Amit’s e-world

There’s so much common in how different companies are in terms in process efficiencies to how different countries are in creating and maintaining infrastructure, to how different people are in dealing with issues in day to day life. I have a friend who paid a visit few months back to my home I bought last year. He owns one as well for a long time. As a good friend, he advised me on a few tips on how to improve the energy efficiency of my home, by replacing the glass door, having a cavity wall insulation done etc. I listened in agreement, but haven’t done any of that. Mainly because, I had bigger issues to address i.e. change the central heating system, buying energy efficient appliances, etc. Clearly, we were at different stages of the maturity curve of house improvement.

Lets come to organisations now. Organisations are always solving problems and tackling issues to grow and maintain growth. Often there is whole gamut of problems that may be common for all organisations in a particular sector. However, the management of such problems may be very different. Some organisations may tackle problems that it deems are more important to itself. Again, these organisations are on different points of the maturity curve.

Lastly lets talk about countries. Whether it is building a nuclear arsenal, or cutting carbon emissions, some organisations are ahead in the curve in terms of self defence and industrialisation. Hence, these countries tend to take the lead on these initiatives, be it nuclear disarmament, or cutting carbon emissions. Not surprisingly, emerging economies resist this. It is always going to be a problem to materialise world initiatives because the priorities are so different for every country. Take infrastructure. FIIs investing or keen to invest in India having been crying for years together that India must focus on infrastructure, however in almost every budget, the Government of India capitulates, trying to address the immediate priorities of its masses.

So where do we go from here. Well, first, lets simply acknowledge that everyone has different priorities, and it is not inappropriate to have different priorities. Secondly, lets not be shy of expressing what your priorities are. India does so to its middle-class, reminding them of the 80% of Indians who live close to or below the poverty line. There seems to be some shyness in toe-ing the same kind of line with countries making demands on nuclear disarmament, or carbon emission cuts. Leads me on the third recommendation, lets understand that other countries have other burning priorities. This recommendation may specifically apply to countries who are perceived as world-leaders. When they make demands that other countries act prudently on world initiatives, their business case must address how the problems of the other countries could be addressed in alternate ways. Often, world leaders just talk about the drastic negative implications if their priorities are not acted upon: sometimes the drastic negative implication is natural, such as floods because Antartica would melt, sometimes the drastic negative implication is man-made, such as we will attack your installation if you continue to build arsenal. Is this the right way to run the world?

I am so frustrated with my Hero upgrade that I had to write this.I recently upgraded the firmware on my Hero, the day it was released, as I expected the new version of the radio to have better signal receptivity. While that problem has reduced slightly, I am completely dismayed with what I believe is a fundamental problem. I purchased a few applications before I had upgraded & I am unable to reinstall these because I can’t see them on the "Android market". This problem is not uncommon. Almost every Android phone, whatever be the make faces the same problem. Users simply have to wait for the companies to sort out the issue, so that the previously downloaded applications, can appear in the "My Downloads" section of the phone, from where they can be reinstalled. I have upgraded my firmware now 4 weeks back & still the solution is not in sight. Its now part of my morning duties to check if my old paid applications are ready for reinstallation.

It is a bit of a disgrace that a problem of this magnitude is being completely overlooked by three allegedly customer oriented organisations - HTC (Phone manufacturer), Orange (Network service provider) & Google (Maker / Owner of Android Market). Just checked on the Android Market home page, that there are many threads on the support forum on this subject, and amongst the most popular.

http://www.google.com/support/forum/p/Android+Market?utm_source=HC&utm_medium=leftnav&utm_campaign=androidmarket

However, the only information available on this problem is on user forums. If companies such as HTC, Google & Orange aren’t even courteous or bold enough to acknowledge the problem, I don’t think they deserve our custom. I am never going to recommend anyone this phone / nor the fad of going for an Android phone. I regret not having an I-Phone. You can at least hold Apple by the neck, if they cause such problems. All you get for supporting a free open source environment is capitalist companies creating problems for the user community.

The workaround to solving this problem is simply change the version number in the Build.Prop file in the phone to the older version number. I haven’t done this myself, because doing stuff that sounds simple isn’t really as simple in Android. Once you do this change, everything supposedly works well, but the Market application on the phone thinks that the phone is not upgraded and allows reinstallation of the applications. The point is that applications don’t really have a technical problem as such with the upgraded firmware. It is simply a case of Google not authorising or registering the new version number of the HTC firmware. I can’t believe that companies can’t just fix it. 

If the problem remains unresolved for the next 24 hours, I vow to bring this issue to the media’s attention globally to make sure it gets the attention this deserves. I am now certain that a million customers grumling and moaning does not shake them, I am sure this action will. If you are a Google / HTC / Orange representative wanting to comment on my post, please can you refrain from writing 200 words on why your company is not responsible for the problem. You will be bettter off reserving your comments for the newspapers.

Having been through a gruelling MBA programme with a horde of written submissions, I think I now understand how to get ‘routinise’ a writing mission. My view of most research articles I read especially the commercially publicised ones, is now very reserved.

