The indian Automotive Market

Timeline: India’s automotive industry

India has begun an ambitious development programme for its automotive industry, which it hopes will make it a global production hub by 2016.

Rickshaw

To many in India, cars remain illusive luxuries

The initiative, which is backed by both the government and by the existing automotive industry, relies on heavy investment both by domestic operators and non-Indian car companies.

Many foreign firms are eager to participate in the likely profits to be derived both from the growth of the Indian market and from the development of India as a major producer and exporter of cars, motorcycles, commercial vehicles and automotive components.

Here is an overview of the relatively slow, albeit increasingly rapid, emergence of India’s automotive industry.

1940s

An embryonic automotive industry emerges in India

1953

Efforts to create a manufacturing industry to supply the automotive industry with components get underway, spearheaded by the Indian government and leading entrepreneurs.

1970 to 1980

India’s automotive industry begins to grow relatively fast, fuelled by six automotive companies:

  • Telco (now Tata Motors)
  • Ashok Leyland
  • Mahindra & Mahindra
  • Hindustan Motors
  • Premier Automobiles
  • Bajaj Auto

However, having a car is still seen as a luxury.

This is at least partly because the sector’s growth is held back by requirements for production licences and restrictions on both production within India and on imports.

1980 to 1985

Rickshaws in Calcutta

Rickshaws are still commonplace in India

Japanese manufacturers begin to build motorcycle, car and commercial vehicle factories in India, often in partnership with Indian firms.

Component manufacturers also enter into joint-venture agreements, with European and US firms.

Exports start to grow.

1985 to 1990

The auto component sector, which had been protected by high import tariffs, squares up to competitors as the rules are changed.

Maruti Udyog enters the passenger car segment.

During the following years, Japanese manufacturers started selling motorcycles and light commercial vehicles.

1990 to1995

Delhi cab driver 1993

Taxis outnumber private cars in many parts of India

Economic liberalisation gets underway, allowing passenger car production without licences, though import restrictions remained in place.

Hero Honda emerges as a major operator in the motorcycle market, while Maruti Udyog becomes the leading passenger car maker.

1995 to 2000

International car makers enter the Indian market, a trend that accelerates.

Calcutta 2001

India’s streets are gradually getting fuller

Advanced technology is introduced to meet competitive pressures, and environmental and safety imperatives.

Automobile companies start investing in service network to support maintenance of on-road vehicles.

Auto financing starts emerging as an important driver for demand.

2000 to present

As India’s car market grows, the country is also emerging as a global automotive production hub

Liberalisation of the automotive industry gets underway, with the removal of many trade and investment restrictions.

Cars developed and produced entirely in India for both the domestic and exports markets emerge.

Financial services firms begin to offer car loans, in cooperation with the car industry.

Efficiency, capacity and environmental issues are identified, along with initiatives aimed at encouraging research and development to address such issues.

http://news.bbc.co.uk/2/hi/business/6478685.stm

MURALI

A post wrten by a friend…… http://vanessagebbiesnews.blogspot.com/2007/04/winner-of-my-build-man-competition.html

MURALI

Murali is tapping his fingers to his forehead, trying to remember something. His shoulders are hunched over and his feet twitch sporadically.
“What? What is it?” I ask. He sighs and shakes his head. I trace the letter ‘s’ down his back and yawn. When I open my eyes, Murali is gone. I look under the bed and behind the chair. I call out his name but no one answers.

*

“Diya?”
“What? What happened?”
“Murali’s gone.”
“What do you mean he’s gone?”
“I mean he was sitting right beside me and I yawned and now he’s gone.”
“Don’t be silly, he probably left.”
“He couldn’t have left, he doesn’t know how to open the door. Meaning it sticks and he can’t get it open by himself.”
“Is this some kind of joke? Do you two have me on speaker phone or something?”
“No, he’s really gone.”
“Listen, call me back.”
*

I begin to tabulate everything I know about him. He is left handed and has scars on his feet from a bike accident. He collects butterfly wings and hides them between the pages of an empty pocket diary. He never wears a watch. He believes that my door is haunted. Sometimes he thinks there are tiny demon-hands holding it shut. Sometimes he just kicks it and says ‘Stupid fuck.’
“How come I can get it open?” I asked him once.
“Because,” he said. “You’re haunted too.”
I open the window to see if he has fallen out and broken his ankle but he isn’t there.

*

“It’s Diya. Is he back yet?”
“No.”
“Are you high or something? It’s ok if you are but are you sure he was there? “
“I’m sure. I don’t know. I thought he was here.”
“Ok. That’s ok.”
“Diya, I need you to come let me out.”
“What do you mean?”
“I can’t get the door open, it’s stuck.”
“Ok. Ok hold on.”

*

The light dims and bends on the floor like liquid. Murali suddenly seems to be everywhere at once, in colored bits and pieces. I remember the curve of his teeth, how I sometimes felt like shrugging him off like a heavy overcoat. I think of all the questions people will ask.
Where you the last person with him?
Yes.
How often do you lose things in your room? Have you ever lost a person before? How well did you know him?
I know that he hummed when he peed. I know that as a child, he thought girls came from their mothers and boys came from their fathers.
Was anything bothering him?
He didn’t like my door. He thought it was vindictive and haunted.
Did you make him disappear?

I don’t know.

*

“Hey, it’s me Diya. I’m knocking, can you hear me knocking?”
“Yes.”
“Ok, so how do you want to do this?”
“Pull the door towards you when I say.”
“Ok. Now?”
“No wait. Ok now try.”
“Fuck. What happened?”
“I don’t know. Usually I can open it fine. I don’t know what happened today.”
“Is he still gone?”
“He’s not here. I don’t know what happened.”
“Everything will be ok. I’m going to get somebody to help open the door and then we’re going to figure this out. We’ll go look for him, how about that? I’m sure he’ll be there.”
“Where?”
“We’ll find him, don’t worry. We’ll figure this out.”

