Why B-School grads prefer consulting

The economy’s booming, jobs are flowing and campuses are gearing up for a year that’s shaping up to be the icing on three years of bullish placements. Students this year are in the driver’s seat. Assured of multiple offers, they’re free to be adventurous with their career choices.

“The confidence that the market gives you is a driving factor in your adventurous spirit and could change your decisions. With so many companies recruiting, people tend to say let me wait for the right profile,” says Manish Bhagat, a member of the IIM Indore placement committee.

That’s possibly one of the factors that has pushed old favourites like FMCG, software and IT consulting down a rung in the ranking charts. The most favoured sectors on campus for the batch of ’06 are the all-weather consulting industry at number one, with foreign banks coming in second. Next up is FMCG, software /IT consulting and financial institutions.

After losing ground in the previous year, retailing is back in the reckoning in ’06 moving up three spots to number six. The top 10 industries of choice are rounded off with Indian banks, auto, media/entertainment and insurance. Telecom and consumer durables two sectors that were in the reckoning last year, have fallen out of the top 15 industries of choice for the class of ’06.

These are the results of the ACNielsen Campustrack B-school survey, which polled the class of ’06 on their perceptions about recruiting companies and the factors used to evaluate prospective employers. The survey was conducted among the top 21 B-schools in India.

“We have seen that the perceived ‘vibrancy’ of a given sector has a definite bearing on its attractiveness to the talent pool. While last year saw the telecom sector on the rise, the hectic activity in retail banking and retailing fuelled by an upswing in the economy and consumer spending has played its part this year,” says Prasenjit Das, associate director, client service, ACNielsen ORG-MARG.

Consulting in particular is on everyone’s list. Not only is the industry a hot favourite, but consultants McKinsey, The Boston Consulting Group and Accenture are the 1, 2 and 3 most preferred companies of the year.

“Now there is a lot more information on campus about different choices. There’s transparency and people are making more informed decisions,” says Vikram Bhalla, principal, BCG.

Mr Bhalla points to the constant flow of correspondence between students and the firm as a sign of greater student maturity. This means that student perception — shaped by the experiences of seniors and corporate interactions on campus — are playing a wider role in placement choices than ever before.

“I think BCG is clearly the best choice in consulting and over time it’ll get clearer and clearer,” he said, commenting of the firm’s consistent rise up the rankings from number 10 in ’03. BCG’s decision to recruit summer interns this year has also gone some way in boosting its image at B-schools.

Another important factor is growth perception. In direct contrast to Hindustan Lever’s fall from grace (the company fell from number 2 last year to five in ’06) is the rise of Accenture. The management services and technology consulting company has rocketed from number 8 on the class of ’05’s list to number 3 this year.

According to Accenture-India HR head Rahul Varma, the firm’s strong growth credentials have played a role. Over the past four years, Accenture has grown from a 200-strong company to employing over 15,000 people. The company has also diversified from consulting into IT delivery and BPO.

“We are hiring across a wide spectrum of roles. And given our track record of growth, most campuses have been bullish about receiving us,” he says.

Next on the list is foreign banks. And if investment banks and MNC banks are clubbed together this category fills a total of seven places on the top 15 list. HSBC takes the lead, followed by Citi Group (6), Goldman Sachs (8), American Express, Deutsche Bank, Lehman Brother and ABN Amro.

“Banking and finance has emerged as one of the most attractive job sectors for management graduates this year, given the rapid growth rate in the industry and the range of jobs available to meet career growth aspirations,” said an HSBC spokesperson.

“The students view banking as a sector that can provide larger job responsibilities at an early stage and an opportunity to work overseas, which students clearly prefer at the start of their careers.”

Interestingly, students say there’s another reason why foreign banks are attractive. Many secretly view a retail or corporate profile with an MNC bank as the opportunity for back-door entry in i-banking.

“There’s a good chance that if you’re spotted they’ll move you laterally in the i-banking arm,” says one student.

That apart, students point to profiles, work ethic and salaries as the main draws with MNC banks. Indian banks, which are currently ranked way below their MNC counterparts at number seven, should become more competitive over the next three-four years, say students, as positive feedback from seniors is beginning to alter the perception about local banks.

This year, however, ICICI Bank joined Microsoft as the two companies that fell out of the Top 15 charts, making way for Deutsche Bank and ABN Amro

How Much Is My Blog Worth?

My blog, ideasunlimited.blogspot.com/, is worth $564.54

My blog is worth $564.54.
How much is your blog worth?

B-school education is too broadbased

The biggest drawback of an MBA is that it is pan-industry in its outlook. A business education course does not factor in the different challenges presented by different industries.

Most MBA courses are too broadbased to effectively prepare their students for the intense competition in today’s business environment — each industry requires a different skill set, but the typical MBA programme does not equip you adequately to meet industry- or sector-specific demands.

Of course, you now hear of several companies that are designing their own management education programmes. As an effort to make the white collar workforce more relevant to the needs of a sector, it is commendable. But perhaps still more can be done to help bridge the gap between what is taught and what is required.