I suspect research companies are always vying to create an eye-catching analysis - as it directly enhances their popularity. From economics alone, if all researchers reached the same conclusions, who would pay a premium, say for Gartner’s research reports. However, reaching conclusions requires wading through a lot of complex data - not all of which can be captured by researchers. Further, many of the findings do not necessarily unanimously support one conclusion. Hence, there is a lot of subjectivity on the part of the researcher in determining the significance of individual findings. Of course, this can be partially mitigated through an "unbiased" survey.

Recently, there was a news byte that read "BDO Seidman foresees more potential opportunity for US based players work onshore". On the other hand, Gartner saw an increase in calls from clients looking for offshoring, with 20 percent to 30 percent of these from those offshoring for the first time. It is obvious that in times like these, people are looking at cutting costs, and it is a widely known fact that outsourcing is a common solution to this problem. Could Gartner have qualified what percentage of the calls it received were "fishing expeditions" versus "genuine enquiries". Chances are that if Gartner was called, it was a fishing expedition, as subscribers who genuinely wanted to outsource, would have floated RFPs in the supplier market. The RFP volume by itself is a better indicator of demand than are casual calls Gartner receives. Even the BDO Seidman analysis probably generalises what it heard from a few technology companies to a major market trend. If their source was press articles, there is a Deloitte research report that proves that negative outsourcing articles are more likely to attract press attention than positive ones. Further, extension or increase of outsourcing work from existing organisations is likely to be hidden news.. and repeat business is what most outsourcing suppliers thrive on.

There are severe flaws in an independent research model based on limited data. It is possible to flex the analysis and use facts to support conclusions one wants to reach. I can’t remember how many times I have read that "research proves that eating bananas is good for the heart", followed by another one that claims that the opposite.

Recently, I put my mind on a big investment idea competition posted on FT. In the end, I think I got it all wrong.. rather different from what they actually wanted. They actually wanted new business ideas that will succeed, and what I understood was that they wanted investible opportunities in the market. On of the other reasons for my understanding or rather mis-understanding was that the sponsor of the competition was BNY Mellon - a fund house. Anyways, enough about goof ups, here are two ideas that I think are highly investible.

Today, most UK consumers want to see value in the market. With the growth of Web 2.0, fewer consumers rely on advertised claims by firms rather they trust in-depth consumer-centric analysis of products / services & deals readily available on popular forums like moneysavingexpert.com (4.5m hits every month). Firms that offer a compelling & unique value proposition at no huge cost disadvantage to them & can tie in customers for a subscription (not a transaction alone) will do well & are great investment avenues. McDonalds is currently offering a 2-for-1 cinema ticket offer for a large meal. While it is a compelling value proposition, it comes at a huge cost to McDonalds & also does not promote brand loyalty. Examples of two organizations that can do this effectively are BSkyB and Tesco. Sky digital TV subscription is an expensive proposition by itself. If you add free broadband that costs Sky very little to provide, free weekend / evening calling plan & Sky perks every month, it then becomes a compelling value proposition. Moreover, in the current macroeconomic climate, entertainment expense is one of the easiest ones to cut & it is likely that consumers will sacrifice cinemas for Sky Movies. Tesco with its clubcard deals on days out / restaurants (known for heavy discounting to large customer bases, hence costs Tesco very little) subtly promotes a subscription model & its perception as the cheapest retailer is its greatest asset in a price-conscious market.

With interest rates going down & house prices falling at the same time, inevitably an inflection point will be reached when property buying will start picking momentum. Banks, despite being under pressure from Bank of England, will not find this a profitable proposition given high LIBOR rates to give out loans, and will continue holding strict qualification norms. This could mean high deposit requirements & a sound credit history. This is exactly the situation that will benefit the mortgage insurance sector. Most mortgage insurance providers have delegated underwriting with lending banks. In the past, this has lead to high defaults / claims, however, with the current risk adverse climate, banks can be assumed to do a better job at qualifying prospective borrowers. The revenue of mortgage insurance providers is determined by the difference in the bank’s deposit requirement and the ability of the borrower to fulfill this. The cost base of such insurance providers is determined by the number of claims arising. Both the revenue & cost influencers will change from negative to positive once the inflection point is reached. Given the fact that most sellers have waited too long now to make a sale of their properties, one can assume that the positive cycle will last long enough (2-3 years) while the mortgage insurance companies cash in. If there is one thing that banks & borrowers will be willing to pay a premium for in these uncertain times, it is risk management & there lies the big investment opportunity.
 

I was recently posed a question on what would be the impact of the current financial situation on outsourcing. Here’s my take on it.

My sense is that organisations will be ruthless in taking outsourcing decision especially in the sensitive "call centre" and BPO space. Until now, many organisations had been testing waters or taking a brief dip in the ocean of business process outsourcing only to return wet & cold from their outsourcing experience when their customers or unions or governments revolted against such a move. With the views of most governments polarised towards sustainability of companies & those of customers polarised towards value rather than comfort, it is a fantastic opportunity for organisations to dust off their unfinished outsourcing propositions and act decisively. Job losses, if they emanate from such moves, will be taken in stride as almost every other company is cutting staff anyway - be it an outsourcing driven cut or a cash flow driven one.