*

I picture roots shooting from the base of the door like sprays of black lightning, anchoring it down into places filled with broken things. I don’t think they’ll be able to get the door open. I don’t think anybody will be able to do anything.
The dim light of the evening fades into a thick, dark smudge, swallowing the lines and corners of my room. The only thing I can see is my pillow which is lying on the floor. There is no trace of Murali– no fingerprints, no butterfly wings, no notes saying ‘gone fishing’ or just ‘gone’. It is like he was never here.

I sit beside the door and listen as a forest of broken bones blossoms inside me..

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Fall of MG, or Rise of MG?

Chinese plant rolls out first MG

The first Chinese-built MG sports cars have rolled off the production line in the eastern city of Nanjing.

The manufacturer, state-owned Nanjing Automobile, bought the assets of collapsed UK car firm Rover in 2005.

It plans to produce 200,000 new cars every year and hopes to sell the vehicles around the world.

But many are likely to be sold to the booming domestic market, with demand for luxury vehicles soaring amongst the country’s wealthy elite.

In six short months the Chinese have built a massive new factory and installed the robots and assembly lines they bought from the collapsed Rover, reports the BBC’s Quentin Sommerville in Nanjing.

And it was with music from the City of Birmingham Symphony Orchestra and against a video wall showing shots of Tower Bridge and Buckingham Palace that Nanjing Auto launched its two new models.

These are the MG7 saloon and the MG-TF sports car which, General Manager Zhang Xin told Reuters news agency, would be priced at between 180,000 and 400,000 yuan ($23,300 – $51,700; £11,800 – £26,300).

The cars have not changed much, right down to the Union flag, which is still displayed proudly on their bodywork.

The company wants to sell the cars not just in China but around the world.

But with the Chinese car market growing by 10 million new cars every year, Nanjing Auto will likely be selling most of its MGs in showrooms closer to home, our correspondent adds.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/6497959.stm

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In the era of globalization, the above story is a fitting example of the rise of the east. MG a once mighty European auto maker, took the sad path of closing down, only to be bought by Nanjing Auto. however, Nanjing auto has been very clear, it is imbibing only the technical knowhow and the IP of the company, it saves it the trouble of going through the learning curve. Craftily, it has also included all the British insignias in order to say that “look, its made in china, but its still british”. A rather cruel blow. First to go was Lenovo, now another behemoth MG. so whats next?

The chinese took 6 months to set up a factory to churn out 200K cars per annum. 6Months. Now that is determination. I wonder if at any point any other country will be able to achieve such levels of productivity.

The Untapped, $5 Trillion Market – Myth or Reality?

C. K. Prahalad, the University of Michigan strategy guru and author of the best seller “The Fortune at the Bottom of the Pyramid,” has lately taken some flack for his have-it-both-ways proposition that multinational corporations could alleviate global poverty while boosting their bottom lines. Critics like Aneel Karnani, also of the University of Michigan, argue that the bottom of the pyramid is smaller than Prahalad has claimed and far less lucrative.

In an interview for Fast Company’s March “Fast 50” issue, Prahalad insisted he hadn’t overestimated the size of the BOP. Now he’s got some hard data to back up his claim.

According to a report released this morning by the IFC (the private sector arm of the World Bank Group) and the World Resources Institute, 4 billion people who live in “relative poverty” have purchasing power that amounts to a $5 trillion market. The report, The Next 4 Billion, uses income and expenditure data from household surveys to measure the size of the market at the very base of the economic pyramid. That’s a first.

The report defines those who live at the base of the pyramid as having incomes below $3,000 in “local purchasing power” ranging from less than $3.35 a day in Brazil to $1.56 in India. In a classic bit of understatement, the report politely characterizes the $5 trillion BOP market as “underserved.”

No doubt, some experts will continue to squabble over the numbers. But perhaps The Next 4 Billion, which is loaded with business case studies, will inspire at least a few big companies to at last understand that the BOP market could well be their next growth opportunity.

___________

That was an article on Fast Company. Something that really bothers one, would be the fact that- statistically, the market is huge, like the same way one says, there are 2 million IT employees, so that means that there is a market for ergonomic keyboards thats in the 2 million range, that is a $20Million market, which in theory is correct, but in practice, not correct. So, there might be 4Billion BoP persons, but these persons are subject to such abject poverty, its pitiful to try and sell them coke, or a TV or anything else. one needs to first educate them in better farming techniques, and increase the yield from the soil, and once they are above the “below $1” line, then sell them stuff.

The agrarian society has been one of frugality and caution, the urban society is one of splurging and debt, it would not be advisable to move this lifestyle of steady incomes to one that is dependent on monsoons.

SHOOTING AN ELEPHANT- George Orwell

One of them endless forwards that have proliferated the internet, thought it makes an interesting read!
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In Moulmein, in lower Burma, I was hated by large numbers of people–the only time in my life that I have been important enough for this to happen to me. I was sub-divisional police officer of the town, and in an aimless, petty kind of way anti-European feeling was very bitter. No one

had the guts to raise a riot, but if a European woman went through the bazaars alone somebody would probably spit betel juice over her dress. As a police officer I was an obvious target and was baited whenever it seemed safe to do so. When a nimble Burman tripped me up on the football field and the referee (another Burman) looked the other way, the crowd yelled with hideous laughter. This happened more than once. In the end the sneering yellow faces of young men that met me everywhere, the insults hooted after me when I was at a safe distance, got badly on my nerves. The young Buddhist priests were the worst of all. There were several thousands of them in the town and none of them seemed to have anything to do except stand on street corners and jeer at Europeans.