The other issue most B-schools overlook is working in a team. To be fair, all management institutes emphasise the importance of being a team player. But what they teach and how that learning actually manifests itself in corporate corridors are two different things.

In the “real world”, the roles of a leader and a team are not always cut and dried. Some times, the leader is at the forefront of the action; on other occasions, he may decide to set the tone and then sit back, while the team takes the lead.

B-schools instruct you in neither the existence of such scenarios nor how to deal with them. Other important issues of dealing with and working with teams — how to interact with and within a team, how to motivate your team members — are also inadequately addressed.

Also, management students are taught extensively about the importance of strategy. What they are not taught, however, is how to implement a strategy and make sure an idea goes the planned way. That’s important: after all, implementation accounts for about 80 per cent of job delivery. But, somewhere along the line, it gets short shrift.

Best Business Schools by forbes

Forbes best business school rankings are out . Forbes survey ranks schools based on return on investment--meaning compensation five years after graduation minus tuition and the forgone salary during school. The top part-time school, Stern's Langone Part-time M.B.A. Program, had a median five-year gain of $166,000, greatly helped by the absence of forgone salary. That sum beats the $134,000 gain of our top-ranked full-time program, Tuck School of Business at Dartmouth College. In a combined ranking of part-time and full-time U.S. programs, Tuck and the University of Pennsylvania's Wharton School are the only full-time schools that would make the top five. (For the first time, Harvard Business School is not the top-ranked school.)

The Top Ten
Dartmouth
Pennsylvania
Chicago
Columbia
Yale
Stanford
Harvard
Virginia
Cornell
Northwestern

Not Normal : how to cut the fuel cost

This is not a normal post for this blog . but the way gas prices have impacted our life i am posting this link which provides some eye opening tips for future and current MBA . How to cut the fuel cost

Good managers only from B-schools?

The debate on the relevance of business schools refuses to die down. In the past, various academics -- including Henry Mintzberg of McGill, Jeffrey Pfeffer of Stanford-GSB and Warren Bennis of University of Southern California's Marshall School of Business -- have trained their guns on B-schools and the value of MBAs. So far, Mintzberg has been the strongest critic. His grouse: "An MBA trains the wrong people in the wrong ways for the wrong reasons."

Three US-based professors have jumped into the fray. In a paper titled 'What's Really Wrong With US Business Schools?', Harry DeAngelo and Linda DeAngelo of Marshall School of Business, and Jerold L Zimmerman of Simon School of Business take a potshot at another B-school staple: Annual rankings.

The paper, posted on the Social Science Research Network's website on August 1, has already been downloaded more than 2,000 times, making it one of the most popular papers on the site. "We are managing B-schools in a myopic fashion analogous to corporate managers' fixation on quarterly EPS -- a danger that we as business professors, of course, warn our students to avoid in the business world. The myopia at B-schools is engendered by the pressure to move up in rankings published by the media,"Harry DeAngelo said.

The three professors said that instead of competing on the basis of the long-run value of the education they provide and the research they do, schools are fixated on "looking good"in the next media survey. "The pressure to score highly on measures that are poor proxies for true quality creates strong incentives to adopt dysfunctional policies. For example, it translates into curriculum changes that emphasise appearance over substance, less time spent on rigorous foundational training, research,"DeAngelo said.

The paper has evoked strong reactions in the academic community both in India and abroad. The most common grouse is regarding the methodology of these surveys. David Lampe, spokesperson for Harvard Business School, said: "Not only are the differences in the scores among many schools statistically insignificant, but the different formulae used to derive them -- a different one for each publication -- seem to have little to do with the true quality of the institutions."

Damned if they do and damned if they don't. "If schools submit to ranking, they are accused of pandering to the masses. If they don't, they are running away from comparison,"said Ajit Rangnekar, deputy dean, Indian School of Business (ISB). In the US, Harvard and Wharton stayed out of last year's BusinessWeek rankings. In India, ISB has decided not to participate in any rankings. The IIMs have also decided to stay out.

Harvard's Lampe said: "Regardless of their shortcomings, ranking surveys will not go away because of the continuing popularity of lists of all kinds."Clearly, it looks like this debate is not going to die out any time soon.

B-schools wake up to the real world

If there's one thing that Donald Trump's hit reality TV show The Apprentice has taught us, it's that your MBA won't always bail you out in a real life business crisis. By all accounts, acquiring an MBA is a gruelling process.

But could it be that students are so busy discussing textbook problems, writing papers and taking exams, that they've forgotten how to handle the real world?

Business schools in the US obviously think so. They're redesigning their business courses to "get real" (in some instances actually using Donald's show in classrooms). And recently, they have started to move towards the arts, and in particular, design. Schools such as Stanford, Harvard and Carnegie Mellon have all introduced design courses into their business curricula to teach their students how to think creatively.

This trend is beginning to crawl into India. Although most B-schools still keep strictly to their business curricula, some are offering arts classes, or introducing a creative element -- beyond the classic "lateral thinking" (a la Edward de Bono) -- into the curriculum that allows students to apply what they learn in the classroom.

