Exhibit 2 shows. more executives select flexibility to make choices in the future than any other test. For example. stress the importance of management having a strong belief in the strategy’s underlying assumptions. to be partly related to whether they think it matters. Executives in the energy industry. are likelier than all others to say a focus on trends has a good effect on their financial performance. meanwhile. for example. nearly half of them cite that test. of course. novel insight is the test rated least important to financial performance and passed least frequently. arise some among interesting differences industry sectors (Exhibit 4). the results underscore that companies can do much more to pressure-test their strategies.edu Page 8 . And indeed. Conversely. Executives in the health care and hightech sectors. when asked which three tests have the most positive effect on financial performance.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. with 46 percent saying so.
and financial institutions alike. These findings for have business important executives.8 trillion in cash holdings at the end of 2009. consultingclub@jbims. with real long-term interest rates languishing near 1. capital to invest could put upward pressure on real interest rates. machinery—may put unexpected strains on the global financial system. the world’s corporations would seem to be in a strong position to grow as the global economy recovers.edu Page 9 . and they have access to cheap capital. government policy makers. water and power systems.5 percent. Indeed. and other kinds of public infrastructure—and the many companies building new plants and buying potentially act as a drag on growth. could put upward pressure on interest rates and crowd out some investment. implications investors. The McKinsey Global Institute’s (MGI) recent analysis finds that by 2030. with $3. Indeed. They enjoy healthy cash capital. China’s efforts to rebalance its economy toward increased consumption will reduce global saving as well. as patterns of global saving and investment shift. and an aging population seems unlikely to reverse that trend. capital flows between countries will likely change course. The gap between the world’s supply of. crowd out some investment. Short-term doldrums aside. its willingness to save—will fall short of its demand for requiring new channels of financial intermediation and policy intervention. the prognosis for companies that can tap into that growth over the next decade looks promising. household saving rates have generally declined in mature economies for nearly three decades. ports. Yet all those new roads. and demand for. Moreover.CONVOYAGE January ‘11 How the growth of emerging markets will strain global finance Surging demand for capital. the world’s supply of capital—that is. led by developing economies. or the desired level of investment needed to finance all those projects. as developing economies continue to pick up the pace of urbanization. and balances.
consultingclub@jbims. and housing. We are now at the beginning of another investment boom. Across Africa. factories. the demand for new homes. and Latin America. hospitals. and shopping centres has already caused investment to jump. schools. Asia. this time fueled by rapid growth in emerging markets. water systems. offices. transport systems. factories.8 percent of GDP in 2002 to 23.edu Page 10 . our analysis suggests that high investment rates could continue for decades. The global investment rate increased from a recent low of 20.CONVOYAGE January ‘11 Surging demand for capital Several economic periods in history have required massive investment in physical assets such as infrastructure. These eras include the industrial revolution and the post–World War II reconstruction of Europe and Japan. Considering the very low levels of physical-capital stock these economies have accumulated. 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.7 percent in 2008 but then dipped again during the global recession of 2009.
The gap exists in all categories of infrastructure but is particularly large in transportation (for instance. When mature economies invest.edu Page 11 . and railways). airports. roads. When we examine alternative growth demand of about $4 trillion in infrastructure and $5 trillion in residential real estate in 2030. respectively. and people make home improvements. Consider the fact that emerging economies already invest in infrastructure at a rate more than two times higher than that of mature economies (5. though less so in the event of slower global GDP growth. we project that global investment demand could exceed 25 percent of GDP by 2030. scenarios. To support growth in line with the forecasters’ consensus. if the global economy grows in line with the consensus of forecasters. we find that investment will still increase from current levels.7 percent of GDP versus 2. But the coming investment boom will involve relatively more investment in infrastructure and residential real estate. We project global investment consultingclub@jbims. The mix of global investment will shift as emerging-market economies grow. global investment will amount to $24 trillion in 2030.CONVOYAGE January ‘11 In several scenarios of economic growth. in 2008). they are largely upgrading their capital stock: factories replace old machinery with more efficient equipment. followed by power and water systems.8 percent. compared with about $11 trillion in 2008.