All this was perplexing and upsetting. For at that time I had already made up my mind that imperialism was an evil thing and the sooner I chucked up my job and got out of it the better. Theoretically–and secretly, of course–I was all for the Burmese and all against their
oppressors, the British. As for the job I was doing, I hated it more bitterly than I can perhaps make clear. In a job like that you see the dirty work of Empire at close quarters. The wretched prisoners huddling in the stinking cages of the lock-ups, the grey, cowed faces of the
long-term convicts, the scarred buttocks of the men who had been Bogged with bamboos–all these oppressed me with an intolerable sense of guilt. But I could get nothing into perspective. I was young and ill-educated and I had had to think out my problems in the utter silence that is
imposed on every Englishman in the East. I did not even know that the British Empire is dying, still less did I know that it is a great deal better than the younger empires that are going to supplant it. All I knew was that I was stuck between my hatred of the empire I served and my rage against the evil-spirited little beasts who tried to make my job impossible. With one part of my mind I thought of the British Raj as an unbreakable tyranny, as something clamped down, IN SAECULA SAECULORUM, upon the will of prostrate peoples; with another part I thought that the greatest joy in the world would be to drive a bayonet into a Buddhist priest’s guts. Feelings like these are the normal by-products of imperialism; ask any Anglo-Indian official, if you can catch him off duty.

One day something happened which in a roundabout way was enlightening. It was a tiny incident in itself, but it gave me a better glimpse than I had had before of the real nature of imperialism–the real motives for which despotic governments act. Early one morning the sub-inspector at a police station the other end of the town rang me up on the phone and said that an elephant was ravaging the bazaar. Would I please come and do something about it? I did not know what I could do, but I wanted to see what was happening and I got on to a pony and started out. I took my rifle, an old .44 Winchester and much too small to kill an elephant, but I thought the noise might be useful IN TERROREM. Various Burmans stopped me on the way and told me about the elephant’s doings. It was not, of course, a wild elephant, but a tame one which had gone “must.” It had been chained up, as tame elephants always are when their attack of “must” is due, but on the previous night it had broken its chain and escaped. Its mahout, the only person who could manage it when it was in that state, had set out in pursuit, but had taken the wrong direction and was now twelve hours’ journey away, and in the morning the elephant had suddenly reappeared in the town. The Burmese population had no weapons and were quite helpless against it. It had already destroyed somebody’s bamboo hut, killed a cow and raided some fruit-stalls and devoured the stock; also it had met the municipal rubbish van and, when the driver jumped out and took to his heels, had turned the van over and inflicted violences upon it.

The Burmese sub-inspector and some Indian constables were waiting for me in the quarter where the elephant had been seen. It was a very poor quarter, a labyrinth of squalid bamboo huts, thatched with palmleaf, winding all over a steep hillside. I remember that it was a cloudy,
stuffy morning at the beginning of the rains. We began questioning the people as to where the elephant had gone and, as usual, failed to get any definite information. That is invariably the case in the East; a story always sounds clear enough at a distance, but the nearer you get to the
scene of events the vaguer it becomes. Some of the people said that the elephant had gone in one direction, some said that he had gone in another, some professed not even to have heard of any elephant. I had almost made up my mind that the whole story was a pack of lies, when we
heard yells a little distance away. There was a loud, scandalized cry of “Go away, child! Go away this instant!” and an old woman with a switch in her hand came round the corner of a hut, violently shooing away a crowd of naked children. Some more women followed, clicking their tongues and exclaiming; evidently there was something that the children ought not to have seen. I rounded the hut and saw a man’s dead body sprawling in the mud. He was an Indian, a black Dravidian coolie, almost naked, and he could not have been dead many minutes. The people said that the elephant had come suddenly upon him round the corner of the hut, caught him with
its trunk, put its foot on his back and ground him into the earth. This was the rainy season and the ground was soft, and his face had scored a trench a foot deep and a couple of yards long. He was lying on his belly with arms crucified and head sharply twisted to one side. His face was
coated with mud, the eyes wide open, the teeth bared and grinning with an expression of unendurable agony. (Never tell me, by the way, that the dead look peaceful. Most of the corpses I have seen looked devilish.) The friction of the great beast’s foot had stripped the skin from his back as neatly as one skins a rabbit. As soon as I saw the dead man I sent an orderly to a friend’s house nearby to borrow an elephant rifle. I had already sent back the pony, not wanting it to go mad with fright and throw me if it smelt the elephant.

The orderly came back in a few minutes with a rifle and five cartridges, and meanwhile some Burmans had arrived and told us that the elephant was in the paddy fields below, only a few hundred yards away. As I started forward practically the whole population of the quarter flocked out of the houses and followed me. They had seen the rifle and were all shouting excitedly that I was going to shoot the elephant. They had not shown much interest in the elephant when he was merely ravaging their homes, but it was different now that he was going to be shot. It was a bit of fun to them, as it would be to an English crowd; besides they wanted the meat. It made me vaguely uneasy. I had no intention of shooting the elephant–I had merely sent for the rifle to defend myself if necessary–and it is always unnerving to have a crowd following you. I marched down the hill, looking and feeling a fool, with the rifle over my shoulder and an ever-growing army of people jostling at my heels. At the bottom, when you got away from the huts, there was a metalled road and beyond that a miry waste of paddy fields a thousand yards across, not yet ploughed but soggy from the first rains and dotted with coarse grass. The elephant was
standing eight yards from the road, his left side towards us. He took not the slightest notice of the crowd’s approach. He was tearing up bunches of grass, beating them against his knees to clean them and stuffing them into his mouth.

I had halted on the road. As soon as I saw the elephant I knew with perfect certainty that I ought not to shoot him. It is a serious matter to shoot a working elephant–it is comparable to destroying a huge and costly piece of machinery–and obviously one ought not to do it if it can
possibly be avoided. And at that distance, peacefully eating, the elephant looked no more dangerous than a cow. I thought then and I think now that his attack of “must” was already passing off; in which case he would merely wander harmlessly about until the mahout came back and caught him. Moreover, I did not in the least want to shoot him. I decided that I would watch him for a little while to make sure that he did not turn savage again, and then go home.