The Indian Institute of Management at Bangalore, for instance, has a class called "Tracking Creative Boundaries", introduced to it by the India Foundation for the Arts. Artists teach students about the history of art and the lives of artists.

"A professor," explains the executive director of IFA, Anmol Vellani, "once said to me that management education is all wrong. It only teaches technical competence, whereas management is about other things as well -- soft skills, ethics and, above all, creativity."

The value is clear. "Artists are naturally suspicious of accepted idioms," says Vellani. "They're constantly reinventing themselves. Entrepreneurs need to be inventive too... they need to recognise real world constraints, have the imagination to adapt to them, and be creative."

Other schools, in their quest to lend vibrancy to an entrepreneurial culture, are also focusing more closely on 'creativity' in business.

For instance, the Faculty of Management Studies at Delhi University is facilitating an entrepreneurship competition, involving around 500 students from 20 B-schools and 20 undergraduate colleges, where students have to come up with a business plan.

The 'ROI'? Relevance, originality and impact -- before you get any return on investment. FMS students also have the option to take arts electives in separate schools at DU, but are so busy, says a student, that no one has taken a single one.

Gurgaon's Management Development Institute, meanwhile, has a course on theatre technique incorporated into the communications portion of the MBA program. Theatre is widely acknowledged as a laboratory of audience response, invaluable to any business person who must work out how to address and engage a market.

"Classes like this help students to put themselves in real world situations," says Gita Bajaj, an assistant professor of Business Communications at MDI-Gurgaon, "With exercises like public speaking and role playing, we put students on the spot and this forces them to adapt quickly and make practical decisions."

To be sure, Edward de Bono's Six Thinking Hats remain handy tools available to B-schools trying to make students break their mental moulds and think anew in varied ways. But the difference now is that actual works of art -- both 'high art' and popular -- are beginning to infiltrate the otherwise sheltered environs of B-school campuses.

Global Skill Report 2005

Brainbench has published global skill report which is available
here

The key findings are

IT competence is on the rise worldwide and represents
a significant economic factor for countries
of all sizes. While the ability to create a
knowledge-based economy is an engine for
economic development in emerging nations, it is
also a significant growth factor in the economy in
more established nations. No matter the location,
high levels of competence are a significant factor
in the ability to realize increased profits and
economic prosperity.
• The same basic knowledge, skills, and competencies
underlie jobs across the globe - meaning that
work is starting to take on a common language.
This will greatly facilitate the development of a
more global economy in which geographic
boundaries are not limiting the
manner in which business
is conducted.
This means
that more
and
more, a competitive economic advantage requires
a global mind-set and continues to justify the
removal of geographic barriers to conducting
business.
• Effective business and economic growth requires
organizations to make strategic choices regarding
the geographic location of critical business
components (i.e., programming, customer service).
These choices are based on a combination of
trade-offs, most prominent of which are the
evaluation of available skill and knowledge levels
in a geographic area vs. the cost of obtaining
access to those skills. Areas offering a combination
of high skill levels with low costs for access
to those skills will be more likely to lead to the
outsourcing of business functions to these areas.
• Education is becoming increasingly important
especially for emerging nations that are working
to develop new knowledge and skills-based
economies. In turn, a critical factor in stimulating
economic growth will be the development of
a skilled and competitive labor force.
• Taken together, the above conclusions place an
even greater premium on selecting employees
wisely. As the overall level of competence rises
across the globe, the labor pool will continue to
become more competitive. No matter what the
situation, selecting the best most qualified
individual for a specific job provides increasing
levels of return on investment. This provides a
strong justification for the continued growth of
an assessment industry which can provide measurement
of critical knowledge, skills, and abilities.

How relevant is your B-school course?

Your perspective on what they don't teach you at B-schools really depends on how experienced you were when you began your management education.

B-schools are designed to give academic inputs -- even the case studies discussed (which are mainly from the US) have little relevance to the Indian business environment.

One reason for this, of course, is that most B-school professors are those who didn't succeed as entrepreneurs, didn't get the opportunity to set up a business or didn't climb the corporate ladder too swiftly. Consequently, there is little infusion of practical insight on the problems you face as an entrepreneur or manager.

What are the problems you are not equipped to handle? First, managing the transition of a family-owned and managed business to one managed by professional entrepreneurs and funded by venture capital.

Second, if you want to conduct business ethically, how do you handle the bribery and corruption that is endemic in our country? How do you coach and encourage those who work with you to stay on the straight and narrow path when the done thing is to be corrupt?

Our company had the opportunity to sell our products to the state-run electricity boards, and increase our size manifold. We chose to stay small, but clean. The challenge lay in choosing like-minded employees who could manage the rigours of doing business in India without resorting to bribery.

Third, how do you balance intuition and over-analysing facts when taking decisions? This comes only from experience. Which is why when an experienced manager goes to B-school, he is better able to quickly apply the decision-making theory to real problems. That also explains why many of the better B-schools prefer experienced candidates.

MIT Weblog Survey

India targets US B-schools to promote growth story

Of late, India has started capturing the imagination of top business schools in the United States. Catch tomorrow's global leaders and hard sell them the India story today. That seems to be the slogan.

