Tuesday, October 30, 2007

Strategy

Organizations are known to differentiate based on their strategy. Essentially all competitors build same product, set similar processes and target same customers. This is the initial growth stage. Everyone has a chance of survival, because market is too huge. As more and more players enter into market, their arises a need to DIFFERENTIATE- a word which has kept most of the top managers on toes for ages and years. Innovation is not a small game. While they say options are limitless, there is only so much that one can do in calculated manner. So, drives in the heroic word- Strategy. Often misused, but still widely used. :)
I was reading a nice speech given by one of the young budding manager on strategy for an IT company. It was simple and looked more operational to me, but linked straight to strategy which emerges from no where.
For years each business has run on some basic concepts-
a) Need for it to exist
b) People who can elaborate the need and setup a process to fulfill it
c) People who enable this process with labour and effort
d) A mechanism which takes this offering to the people who need
e) The consumer finally

Each business starts as innovation, everything that is repeated for more than a decade reduces to process and now? Since its a process, you know what fits where and you start playing with human intelligence. You want to put that into a database and process it. Amazingly, for years the human mental asset was considered to be intangible and difficult to capture commodity. But this is not the same today. BPO was someone intellectual asset, which was put on papers and followed by 200 people recruited. Maintenance in IT is another service which is going to follow similar trend in years to come.
So, here is a strategic shift. Lets talk of how it works in IT:
a) If someone can outsource to me, can i outsource to someone else? Hmm.. how about small tier2 cities? Small companies. Lesser salary, lesser brand name, so less expectation. Lets start a supply chain in IT. China, Malaysia, or may be even Ramnagar within India.
b) 200 people * 8 hours. Let me look at my human assets as products lying in warehouse. Some are lying in shelves unused for years, some products do not get to see shelves ever. How about managing this imbalance. Lets cann it productivity improvement. Utilization, may be.
c) Enough of big shops(read US, UK). Let me take my stuff to those small growing budding businesses. They might pay me lesser, but then my operations are normalized and even 10rs profit on 200 is ok for me. Lets have a wider portfolio for a better market tolerance.
d) My industry is people intensive. Decades of exposure has made work routine. Got to add value to work and give them something new to make them stick to me, or else they will break free. [ growing economy, u see:)]

Donno, if i talk absurd, but i have covered STRATEGY for next IT move. And i love the fact that this is moving manufacturing way. Does that essentially mean, all business are same?

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