But at that moment I glanced round at the crowd that had followed me. It was an immense crowd, two thousand at the least and growing every minute. It blocked the road for a long distance on either side. I looked at the sea of yellow faces above the garish clothes-faces all happy and excited over this bit of fun, all certain that the elephant was going to be shot. They were watching me as they would watch a conjurer about to perform a trick. They did not like me, but with the magical rifle in my hands I was momentarily worth watching. And suddenly I realized that I should have to shoot the elephant after all. The people expected it of me and I had got to do it; I could feel their two thousand wills pressing me forward, irresistibly. And it was at this moment, as I stood there with the rifle in my hands, that I first grasped the hollowness, the futility of the white man’s dominion in the East. Here was I, the white man with his gun, standing in front of the unarmed native crowd–seemingly the leading actor of the piece; but in reality I was only an absurd puppet pushed to and fro by the will of those yellow faces behind. I perceived in this moment that when the white man turns tyrant it is his own freedom that he
destroys. He becomes a sort of hollow, posing dummy, the conventionalized figure of a sahib. For it is the condition of his rule that he shall spend his life in trying to impress the “natives,” and so in every crisis he has got to do what the “natives” expect of him. He wears a mask, and
his face grows to fit it. I had got to shoot the elephant. I had committed myself to doing it when I sent for the rifle. A sahib has got to act like a sahib; he has got to appear resolute, to know his own mind and do definite things. To come all that way, rifle in hand, with two thousand people marching at my heels, and then to trail feebly away, having done nothing–no, that was impossible. The crowd would laugh at me. And my whole life, every white man’s life in the East, was one long struggle not to be laughed at.

But I did not want to shoot the elephant. I watched him beating his bunch of grass against his knees, with that preoccupied grandmotherly air that elephants have. It seemed to me that it would be murder to shoot him. At that age I was not squeamish about killing animals, but I had never shot an elephant and never wanted to. (Somehow it always seems worse to kill a LARGE animal.) Besides, there was the beast’s owner to be considered. Alive, the elephant was worth at least a hundred pounds; dead, he would only be worth the value of his tusks, five pounds, possibly. But I had got to act quickly. I turned to some experienced-looking Burmans who had
been there when we arrived, and asked them how the elephant had been behaving. They all said the same thing: he took no notice of you if you left him alone, but he might charge if you went too close to him.

It was perfectly clear to me what I ought to do. I ought to walk up to within, say, twenty-five yards of the elephant and test his behavior. If he charged, I could shoot; if he took no notice of me, it would be safe to leave him until the mahout came back. But also I knew that I was going
to do no such thing. I was a poor shot with a rifle and the ground was soft mud into which one would sink at every step. If the elephant charged and I missed him, I should have about as much chance as a toad under a steam-roller. But even then I was not thinking particularly of my own
skin, only of the watchful yellow faces behind. For at that moment, with the crowd watching me, I was not afraid in the ordinary sense, as I would have been if I had been alone. A white man mustn’t be frightened in front of “natives”; and so, in general, he isn’t frightened. The sole thought in my mind was that if anything went wrong those two thousand Burmans would see me pursued, caught, trampled on and reduced to a grinning corpse like that Indian up the hill. And if that happened it was quite probable that some of them would laugh. That would never do.

There was only one alternative. I shoved the cartridges into the magazine and lay down on the road to get a better aim. The crowd grew very still, and a deep, low, happy sigh, as of people who see the theatre curtain go up at last, breathed from innumerable throats. They were going to have their bit of fun after all. The rifle was a beautiful German thing with cross-hair sights. I did not then know that in shooting an elephant one would shoot to cut an imaginary bar running from ear-hole to ear-hole. I ought, therefore, as the elephant was sideways on, to have aimed straight
at his ear-hole, actually I aimed several inches in front of this, thinking the brain would be further forward.

When I pulled the trigger I did not hear the bang or feel the kick–one never does when a shot goes home–but I heard the devilish roar of glee that went up from the crowd. In that instant, in too short a time, one would have thought, even for the bullet to get there, a mysterious,
terrible change had come over the elephant. He neither stirred nor fell, but every line of his body had altered. He looked suddenly stricken, shrunken, immensely old, as though the frighfful impact of the bullet had paralysed him without knocking him down. At last, after what seemed a
long time–it might have been five seconds, I dare say–he sagged flabbily to his knees. His mouth slobbered. An enormous senility seemed to have settled upon him. One could have imagined him thousands of years old. I fired again into the same spot. At the second shot he did not collapse but climbed with desperate slowness to his feet and stood weakly upright, with legs sagging and head drooping. I fired a third time. That was the shot that did for him. You could see the agony of it jolt his whole body and knock the last remnant of strength from his legs. But in
falling he seemed for a moment to rise, for as his hind legs collapsed beneath him he seemed to tower upward like a huge rock toppling, his trunk reaching skyward like a tree. He trumpeted, for the first and only time. And then down he came, his belly towards me, with a crash that seemed to shake the ground even where I lay.

I got up. The Burmans were already racing past me across the mud. It was obvious that the elephant would never rise again, but he was not dead. He was breathing very rhythmically with long rattling gasps, his great mound of a side painfully rising and falling. His mouth was wide open–I could see far down into caverns of pale pink throat. I waited a long time for him to die, but his breathing did not weaken. Finally I fired my two remaining shots into the spot where I thought his heart must be. The thick blood welled out of him like red velvet, but still he did not die. His body did not even jerk when the shots hit him, the tortured breathing continued without a pause. He was dying, very slowly and in great agony, but in some world remote from me where not even a bullet could damage him further. I felt that I had got to put an end to that dreadful noise. It seemed dreadful to see the great beast Lying there, powerless to move and yet powerless to die, and not even to be able to finish him. I sent back for my small rifle and poured shot after shot into his heart and down his throat. They seemed to make no impression. The tortured gasps continued as steadily as the ticking of a clock.

In the end I could not stand it any longer and went away. I heard later that it took him half an hour to die. Burmans were bringing dahs and baskets even before I left, and I was told they had stripped his body almost to the bones by the afternoon.