In a unique initiative, members of the Indian Diaspora based in the United States plan to project the India growth story in all its dimensions to students at the Chicago Graduate School of Business on May 7.

The inaugural conference -- which is being organised by the South Asia Business Group (SABG, a student-run group at the B-school) and being supported by India Brand Equity Foundation (IBEF) -- will specifically focus on:

The coming of age of the Indian economy and its capital markets;
The growth in venture capital;
Investment management
Healthcare sector;
Consumer retail;
Financial services; and
Infrastructure investments.
These topics will be explored through keynote speeches and panel discussions featuring some of the most prominent business and academic figures in these areas.

Speakers and panelists, handpicked from the Indian Diaspora, include Sam Pitroda, CEO WorldTel; Sumir Chadha, Founder, WestBridge Capital; and Ajai Chaudhary, senior scientist at Eli Lilly.

Apart from these, there will be other speakers from McKinsey & Co., Eli Lily, Whirlpool Corporation, Oppenheimer, Wal-Mart, McDonald's. A number of investment banks and venture capital funds will also be represented, as will Indian organisations like Wipro, which has a key presence in the US.

"There is a huge pent-up demand at the Chicago GSB to learn more about India, its new economy and its culture. A case in point: The SABG recently hosted a brief panel discussion for a business delegation from India led by Sunil Kant Munjal, President, Confederation of Indian Industry. We had originally planned on an MBA student audience of 110-120, but the actual attendance turned out to be more like 200, surpassing our expectations," says Hozef Arif, President, SABG.

Support to the conference is part of IBEF's ongoing strategy to increase its footprint across the global b-school arena and enhance India's brand equity, especially in key investor destinations such as the US.

The US is India's largest business partner with bilateral trade between the two countries exceeding $21 billion in 2004.

By supporting events such as this 'Investing in India' conference at Chicago GSB, IBEF wants to project India beyond the IT sector and the BPO industry. It seeks to project India's potential as a manufacturing hub, especially for design and knowledge industries. It would also like to highlight the unprecedented boom in healthcare and life-sciences sector, the growing consumerism, and the overall attractiveness of India as a growth and investment market.

"If we can create positive mindspace about India in the 20-30 age group, half our work is done. These are the people who will be leaders in their fields when India emerges as one of the world's top 3 economies over the next two decades,'' points out Ajay Khanna, Chief Executive Officer, India Brand Equity Foundation.

According to him, IBEF will support more such India-specific events being planned at other global B-schools.

Events like these play an important role in increasing curiosity levels on India.

For example, at the Harvard event in 2004 -- billed as the 'India Business Conference -- more than 700 people turned up. The event had over 40 speakers of Indian origin, representing top organisations in the US and India, including McKinsey, Pfizer, HSBC, Norwest Venture Partners, Microsoft and Morgan Stanley.

Over the last 2 years, leading business schools like Kellogg, Harvard, Stanford and Wharton have organised annual India trips to familarise their students with the world's fastest growing democracy. More than a dozen Indian companies now figure as case studies at these schools, and now the latest trend is for business schools to organise India specific conferences.

"There's a tremendous interest in understanding two things -- the emergence of the Indian economy on the global scene, and its important role in the decoupling of services from where work is done and where it is delivered," Patrick T Harker, dean of the Wharton School told the New York Times in 2004.

India is also gaining increasing US mindshare because of healthy business ties. Bilateral trade between the two countries crossed $ 21 billion in 2004, and US companies like GE, Coke and Oracle have some of their most lucrative worldwide businesses in India.

Then of course, there's the issue of growing credibility in the media. Newsweek in 2004 said India was the 'Best country to be an investor in.' Businessweek ran several covers over 2003 and 2004, and its interest in the country hasn't abated.

A Goldman Sachs report (Dreaming with BRICs: The Path to 2050) states that among Brazil, Russia, India and China (BRIC), India will grow the fastest over the next few decades. At its present rate of growth, the burgeoning economy of the country 'would be adding nearly one France every 3.5 years and one Australia every year.'

In 2004, a global survey of corporate investors ranked India as the second most attractive destination for foreign direct investment, after China, and ahead of the US.

In 2003, India was ranked sixth.

When India first started it's economic reforms process in 1991, it was a small blip on the US business scene. Fifteen years and its now part of the global B-school curriculum. The journey's paid off, and IBEF's biggest objective is to sustain this momentum.

B-School blues

The rise of the business school is one of the most potent symbols of the triumph of global capitalism. The US alone boasts more than 400 accredited business schools churning out close to 100,000 MBAs annually. Europe now has some 80 accredited schools of its own. The new frontier is Asia, where 30,000 students sit MBA admissions exams each year and western schools are scrambling to partner with institutions in China and India.

Given this, the sudden decline in US applications over the past two years is all the more striking. In part it reflects the globalisation of business education itself: foreign students no longer need to go to the US to get an MBA, while US students increasingly seek to add international exposure by studying overseas. Foreign demand for US MBAs has also been hit by tough and unfriendly immigration controls.