Given the recent financial crisis & the many lives lost in the stock market, I introspected to find out how deep-rooted the culture of luck is instilled in us. A shining example is a very popular board game "Snakes and Ladders". I read through wikipedia to understand whether the rules I once played the game with, are universal. My preliminary analysis tells me that this is the case. You roll a dice & move as many steps. There are only three (possibly 4) exceptions to this rule. That is when you land on a head of a snake, bottom of a ladder, your dice rolls to 6 (meaning you roll again), or you are on the final few blocks, & you have the get the right number (& no more) to take you to 100.

Wikipedia also adds that the simplicity and the see-sawing nature of the contest make the game popular with younger children, but the lack of any skill component in the game makes it less appealing for older players. Understandable… ain’t it. Further, it cites that the origin of this game was in India & that the moral of the game when invented was that a person can attain salvation (Moksha) through performing good deeds whereas by doing evil one takes rebirth in lower forms of life (Patamu).

I can’t see why this game had to remain as a game of luck & rather not become a game of decision. A simple addition to to the rule can change the audience of the game & make it more a victory of skill than luck. The addition to the rule set is as follows:

If a player rolls a dice & lands up on a number other than 6, or other than a number that lands on the head of a snake, the player has the option of skipping his turn without moving the token on the board.

Such a variation adds a number of playing strategies & risk-reward decisions into play. A few scenarions are presented as follows.

1. What if your competitor is far ahead from you? Do you then take this gamble in the hope of rolling a number that takes you to the bottom of a ladder?

2. What if the ladder you are eyeing takes you only 18 steps ahead? Would you rather keep playing until you reach 18 trotting on the board?

3. What if there is the potential of getting eaten by a snake (taking you down 12 steps), vs. the opportunity to go up 50 steps (through a ladder)?

There are many more scenarios, but I hope I have cited enough to suggest a case for change. The next time you play this game, try using this variation. If you do, drop in a line on my blog, just to assure me that I am being heard.

I am reading The Undercover Economist since last week & already I can see its practices in almost everything around me. The author claims scarcity defines bargaining power & there couldn’t be a better example of this when you visit an embassy – for me the experience came from visiting the Belgium one.

There aren’t too many routes to get a visa for another country. Probably, 4 or 5 application centres in the country and in truth only one that you can really visit because of its proximity. On Monday morning, I was stuck in a queue outside the Belgium visa application centre (VAC) in London for over 2 hours. This, despite reaching the VAC 25 minutes before it officially opens. There were about 30 applicants ahead of me and as time passed, there were an equal number of people behind me. The guard was letting people in one by one, so the rest had to be outside without any seating facilities for the elderly and in vicinity of a building under construction, where workers were constantly excusing us in the queue to get their equipments into and out of the site.

After two and a half hours, when my turn did come finally, I entered into heaven – 100 red seats lying empty allowing me to choose where to sit – a complete oxymoron to the long queues outside. Finally, everything was processed, albeit with minor hiccups. I was asked to collect the visa in person after two days. I reached the visa office again after two days, to find almost every other person who went to the collection desk abusing the VFS officials. There was this guy who moaned about getting a one-day visa for £73, and the other who was refused a visa apparently because his flight tickets were fully flexible & not “non-refundable”. There was a lady who made her third visit in the last week, after being constantly wrongly advised about when she could collect her passport, and another pregnant lady who was cursing the VFS official that he would never have children, because she was being made to wait for a long stretch of time. I had my share of bad experience too, to see my visa being a 3 month one, when I had requested for a year. This, despite having made an unblemished visit to another Schengen state last year on a single entry visa.

From the business perspective, I suspect it works like this. The Belgium embassy is pretty strict at granting visas. So they have outsourced the customer facing operations to VFS, who specialise more in handling customer abuses than provide customer service. While the Schengen visa typically costs £50, VFS charge an additional £25 over this as service charge. VFS knows no more about the application than we do. They can’t handle queries independently. Every applicant is advised to contact Embassy (in writing) for any complaint. Nobody from the embassy is represented at the application centre, just to avoid any backlashes. Being a customer, I think it is pretty appalling, but I reminded of what people who apply for an Indian visa also face. They need to get into queues as early as 6 in the morning. Stand in long queues.. there is a youtube video on the queue outside the Indian embassy at London, posted by a visa processing agency.

Quite clearly, the law of economics works against us (consumers / customers). There is no incentive for embassies to provide better customer service, as their consumers have no alternatives. It is very unlikely that someone will make “treating the embassy a lesson for its misdeeds” a cause of their life. More applicants need visas than embassies want to allow into their borders. It is high time governments stepped in to provide a regulatory body to manage this mistreatment. Perhaps on a quid-pro-quo basis i.e. My embassy in your country will be as professionally managed as your embassy in my country. Of course, consumers also can do something about it using their collective power that can be easily harnessed in the Web 2.0 world. Share your experience, tips & loopholes openly on public forums / blogs & make it difficult for the embassies to maintain double standards & keep rules hidden.