Afterwards, of course, there were endless discussions about the shooting of the elephant. The owner was furious, but he was only an Indian and could do nothing. Besides, legally I had done the right thing, for a mad elephant has to be killed, like a mad dog, if its owner fails to control
it. Among the Europeans opinion was divided. The older men said I was right, the younger men said it was a damn shame to shoot an elephant for killing a coolie, because an elephant was worth more than any damn Coringhee coolie. And afterwards I was very glad that the coolie had been killed; it put me legally in the right and it gave me a sufficient pretext for shooting the elephant.

I often wondered whether any of the others grasped that I had done it solely to avoid looking a fool.

IT Productivity: Measuring the Immeasurable

The productivity numbers released by the U.S. Bureau of Labor Statistics in October 2006 sent a shock wave around the country: After showing robust increases for several years, productivity growth had slowed to an annualized 0.0 percent (though that was later revised up to 0.2 percent). Meanwhile, the trailing 12-month figure sat at a paltry 1.3 percent, the slowest growth since 1997.
What happened? The news of the slowdown, or near halt, to productivity growth brought with it fears that the rapid gains of the past five years were over, and that IT’s contribution to productivity growth was perhaps overstated. But wasn’t information technology supposed to fuel never-ending productivity increases? Isn’t that why we spent all that money on the stuff?
The answer, not surprisingly, is complicated. It’s so complicated, in fact, that in the ongoing debate over the impact of technology on productivity, Accenture Ltd., Microsoft Corp. and Hewlett-Packard Co. have created a new trade association dedicated to defending IT’s honor. Their Institute for Innovation and Information Productivity, or IIIP, is a nonprofit group endeavoring to redefine how productivity is calculated and measured in an information-based service economy, a critical issue for technology and IT services vendors of all stripes.
Karen Lojeski, the research director for the IIIP, puts the problem in strong terms. “The way productivity is measured today just doesn’t make any sense. All these productivity measures are based on manufacturing models, and there’s no accurate calculation at the macro level of how to capture productivity in the service sector. And when you have an economy that’s 80 percent service, you’ve got a problem. The idea of trying to understand it as the number of people working times the number of hours worked equals X number of widgets doesn’t make any sense in a knowledge-based environment.”
The questions that the IIIP is asking—and trying to answer—are ones that have vexed the business community for decades. And they are fueling a revival of the classic debate over IT productivity. What is IT’s contribution to productivity? Is productivity even the proper way to measure the potential for economic growth and increases in the nation’s standard of living? The answers depend on whom you ask, and on what it is you’re really trying to measure. And the answers are critical, as they hold the key to understanding the true value of IT investments.