Got Into B-School? Hacker Offers Crystal Ball

A computer hacker helped applicants break into records at some of the most prestigious U.S. business schools to see if they were accepted weeks before official offers were sent out, officials said on Friday.
A person who applied to Harvard Business School posted instructions on how to check the application status at several business schools, including Stanford, Duke and Dartmouth, on Business Week's online technology forum this week.

Roughly 100 people who applied to Harvard followed the directions, but many did not learn their fate since decisions had not been entered into the computer yet. Harvard's next batch of acceptances will be sent out later this month.

"The school views this as electronic breaking and entering, and regards this as a very serious breach," Harvard Business School spokesman Jim Aisner said. The school has identified all people who tried to check their status, Aisner said. He did not say whether those applicants were accepted or rejected.

The schools all use ApplyYourself, a Fairfax, Virginia-based company that manages Web pages used by students to apply to roughly 300 universities. The schools also use the company to tell applicants if they got in.

ApplyYourself Chief Executive Len Metheny said the company made immediate modifications to its systems and applicants did not obtain information about anyone but themselves.

"The person who did this reverse engineered a way to access the decision page for his own record and then told others how to do it," Metheny said.

The Harvard Crimson, which first reported the story, said the hacker wrote: "I know everyone is getting more and more anxious to check (the) status of their apps to (Harvard Business School). So I looked around on their site and found a way." The notice has been removed from the Business Week site.

Officials at the schools and ApplyYourself would not say whether they plan to press charges.

Retiring Workforce, Widening Skills Gap

Exodus of "critical talent" threaten U.S. companies

New York — February 16, 2005 — Impending Baby Boomer retirements, a widening skills gap driven by declining educational standards, and outdated and ineffective approaches to talent management are combining forces to produce a "perfect storm" that threatens the global business economy, according to new research conducted by the Human Capital practice of Deloitte Consulting and Deloitte Research, a part of Deloitte Services.

In a recent U.S. survey of human resources executives nationwide conducted by Deloitte Consulting, more than 70 percent of the 123 respondents say incoming workers with inadequate skills pose the greatest threat to business performance over the next three years, followed by Baby Boomer retirement (61 percent), and the inability to retain key talent (55 percent). These survey findings are underscored in Deloitte Research's report, "It's 2008: Do You Know Where Your Talent Is? Why Acquisition and Retention Strategies Don't Work."

"The overwhelming accumulation of data, including Deloitte Consulting's new research, points to an inescapable conclusion: the widening skills gap, particularly among the categories of workers who disproportionately drive companies' growth and performance, is a global phenomenon that will create unprecedented challenges for businesses," said Ainar Aijala, vice chairman of Deloitte Consulting and global service area leader of Deloitte Consulting's Human Capital practice. "The confluence of demographic and social trends — the full force of which will begin to be felt in as little as three years — will leave behind companies that do not begin to rethink and redesign their approach to managing human capital."

Draining of the Global Labor Pool

In only three years, the first wave of Baby Boomers will turn 62, the average retirement age in North America, Europe and Asia. According to the Deloitte Consulting survey, one-third of U.S. companies expect to lose 11 percent or more of their current workforce to retirements by 2008.

"While the 'greying' of the workforce will independently create large vacancies across industries, additional factors, such as low birth and immigration rates in Europe and the single-child policy in China, present further perils to companies worldwide," explained Aijala. "Companies will also continue to face inadequate skills among an increasingly diverse, virtual, global, and disengaged workforce."

Life sciences, energy and the public sector will be the hardest hit with manufacturing, consumer business and financial services industries close behind. For example, Canada, Australia and the United States could lose more than a third of their government employees by 2010. The National Association of Manufacturers revealed in a recent survey that more than 80 percent of U.S. manufacturers face a shortage of skilled machinists, craft workers and technicians. Further, the U.S. Department of Education predicts that 60 percent of new jobs in the 21st century will require skills possessed by only 20 percent of the current workforce.

The Critical Talent Factor

Among the many threats affecting the global workforce over the next few years, the exit of "critical talent" could be the most damaging. Deloitte Consulting defines "critical talent" as the individuals and groups who drive a disproportionate share of their company's business performance and generate greater-than-average value for customers and shareholders. These individuals are "critical" to their company's ability to meet strategic goals and objectives.

"When we talk about critical talent, we are not necessarily referring to the 'A players' or senior executives," explained Mike Fucci, principal and U.S. leader of Deloitte Consulting's Human Capital practice. "Critical talent represents those individuals who possess highly developed skills and deep knowledge of not just the work itself, but of how to make things happen within a company, such as the couriers within package delivery companies who have daily client contact and direct knowledge of the supply chain, or researchers and clinicians within drug companies."

Unfortunately, few organizations have talent management processes in place to address the impending workforce shifts that will negatively impact critical talent segments. In fact, only half of the organizations surveyed by Deloitte Consulting have identified a list of the critical skills they need for future growth. Even more alarming, more than a quarter of respondents say defining critical skills as a workforce tool is "unimportant."

