Mobile App Strategy

The rapid proliferation of smartphones demands a rethink on the IT strategy front. This article suggests that CIOs should designate a ‘CMO’, who is responsible for taking advantage of the powers of customer engagement and empowerment that are provided by mobile apps.

 

The first step in CIO’s mobile strategy is to create the office of the chief mobility officer and a supporting mobile architecture team.

 

Apple iPhone 3GS, Motorola Milestone and LG GW60

Apple iPhone 3GS, Motorola Milestone and LG GW60 (Photo credit: Wikipedia)

Mobile apps give rise to several challenges, including multi-channel conflicts, a deluge of data and activity, and transaction-based business process atomization. This requires changes to the business (transaction-based interactions thinking) and technology (scalable architectures) fronts of the firm’s strategy.

Read more at Page 1 Five tips on developing a mobile app strategy – CIO UK Magazine.

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Changing Role of the CIO

This infographic, shared by Wikibon, highlights the changing role of the CIO. A top priority for CIOs today is supporting business transformation through the application of cloud, mobile and big data.

Think of the CIO as managing a portfolio of applications, technologies, people and processes. The technology portfolio is allocated to initiatives that are designed to 1) Run the business 2) Grow the business and 3) Transform the business. Like a good portfolio manager, the CIO must balance risk and reward by allocating resources in a balanced manner.

The Changing Role of the CIO

There are several other nuggets of information available on this infographic, including the fact that cloud adopters save an average of 21% annually.

via The Changing Role of the CIO [Infographic] « Wikibon Blog.

SAP looking at technology acquisitions

SAP is on the hunt for major technology acquisitions. With nearly $6 billion in cash, and visible gaps in its cloud offerings, SAP has both the resources and motives for such a move. Compared to its biggest competitor, SAP has so far preferred in-house innovation and is lagging in the acquisitions space and with only 2 major acquisitions in the past few years.

Oracle, SAP’s US rival, which has made acquisition a central strategy, buying about 78 companies over the last six years.

Sap

Image via Wikipedia

A link to an interview with the co-CEO of SAP here.

Read more at ‘Sup with SAP? — Cloud Computing News and SAP resumes search for big acquisitions – FT.com.

Top Asian firms becoming more social media savy

This report from Burson Marsteller shows that Asia’s top 200 firms are increasing their engagement on social networks and micro-blogs. However, majority of these firms do not seem to have a long-term social media marketing strategy and lag their peers from the west.

India’s economic landscape

A representation of the Lion Capital of Ashoka...

Image via Wikipedia

The Economist‘s special report on India Inc. states that unlike in western economies, successful Indian firms are predominantly government owned or family owned businesses. The conglomerate is the business model of choice and this empire building is reflective of the 1900’s economic landscape of the US. An Infosys is an exception, rather than the norm.

All this might seem a recipe for disaster. In Korea and Japan closely held and widely spread firms became slothful. So far India Inc has been different: its big business houses compete and innovate fiercely. Their returns on capital are neither pathetic nor outrageous and most are prepared to invest billions of dollars in the risky capital projects that India needs so badly.

In the past decade Indian business has not been on a journey towards someone else’s economic model, whether Chinese, European or American. It has not been growing out of an immature phase, or shaking off a simpler way of doing things. Instead it seems to have established its own equilibrium—what might be called “capindialism”—in which profits are controlled not by institutional shareholders but mainly by the state, or by entrepreneurs and their descendants. Outside the state firms, the fiddly conglomerate is the favoured form of organisation.

The special report blames India’s soft state for being the reason firms choose to grow into conglomerate structures. It claims that ‘horizontal and vertical diversification’ of professionally managed firms is proof of this thesis.

Yet the best explanation is India’s soft state. Courts can take years to make their minds up, so contracts are hard to enforce. Infrastructure is often poor, supply chains tricky, red tape a hazard, and markets for people, materials and finished goods unreliable. Tarun Khanna and Krishna Palepu of Harvard Business School coined this idea in a 1997 paper. In these circumstances it makes sense to do things yourself.

Indian Buffet

Image by samk via Flickr

This cause and effect reasoning seems to be rather simplistic for the complicated Indian Thali . It ignores the unique role of the joint family in Indian society. It also ignores cultural and legal norms that encourage dynastic progression of company ownership and wealth. This ownership structure also promotes a more long-term view by Indian business houses. Unlike institutionalized firms, where bosses have to meet quarter to quarter performance measures, family owned businesses are more focused on creating wealth in the long-term, for the next generation. Thus they invest in frugal products (which, according to the report, do not generate high profits), which is a means to hook the millions of potential middle-class customers of tomorrow.

Overall, though the analysis comes across at times as bit contrived (it works towards the underlying assumption that one size fits all – the institutionalized business models that are successful in the west are the best) and at other times a bit naïve (for example, the report mixes up vertical integration, related diversification and unrelated diversification), the report is well written and worth a read. It raises several key questions and invigorates critical thinking on the state of India’s economic landscape.

If India is to finish the long journey to superpower status that has been plotted for it by many forecasters, it will have to get its act together on things like infrastructure, efficient land allocation, education, bond markets, reliable supply chains and the enforcement of contracts. Yet if it manages to make progress in these areas, the rationale for sprawling big business groups—sometimes almost like mini-states in their own right, as substitutes for the real thing—will gradually disappear. A big danger, then, to Indian business’s current way of doing things is long-term economic success. It would make today’s approach to organising firms redundant.

Read more at Business in India: Building India Inc | The EconomistAdventures in capitalism | The EconomistFamily firms: The Bollygarchs’ magic mix | The Economist, and The Indian miracle and the future: Rolls-Royces and pot-holes | The Economist.

Cognizant’s successful acquisition strategy

Cognizant’s CFO says that their acquisition strategy is to acquire specific technology and service skills, competencies and capabilities through focused, small-sized acquisitions. The maximum size of these acquisitions is $200 million – 3.3% of its approximately $6 billion revenues. Cognizant’s acquisition of Zaffera is the most recent in a series of such strategic acquisitions aimed at gaining specific knowledge.

Our acquisition strategy is towards very targeted tuck-in small deals which are targeted towards geographic expansion, building industry expertise and lastly, to acquire technology and services capability. For example, our PIPC acquisition was a very targeted acquisition. PIPC has expertise in large program management capability. It also had geographic presence in the UK and Australia. It has helped us in getting large development projects. Our sweet spot is $20-80 million deals and at the upper end it is $200 million. It is far easier to integrate.

Image via Business Today

via Cognizant’s CFO on acquisition strategy – Business Today – Business News.

India leads in Engineering R&D

India has a 22% share in the global engineering research and development(ER&D) outsourcing market, with current revenues of $10 billion expected to grow to $40 billion by the end of the decade. Hopefully, this export-oriented R&D will have spillover effects for local industry and help in improved manufacturing innovation for Indian firms, especially in fast growing sectors.

Cycle of Research and Development, from "...

Image via Wikipedia

With over 400 service providers employing nearly two lakh people and revenue of $9-10 billion, ER&D currently contributes 15 per cent of the $60 billion strong Indian IT-BPO export industry. During FY 2011, the cost savings by India-based ER&D Centres was over $20 billion.

Elaborating on sectors expected to have a bright future in India, Pandit said, “The Indian market is booming and as a country, we are no.1 when it comes to ER&D outsourcing. Sectors such as consumer electronics, automotive, energy, telecom and medical electronics have a great future.”

Read more in ‘Future bright for consumer electronics, automotive sectors’ – Indian Express and Business Line : Industry & Economy / Info-tech : Nasscom pegs engineering design market at $40 b by 2020.