A Brief History of Productivity
As it turns out, economists attributed much of the recent slowdown to a general weakening in economic growth: When gross domestic product slows down, as it did in the third quarter of 2006, it’s often accompanied by a slowdown in productivity growth, as companies anticipating further gains continue to add labor to the productivity equation without concomitant gains in output. But this time around, the fears of a productivity slowdown seemed to rattle more than a few nerves in the IT community.
The measures ordinarily used to measure productivity, such as labor productivity and even multifactor productivity, involve simply adding up all the known inputs and outputs and then doing the math. In the case of labor productivity, that’s just output divided by the number of hours worked. In the case of multifactor (or total factor) productivity, that’s all the known outputs divided by all the known inputs. Pretty straightforward, and it generally worked, at least as a rough measure during the Industrial Age, when the inputs and outputs were relatively easily tallied.
But the arrival of the Digital Age has exponentially exacerbated the problem. In the early days of the information revolution, when IT resided beyond the glass wall, IT’s contribution to productivity was relatively easy to assess. Take the cutting of payroll checks, for instance: How many laborious hours spent writing individual checks could you eliminate by feeding payroll data into a computer that automatically calculated the amount of the check, and withholding and Social Security taxes, and then printed it? Machines replaced humans, and it was simple to see the return.
By the late 1980s, however, with the advent of personal computers, networks and back-end systems that touched more parts of the business, the math became more difficult. In 1987, Nobel Prize-winning economist Robert Solow wrote, “You can see the computer age everywhere but in the productivity statistics.” The problem, analysts decided, was either a lag in the time it took for companies to benefit from their IT investments, or the difficulty of measuring IT’s contribution accurately—or both.
Then came the 1990s, which brought about a transformation in IT and how businesses used it. The Internet, the graphical browser, e-commerce, as well as enterprise-level software such as ERP and CRM, brought about massive investments in computers, networking equipment and software. But all that investment only fueled the controversy surrounding just how much IT contributes to productivity gains, and whether it is accurately measured.
In 2001, McKinsey & Co.’s McKinsey Global Institute published a still-controversial report arguing that most of the productivity gains in the 1990s were attributable to just six sectors of the economy: telecom, semiconductors, computer manufacturing, securities, and wholesale and retail distribution. In other sectors productivity was essentially flat or had actually declined.
That led McKinsey to suggest that IT was just one of a number of factors that generated the decade’s productivity gains. “The problem,” says Diana Farrell, director of the McKinsey Global Institute, “was that all sectors of the economy spent on IT, but because the productivity gains were concentrated in just those six sectors, you clearly can’t attribute the growth to IT alone.” IT is needed to facilitate productivity gains, she says, but only under the right conditions, which include sufficient competitive intensity and sufficient demand—exactly the conditions faced by those six sectors that contributed so much to the productivity gains of the 1990s.
Erik Brynjolfsson, the George and Sandra Schussel Professor of Management at the MIT Sloan School of Management and director of the MIT Center for Digital Business, offers a different rationale. To explain what happened, Brynjolfsson has developed a concept he calls organizational capital:
“The work I’ve been doing suggests that most of the benefits from IT come from complementary investments in what we call organizational capital—business processes and other changes in the way companies are organized. For every dollar spent on IT hardware, $10 is spent on this kind of business reorganization.
“What happened in the 1990s was that companies were investing a lot, not only in IT, but also a tremendous amount in organizational capital and new business processes, and those investments tend to take several years to pay off. Go forward a few years to 2001–02, when IT spending dropped, as did investments in organizational capital. The focus was not in adding to organizational capital, but in harvesting what had been done. The way that affects productivity is that the government statistics don’t measure organizational capital at all, but they do measure the output that’s generated from it. So that is why we had very high productivity, circa 2001–03, as we were reaping the benefits of these investments but not incurring the expense of new investments in organizational capital,” he says.
And the recent drop in productivity? Says Brynjolfsson: “If you don’t invest in IT or organizational capital, then three, four, five years down the road, you’re not going to be in the position to get decent returns. So five years later, 2006, that’s more or less exactly what’s happened: The investments that weren’t made in 2001 are the reason we’re not having the comparable level of productivity growth today.”
IT and its Discontents
The problem with IT as a source of productivity gains is that those gains, as the McKinsey study showed, are so unevenly distributed. Put bluntly, some companies, and some sectors, are a whole lot better than others at putting IT to work productively. John Parkinson, former chief technologist for the Americas at Capgemini, points out that IT can only boost productivity if it lets you do more with less effort, or you make the time it takes to do the work shorter. But a lot of new technology innovations, he says, “imposed a productivity penalty by forcing people to relearn how they do things, which reduces their productivity for a while. That, I think, is what the McKinsey study showed: They picked a period of time, the 1990s, when lots of relearning was going on, to do the study. Everybody was disrupted by broad adoption of PCs and networks, the Internet, e-commerce. But once we figured it out, the productivity gains kicked in, because you were over the learning hump.
“The second penalty you pay, because technology makes possible things you couldn’t do before, is that you now do those things because they’re possible,” Parkinson adds. “And that adds work to the total amount people have to do.” To illustrate the problem, Parkinson points to information-based decision-making. “It used to be that managers didn’t worry about gathering mountains of information, populating spreadsheets, building in the models and agonizing over what they told you. You just said, ‘yeah, I think we’ll go that way.’ And you went. But now that process takes a lot more effort. So there’s a productivity loss in some parts of business. But that doesn’t mean there’s an effectiveness loss. It just means that the cost of being right went up.”
On a larger scale, much of the investment in IT made by corporations was simply not productive. “There was a lot of “me-too” investment in IT across a lot of sectors since 1995,” says McKinsey’s Farrell. “Companies saw that their rivals had something new, and so they made these very large investments without recognizing that even within a sector, different competitive strategies mean your productivity could be driven by different things. But making IT investments in areas that aren’t driving the bulk of your potential productivity gains is wasted investment.”
Measuring the Wrong Things
Perhaps the reason that IT has been much-maligned when it comes to productivity is that its role has been widely misunderstood. Farrell’s ultimate conclusion is that considering IT a primary productivity driver isn’t really accurate. Yes, it’s an enabler, and even, nowadays, a necessity. But as she says, it isn’t sufficient. “The real driver of productivity, before, during and after the dot-com boom, is innovation. Only innovation can drive both increases in value-add, and decreases in cost,” she says. In and of itself, Farrell maintains, IT can’t make a real difference. Instead, it’s simply part of the process by which managers innovate—and thus drive productivity gains.
In Farrell’s view, innovation begets productivity in three ways: The first involves the development of the innovation itself, whether it’s a new product, service or process. The second involves how innovations get disseminated within the innovating company, or among competitors in its sectors, and eventually in other sectors. And the third is how those innovations scale to their optimum use. That’s where the growth and profits come from. IT plays an increasingly critical role in this process. “In this context,” she says, “one of the reasons IT is such a powerful tool is that it can enable all three of these processes. IT enables many innovations directly—mobile telephony, online securities trading and retail innovation come to mind. And it enables the diffusion of innovation much more quickly because you can replicate IT services much more quickly than you can other innovations. And finally, because IT can scale so well, it can help take innovations to their maximum potential.” Still, it’s not IT but the innovation that creates the competitive advantage.
Parkinson puts the problem another way. Raw productivity gains, he says, aren’t sufficient to compete successfully in the 21st century. “What you want is agile productivity,” he maintains. “You want to be able to repurpose the assets of your business as efficiently as possible to stay current with the market. The early 20th-century model of capital efficiency, which is what built corporations and drove the process-focused productivity of the second half of the century, is being rethought around the ability to move all assets, capital, people and information as effectively as possible.” Agility, of course, is but another way to describe a kind of perpetual state of innovation, of moving fast enough—through product and process development, and into and out of markets as opportunity dictates—to compete.
That’s a consistent theme among the experts and CIOs alike. Atefeh Riazi, the worldwide CIO and a senior partner at Ogilvy & Mather Worldwide, the New York City-based advertising agency, points to growth as the metric that really matters in this environment. “Cutting costs and making your people more productive is critical, of course,” she says. “We have a huge mobility program in place which is going to help our people become more productive. But it goes beyond all that. Now it’s whether you can get to market faster. Your competitors are coming from places you did not expect. So you have to respond faster, smarter and cheaper. All of these are going to help grow your business. It’s no longer just about cutting costs.”
Measuring Matters
Here’s a scenario that demonstrates how the same IT investment can reap wildly different rewards. Two companies in the same industry invest in identical IT systems. The first company has both the innovative culture and the managerial wherewithal to rethink the processes affected by its new system, and revenue and earnings grow by 15 percent. The second company, with a different culture and managerial goals, concentrates on using its new system to cut staff; productivity grows by 3 percent and earnings grow by 5 percent, but revenues don’t grow at all. The second company saw productivity gains from its IT investment, but the first company saw the greater benefit.
Given those two scenarios, the goal for CIOs now is to figure out how to measure the real benefit of successful innovation, and of IT’s impact on the innovation process, not just the benefit of IT by itself. “In order to advance in a knowledge economy, you need to be innovating on a consistent basis,” says IIIP’s Lojeski. “Whether you have radical innovations, incremental innovations, process innovations, product innovations, technological innovations, administrative innovations, you need to be able to draw a straight line from the knowledge workers—and the inputs he or she makes use of, including IT—to the effectiveness of the innovation. So what we’re trying to measure is the effectiveness of our output, especially when it comes to innovation and value creation. How effective are we as knowledge workers?”
If organizations could get a better handle on the true value of their knowledge-based outputs, Lojeski concludes, they would have a much better basis on which to make decisions about the inputs they use. “The overwhelming majority of executives are very frustrated with their innovation investments globally,” she says. “They’re reaching for all kinds of new innovation models—R&D, open innovation, outsourced innovation. But in order to face shareholders and say, ‘We’re providing shareholder value by investing in these kinds of things,’ we have to be able to measure that value. If you can’t measure what you’re doing accurately, it’s very difficult to value your investments accurately.
“We don’t have the answers yet,” Lojeski adds. “But we’re thinking that, ultimately, effectiveness will replace productivity as the standard measure of growth for the knowledge economy.”