"Employers need to focus quickly on understanding which skills will make or break their business, where those skilled individuals will come from, and how to keep these workers engaged and committed within the organization," Fucci cautioned. "Only those organizations that respond swiftly and plan effectively will find themselves on top of these new challenges."

Talent Management Shortcomings

Traditional approaches to talent management frequently focus on acquisition and retention. When the talent pool tightened in the 1990s, companies responded by offering rich compensation packages and "hot skills" bonuses. The end result, however, was often disappointing — recruiting costs soared while investments in training languished. In addition, such compensation packages were often matched by competitors, contributing to high attrition rates of talented personnel.

Despite the changing landscape, organizations still plan to increase their investment in traditional talent solutions for 2005. Approximately 60 percent of survey respondents plan to increase experienced employee recruitment, while 42 percent plan to increase campus recruitment. Additional investment will also be given to rewards packages for experienced employees (39 percent) and new recruits (30 percent).

"Acquisition and retention strategies remain important parts of talent management. Such strategies, however, attend to the 'end-points' of the process and only offer a quick fix to these new workforce challenges," said William Chafetz, national practice leader of Deloitte Consulting's Organization and People Performance Services. "To survive the changing labor landscape, organizations must employ more comprehensive talent management strategies that reflect an understanding of critical workforce segments and satisfy the conditions those employees need to succeed."

Getting to the Heart of Talent Management

According to Deloitte Research, talent-savvy organizations build strategies around what matters most to their critical talent — their personal growth or development, their need to be deployed in positions and assignments that engage their interests and curiosities, and their connection to others in ways that drive performance for the company as a whole.

Many of the companies Deloitte Consulting surveyed seem to understand the importance of development and training their employees, with more than two-thirds (70 percent) of respondents planning to increase investments for mentoring and coaching in 2005, e-learning (64 percent) and classroom training (49 percent).

"It is a great sign that most organizations are committed to strengthening the skills and knowledge of their workforce, but they need to do more," said Chafetz. "No single part of the talent management process can sustain an organization or generate superior business performance on its own. Organizations must adapt a new way of thinking and use critical talent as a competitive advantage and a long-term investment."

"Develop-Deploy-Connect"

Deloitte is using the survey results to promote its "Develop-Deploy-Connect" model for talent management strategies, which focuses on the development, deployment and connection of critical talent. Combined with supporting programs, organizations that build strategies to develop, deploy and connect their critical talent generate the workforce contributions for superior business performance, the consultancy said, and when this happens, attraction and retention largely take care of themselves.

"Companies can avoid sustaining a direct hit from the looming talent crisis, and in fact convert these challenges into an opportunity, by rethinking and reinventing their talent management processes into a well-designed talent strategy that truly utilizes critical workforce as a competitive advantage and, therefore, differentiates a company from its competitors," Deloitte said.

Three Indians on Forbes 'Midas List'

Three Indian Americans, including debutant Ram Shriram who put his money into Internet search engine Google, are among top 10 investors on Forbes magazine's latest annual 'Midas List' of 100 best venture capitalists.

Shriram, an early investor in Google Inc that went public last year, was ranked sixth, while renowned Silicon Valley venture capitalists Pramod Haque and Vinod Khosla were ranked eighth and ninth respectively.

A member of the Google board since September 1998 and a partner at venture fund Sherpalo, Shriram was a co-founder of Junglee and has served as vice president of Amazon.com. He was an early member of the Netscape executive team.

Shriram "likes to call himself a Sherpa - helps entrepreneurs climb the peaks of Mount Nasdaq. Looking for university research to exploit", Forbes said.

The California-based Khosla, who is a partner at the well-known Silicon Valley venture fund Kleiner Perkins Caufield and Byers, had co-founded Sun Microsystems in 1982 and counts among the richest people of Indian origin.

Among his recent activities, he has endowed $5 million to his alma mater, the Indian Institute of Technology in New Delhi, and is starting a micro-credit programme for small units in India on the lines of Grameen Bank in Bangladesh.

Khosla is "semi-retired now, which means he's only working 80 hours a week", said Forbes, adding that he now proposes to fund projects that have high socio-economic impact.

These include protein arrays for low-cost medicine and micro-loans in India, besides investing in Zettacore, a chip company and one of a few nano-technology outfits in which he has faith.

Haque is a managing partner with Norwest Venture Partners. "Last year's number one dealmaker had a quiet year. His specialty - no-name networking companies that get sold for billions," Forbes said.

His old hits included parking funds at Cerent and CoSine, while his current investments include Amberpoint and Veraz .

Reverse brain drain worries US academics

"I love the traffic," says Prof Eduardo Glandt enthusiastically. "I love the honking as well. It's a nice ‘hey I'm there' sort of honking. A blind man would be able to drive easily," he adds. The Dean of the School of Engineering and Applied Sciences at the University of Pennsylvania, in Mumbai for the third time, loves most things Indian especially its students.


And he wants more. Prof Glandt was in the country primarily to recruit students. "Ten per cent of our faculty is Indian, 10 to 15 per cent of our students are Indian and we want more," he says. Indians are the second-largest ethnic group on UPenn's campus after Canadians. China, though not there yet, is a force to be reckoned with.