In Canada. and demographic changes in the Northern Hemisphere. compared with 4. The roots of the global talent risk include the widely uneven quality of educational systems. and communications industries in developing nations. Germany. foreign-born workers with university degrees or equivalent qualifications make up just 2 percent of the European labor market. exceeding 4 percent across all countries sampled. expected immigration and birth rates will not offset the workforce losses caused by aging populations. Today. transportation. the United particularly high demand in the trade. erratic employability of the workers in the Southern Hemisphere. Kingdom. • Demand will be biggest for highly educated professionals. where retirement of the baby boomers will result in an unprecedented talent deficit. particularly in knowledge-based economies.” said Hans-Paul Bürkner. talent scarcity will become a threat to sustained growth. and the United States. and managers.edu Page 12 .) • Health care research and development alone will generate enormous demand for skilled labor worldwide. Professionals will be in BCG’s president and chief executive officer. (Labor-demand growth rates are compounded annually.5 percent in the United States and nearly 10 percent in Canada. Improved consultingclub@jbims. demand for professionals in manufacturing will peak at more than 10 percent in developing countries. “Human capital has replaced financial capital as the engine of economic prosperity. • Employees without critical knowledge and technical skills will be left behind.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. technicians. • In the next two decades.
head of partnership. and practitioners. consultingclub@jbims. The scale of the predicted talent gap requires concerted action. The World Economic Forum Annual Meeting 2011 in Davos-Klosters will seek to catalyze a pragmatic. The report proposes seven core responses to global talent risk: • Introduce strategic workforce planning to address imbalances between labor supply and demand. recommendations in the report and to the talent mobility dialogue hosted by the World Economic Forum online and at meetings in Brussels. Dubai. World Economic Forum. • Increase employability by advancing hand with increased labor migration.” said Piers A. Doha. immigrants.edu Page 13 . Montreal. • Develop a talent “trellis” by focusing on horizontal and vertical career and education paths. • Ease migration to attract the right talent globally. • Encourage temporary and virtual mobility to access required skills easily. older professionals. as well as more than 100 high-level contributed experts to and the the disadvantaged. • Foster “brain circulation” to mitigate brain drain. senior director. result-driven action focused on effective sharing of good practices. Cumberlege. starting with—and going well beyond—removing barriers to the mobility of talent. Members of the Global Agenda Council on Skills and Talent Mobility. and New York in 2009 and 2010. New Delhi. Davos-Klosters.CONVOYAGE January ‘11 education and training must go hand in “The global problem is no longer a mere talent mismatch. technological literacy and cross-cultural learning skills. • Extend the pool by tapping women.
rate and efficiency of work 4. ask the bank to advance money 6. put money into a company or business 5. part of the capital of a company 8. legal agreement 16. neither cheque nor credit card 15. money lent 11. total sales of a company 17. where shares are bought and sold 9.CONVOYAGE January ‘11 CROSS WORD Business and Finance Across 1. money paid for a loan 10. amount of money spent 14. share of profits paid to shareholders Down 2. money paid to owner of copyright or patent 7. Names of the early three winners will be published in the next month edition of ConVoyage) consultingclub@jbims. promise to repair or replace 13. money returned (Note: Solve the crossword and mail the solution to consultingclub@jbims. amalgamation of two companies 14. wealth of person or business 12.edu Page 14 . proof of payment 3.edu.
edu Page 15 .CONVOYAGE January ‘11 CONSULTING FUN consultingclub@jbims.
+919987442845 Email id – firstname.lastname@example.org Saurabh Sonparote Cell.CONVOYAGE January ‘11 The Consulting Club -Enhancing Quality… Contact us.+919819292862 Email id .+919821708412 Email id .email@example.com Prasad Gholve Cell.firstname.lastname@example.org@jbims.+919920018159 Email id .email@example.com Parinita Jatkar Cell .+919769220527 Email id .edu Junior MembersMayank Goel Cell . Rahul Salvi Cell.edu Pramod Kanojia Cell .firstname.lastname@example.org Ekinath Khedekar Cell.email@example.com Page 16 .consultingclub@jbims.+919867798948 Email id .edu Senior MembersDr.edu Kush Tandon Cell .+919819539767 Email firstname.lastname@example.org consultingclub@jbims.+919867393620 Email id .