http://www.cioinsight.com/article2/0,1540,2085007,00.asp

Performance Evaluations

How did you do in your last performance review ? These quotes were taken from actual performance evaluations, I’m not sure if those being evaluated still had jobs at the end of it…

1. “Since my last report, this employee has reached rock bottom-and has started to dig.”

2. “His men would follow him anywhere-but only out of morbid curiosity.”

3. “I would not allow this employee to breed.”

4. “This employee is really not so much of a ‘has-been’, but more of a definite ‘won’t be’.”

5. “Works well when under constant supervision and cornered like a rat in a trap.”

6. “When she opens her mouth, it seems that it is only to change feet.”

7. “He would be out of his depth in a parking lot puddle”

8. “This young lady has delusions of adequacy.”

9. “He sets low personal standards and then consistently fails to achieve them.”

10. “This employee is depriving a village somewhere of an idiot.”

11. “This employee should go far, ….. and the sooner he starts, the better.”

12. “Got a full 6-pack, but lacks the plastic thing to hold it all together.”

13. “A gross ignoramus – 144 times worse than an ordinary ignoramus.”

14. “He certainly takes a long time to make his pointless.”

15. “He doesn’t have ulcers, but he’s a carrier.”

16. “I would like to go hunting with him sometime.”

17. “He’s been working with glue too much.”

18. “He would argue with a sign post.”

19. “He has a knack for making strangers immediately.”

20. “He brings a lot of joy whenever he leaves the room.”

21. “When his IQ reaches 50, he should sell.”

22. “If you see two people talking and one looks bored-he’s the other one.”

23. “A photographic memory but with the lens cover glued on.”

24. “A prime candidate for natural de-selection.”

25. “Donated his brain to science before he was done using it.”

26. “Gates are down, the lights are flashing, but the train isn’t coming.”

27. “Has two brains: one is lost and the other is out looking for it.”

28. “If he were any more stupid, he’d have to be watered twice a week.

29. “If you give him a penny for his thoughts, you’d get change.”

30. “If you stand close enough to him, you can hear the oceans

31. “He’s so dense, light bends around him.”

32. “One neuron short of a synapse.”

33. “Some drink from the fountain of knowledge;….. he only gargled.”

34. “Takes him 2 hours to watch 60 minutes.”

35. “The wheel is turning, but the hamster is dead.”

Big Brother row points to mature India

White English people are ignorant stupid racists.

It’s a sweeping, inaccurate generalisation but it’s the impression that might have been left in the minds of millions of people in India who last week watched one of their own being, to use the English vernacular, “slagged off” mercilessly on British TV.

Contrary to much of the reporting around the world Shilpa Shetty is not a major Bollywood star. If she was she would not have shared a stage with the British B-grade celebrities also stuck inside the Big Brother House.

The programme makers wouldn’t have been able to afford her pay cheque. But while she may not have been the darling of the big screen in India before she entered the reality show, she’ll emerge, regardless of the means of her exit as a darling of the Indian middle class.

Onslaught

There has been a palpable sense of pride with the way she has dealt with what is widely seen here as racist, foul-mouthed onslaughts from her clearly under-educated, boorish English companions.

Ms Goody articulates in all her crassness the fact that your average English speaking Indian is a lot better educated than your average English person

Send your comments
But more interestingly the incident has also shown that India, contrary to the fears of British diplomats, has become comfortable enough with its position in the world to see things like the Big Brother row in perspective.

The Indian media has had a feeding frenzy on this story. It’s dominated the headlines and been wall-to-wall across the dozens of new TV news channels that have sprung up over the last few years.

What there hasn’t been is a knee jerk xenophobia against the British, in response to an Indian woman being abused by descendants of the old Raj.

For many years India had a real chip on its shoulder about the UK. The injustices of the colonial era were never far from the surface. Given an opportunity Indian leaders would fall over themselves to take a dig at the British for an easy bit of popular press.

The best example of this was when the then Prime Minister IK Gujral publicly called the UK a “third rate” country in petulant response to a perceived slight from the British entourage out for the 50th anniversary of India’s independence.

Future greatness

I’m sure that if the Big Brother controversy had been played out then, the reaction of the Indian media would have been much more akin to the kind of aggressive nationalism displayed by the British tabloids against the French.

But as India this year prepares to celebrate its 60th anniversary of independent rule one thing seems to be clear.

India has stopped looking over its shoulder. It no longer views itself through the prism of its colonial past.

The “Britishers” are no longer the bogeymen they used to be because India is no longer suffering from the inferiority complex it used to have. India no longer feels the need to dwell on past injustices because it’s too busy getting ready for what many predict will be its future greatness.

There has been outrage here at the treatment of Shilpa Shetty. But there has also been acknowledgement that there has been equal outrage in the UK from brown, black and white people alike.

The condemnation by Britain’s political class from the prime minister down has received the same attention as the comments from the Indian government. The only exception to this measured response were the half dozen chaps in Bihar who found their 15 minutes of fame by burning a rather bad effigy of the Channel Four executives.

But no-one in India is going to claim that the actions of a few underemployed Biharis, which was recycled endlessly on TV around the world, represents the rest of the nation.

So despite the shrill cry from the British media, there was never any chance that this was going to become a diplomatic incident during the visit of Britain’s finance minister, Gordon Brown.