Despite being a university in great demand (the latest across-the-board rankings list UPenn at number 4), it has been marketing itself aggressively for the last three years because, as Prof Glandt says, "in a knowledge economy, the battle for the top brains is getting brutal".

A fallout of this competition that will go down well with Indian students, is more aid for foreign students. "That's the power of competition. When one university did it, all the rest had to follow, because we couldn't afford to have the best brains going to them," he says candidly.

Prof Glandt is more than familiar with the concept of brain drain, having moved to America from Argentina 31 years ago. "I was accused of not giving enough back, of betraying the fatherland," he admits. "But Argentina had no jobs for me and I had to go. In India, while opportunities for work and study may not yet be on par with the US, it is getting there. And that worries us," says Prof Glandt.

Part of making the US more attractive to foreign students is working with Congress on improving the visa situation, he says. There are indications of reverse brain drain as well. "This is happening more in China, but we've had an Indian professor taking a sabbatical to teach at home recently. We're worried for the first time," he says.

1 million IT jobs by 2005-end

India's information technology industry is estimated to cross Rs 1 lakh crore (Rs 1 trillion) in 2004-05 and employ over 10 lakh (1 million) knowledge professionals, according to National Association for Software and Service Companies.

"The Indian IT industry would cross Rs 100,000 crore ($28.3 billion) in 2004-05, thanks to the growth in IT-enabled Services (ITeS) and IT Services and Software," Nasscom president Kiran Karnik said.

The ITeS segment is expected to record a 20 per cent growth, up from 18.2 per cent posted in the fiscal year '04, IT services and Software is estimated to post 58.8 per cent (down from 59.4 per cent) and hardware at 21.2 per cent (22.4 per cent in FY'04), he said.

IT services and ITeS contribute about 78 per cent to overall industry, he said, adding that the size also includes hardware sold in India by multi-national companies.

Karnik also said that IT and ITeS sectors would emerge as the major contributors to the country's GDP, providing over 4 per cent in 2004-05, up from 3.5 per cent recorded in 2003-04 and a meagre 1.2 per cent in 1997-98.

On the employment of IT professionals, he said it would cross 10 lakh in the fiscal year '04, with software exports sector recruiting around 3.45 lakh (2.70 lakh in fiscal year '04), software domestic sector employing 30,000 (28,000) and software in-house captive staff recruitment rising to 3.22 lakh (2.90 lakh).

ITeS sector would be the largest employment generator, staffing around 3.48 lakh in 2004-05, up from 2.54 lakh jobs provided a year-ago, he said.

The Indian IT industry includes hardware, peripherals, networking, training, domestic and export market for IT services and products and ITeS-BPO segments.

On the recent trends in the sector, Karnik said the industry would exceed its target of 30-32 per cent in exports to around 34-35 per cent in FY'05, and was likely to witness a domestic IT market upsurge.

The domestic IT market upsurge would be due to the localisation of software by Microsoft Corproation and Red Hat, he added.

An increase in mergers and acquisitions - like the merger between eBay and Bazee.com, IBM-Daksh, Patni-Cymbal and Flextronics-HSS - are also likely to take place, he said.

A return of venture capitalists, who had fled after the dot.com burst, an increase in the presence of MNCs, and the country emerging as an R&D hub are also on the anvil, he said.

Emergence of global sourcing, resulting in India increasingly becoming a market place is also in the offing, he added.

However, India needs to focus on building delivery capabilities in low cost geographies, operational excellence at the activity, function and business levels, consultative selling capabilities to complement existing relationships among others.

"Security is the main concern. However, the solace is that it is a concern across the world. India should also focus on improving infrastructure," Karnik said. Lack of proper infrastructure is plaguing the growth of IT industry in India, he said.

Indian Institute of Management - Bangalore to take in more students in '05
This could be good news for aspiring students wanting to get into the Indian Institute of Management (IIM).

More students are expected to get admission in the coveted IIMs this year as IIM Bangalore has decided to increase its intake this year.

The institute, which has a current capacity of around 185-190 students will increase its total seat strength to around 250 from the session starting 2005 onwards.

The move could impact the total intake of other IIMs as well. The rise of around 60-65 seats this year has been the result of the addition of a new section of around 65 seats to the existing infrastructure.

IIM-Bangalore has been keeping its intake lower than the other top three IIMs—IIM-Ahmedabad, IIM Lucknow and IIM Kolkata. While IIM Ahmedabad has 250 seats in PGP in management, IIM-Lucknow has 240 seats. IIM-Kolkata on the other hand offers a total of 250 seats.

The two other IIMs at Kozhikode and Indore have 120 seats each.

For 2005 Grads, Job Offers Are Rolling In

After three slack years, employers across a range of industries have headed back to campus in US
When Katherine Ho returned for her senior year at the University of Michigan in August, she was busy with more than classwork. Within weeks the 21-year-old mechanical-engineering major had plunged into a whirlwind of on-campus job interviews with nearly a dozen companies, from Boeing to General Electric to DuPont . By early September she had her first job offer -- and earlier this month she settled on another, accepting a spot at GE Aircraft Engines. Many of her friends already have offers, too. Having watched the Class of 2004 struggle to find work, Ho was plenty relieved. "It was easier to get interviews," she says. "And I was surprised there were more job openings -- it was definitely hard last year."