His entourage were probably having kittens when the media started asking him about this story but the reality is that today’s Indian leadership is much more interested in solidifying its place in the international pecking order than scoring cheap points off the likely next British prime minister.

Better educated

One English commentator noted after the row erupted that “Shilpa Shetty has taken the supposed British virtues of civility, articulacy, reserve and having a stiff upper lip and shown that.. we lack them”.

That’s not all India does better than the UK these days. In terms of their celebrity status Shilpa and her nemesis Jade Goody are almost on a par.

But taken as a snap shot of like-for-like India’s B-grade celebrities are clearly better educated, better mannered and frankly speak better English than their UK counterparts.

‘Ms Goody has earned the ire of many in the UK for trashing its reputation across the world.
Unfortunately for the UK it’s not just Indian celebrities. British companies have been outsourcing their customer service centres, software departments, biotechnology labs etc to the subcontinent for years now.

They did so because they recognised a huge pool of well-educated, English-speaking, middle-class people that could do the job not only cheaper than the folks back home, but often better.

Jade Goody clearly believed that her behaviour would be tolerated by the British public watching outside. She was wrong.

Ms Goody has earned the ire of many in the UK for trashing its reputation across the world. Her antics also over-shadowed Mr Brown’s trip here.

But long term she may have helped Mr Brown make a fairly important point to the British public.

Gordon Brown had never set foot in India before last week. But he already knew the challenges its huge pool of young people posed to the UK economy. He outlined the challenges in his annual economic review late last year.

Ms Goody articulates in her crassness the fact that your average English-speaking Indian (most of whom have been through private schooling) is a lot better educated than your average English person. And by the way there are probably more than 100 million of them.

If you’re British then Shilpa Shetty in all her well-mannered educated politeness is a lot more scary that Jade Goody could ever hope to be.

http://news.bbc.co.uk/2/hi/south_asia/6285717.stm

Qwerty Attacks!

Coming back to the adventures of our fearless IT hero, Qwerty, the quintessential IT geek, who has a trick or two up his sleeve in solving a problem.

It was a bright and sunny morning, our fearless hero strolls slowly to the meeting point, where the transport usually picks up him along with his fellow workers to take them to work. On the way, our hero thinks, suddenly he realises, oh my gosh! i forgot to add the code!

HE FORGOT TO ADD THE CODE! HE FORGOT TO ADD THE CODE! HE FORGOT TO ADD THE CODE!!!!
ding!!ding!!ding!!ding!!ding!!ding!!ding!!ding!!ding!! the bells suddenly start clanging away! WHAT did he do, he actually forgot! the deliverable was last night, and he realised that this was a mistake he is going to regret.
cursing his luck , Qwerty runs to the stop. realises its a futile attempt, as the transport would not come a minute before its designated time. he started walking fast to the point. all along the way, he was thingking. what must i do?
What was the code? what is that one thing that Qwerty forgot to add, the perfect programmer who people claim is the best, actually forgot something. Gwash! what is the world coming to with peopel forgetting things. well, the transport finallyshows its ugly head over the bridge, why… he asks himself, “can they not change this ugly transport” sometiems i think to myself, this transport is so vile, that it does not know if its coming or going. This is because of the fact that tht same piece of glass design covers the front as well as theback of the vehicle.
he clambers on, dreading the fact that his project manager would have reached before him, and that he would have realised that Qwerty has not DONE it! a cold sweat breaks out, and his stomach goes into knots. Hi co-worker asks if all is ok, but Qwerty does not answer, thinmking what is the point. this is my last day on the bus anyway!

Painfully, counting the minutes, like the prisioner an hour before his execution, a feeling of helplessness comes over, its like you have fallen into a cold pool, and have no way of getting out, you wonder,… what next? aaaarrrhhhhggggg!!!
YOU’RE FIRED!YOU’RE FIRED!YOU’RE FIRED!YOU’RE FIRED!YOU’RE FIRED!YOU’RE FIRED!YOU’RE FIRED!!!! The words resonate in Qwertys head. Oh, my GOD! today is going to be the very last day. what o i do?

the thoughts are broken with the sharp piercing of the beeper suggesting that they had arrived at their destination. now, his whole back is drenched in sweat, wondering how on earth is he going to get thru this?
slowly, he trdges along, unwillingly, to his desk, left, right, left, right, left, right, left, right, left, right till he reaches the building. clomping his way up to his floor, he goes to the desk and sits down. turns on the monitor, his face going ashen with every second.
slowly he looks at his inbox…. a moment of silence…………………………………………………………………………………………………………… …………………………………………………………………………………………………………………………………………………… …………………………………………………………………………………………………………………………………………………… …………………………………………………………………………………………………………………………………………………… ………………. and color first drains….. he sees a mail….. oh my god!
he opens the mail…. wondering what can possibly go wrong……. he blinks… wonders ……………………..is he really reading this? it all looks so surreal…. a smile breaks on the corner of his mouth, slowly spreads across the face…. he stops himself from jumping up.

“QWERTY!” his boss hollers…..” get your behind here….. “
why the hell did you forget to fill your time sheet….. all the time staring at the computer screen… before he has a chance to defend himself, his boss looks up…. “get outa my sight”.

Our hero goes, sits at his desk… and reads the mail again…….
“The ERP system will be down for maintenance tonight, you will find it difficult to fill your time sheets, and hence we request you to fill in your time sheets tomorrow”

Long live!

aaah… the world we live in!

I was just reading a wiki on how to make ” starship enterprise” from a floppy drive. The pictures clearly depict the complete destruction of a floppy disk to create the greatest spaceship of all times, evidently, I am a huge startrek fan! anyways, so what do i read at the end of the wiki….

Warnings

  • The edges of the metal dust cover and disk hub are extremely sharp. You can cut yourself on them, so be careful.
  • Doing this will destroy all data on the disk.
  • Do not attempt to place your new model into a floppy disk drive.

Now pray tell me, who in their right minds would think of putting this back in the floppy drive.

Whom do you blame for the reducing IQ in the world?