After three years in which many college grads found jobs scarce, the picture seems to be brightening for next spring's 1 million-plus grads. A study of 582 companies conducted by Collegiate Employment Research Institute at Michigan State University showed that companies plan to expand hiring of grads by 20% over last year; better yet, average pay could rise 4% to 7%. And the change appears to be across the board: Industries ranging from investment banking and health care to retail and real estate say they'll recruit more heavily on campus this year.

Of course, that 20% surge looks particularly good when compared with the dismal performance of recent years. College hiring last spring was up only about 5%, according to the Michigan State survey. In 2003 job growth was flat -- following a combined 50% contraction for the two previous academic years. "We're not back to the dot-com era," says Lois Meerdink, assistant dean for business-career services at University of Illinois at Urbana-Champaign. "But the trend is definitely heading up."

PENT-UP DEMAND 
Why is corporate America back on campus? Forecasts for continued solid economic growth account for some of the gains; just as important, many companies can no longer continue to put off hiring for jobs left empty through attrition. Add to that the expectation that Baby Boomers will start retiring in a few years, says Phil Gardner, author of the Michigan State survey, and companies have "a human-resources gap to fill." What's more, sectors such as consulting and investment banking figure business will pick up in 2005.

Investment banks are recruiting aggressively. Goldman, Sachs & Co. (GS ) plans to hire about 1,100 grads this year. That's a fraction of the level at the peak of the bull market in 2000, but it's up a fifth from last year. Like other investment banks, Goldman is moving early to get the best talent. Aaron Marcus, its director of campus recruiting for the Americas, says Goldman finished interviewing seniors in October and made most offers within a week or two of the first meeting.

It's too early for undergrads to breathe easy, though. If the economy slows in coming months, recruiters could vanish once again. Still, for Katherine Ho and many other students with jobs waiting for them, this is the best news in a while.

Are You Google Employee Material?
what does it takes to be a google employee

A strong brand, hot IPO and an intense engineering culture help make search advertising company Google a dream employer for a lot of people. Now, a new aptitude test Google is circulating purports to find the best and brightest. But is it really a brilliant ad campaign?

On Thursday, Alan Eustace, vice president of engineering and research for Mountain View, Calif.-based Google, published an aptitude test for "uber-geeks."

The 21 GLAT questions include engineering brain-twisters such as, "Consider a function which, for a given whole number n, returns the number of ones required when writing out all numbers between 0 and n. For example, f)13)=6. Notice that f(1)=1. What is the next largest n such that f(n)=n?"

One question asks: "What's the coolest hack you've ever written?" Another says: "What's broken with Unix? How would you fix it?"

The test is also heavy on the sort of twee humor that characterizes Google's public persona. "This space left intentionally blank. Please fill it with something that improves upon emptiness," one question implores.

A question with multiple choice answers states: "You are in a maze of twisty little passages, all alike. There is a dusty laptop here with a weak wireless connection. There are dull, lifeless gnomes strolling about. What dost thou do?"

"We're a little obsessive about digging into hard computing problems, and we love finding more people like us," Eustace said in a note on the corporate site. Acknowledging that such tests often "suck," he offered, "What if there were a standardized test that led, like, immediately to the really cool job?"

The test also ran as an insert in print magazines, leaving some observers to conclude that the GLAT is an extremely clever ad.

"Pre-employment testing is a science, and [the answers to these questions] are not very objective data," said Sean Lally, an Encinitas, Calif.-based technology recruiter. Lally said he saw the GLAT as a recruiting ad for engineers. "It's a help-wanted ad designed to show they have a sense of humor and are not just about making tons of money," he said. The ad is designed to show that "Google is very much an engineer's company, but they're still irreverent and fun."

Lally doubted that Google hiring managers would pay much attention to the answers -- even though they could uncover people without a sense of irony. "[Hires] are going to be based the quality of the resumes," he said. "Somebody who has real cultural issues might not get half of the jokes, but if he has a Ph.D. from MIT in the specific type of technology they need, they won't care if he doesn't get any of the cultural stuff."

Wannabes are invited to print the Google Labs Aptitude Test, or GLAT, complete it, then mail it back with their resumes. "Score high enough," Google promises, "and we'll be in touch." In other words, don't call Eustace, he'll call you

Job interviews: What not to say

1. Don't pick a fight with the interviewer. Example follows ...

Applicant: "So you are making a decision this week?"

Me: "Well, no, I don't think so. I'm narrowing down ..."

Applicant: "This is outrageous. I was told that you would decide this week!"

Me: "I'm sorry if there was a miscommunication. I'm hoping to reach a decision soon, but there are still some interviews ..."

Applicant: "This is extremely unprofessional and unacceptable ..."

Me: "All right, listen. If you came in here and knocked my socks off, sure, I might have made a decision this week. But you didn't, so goodbye."

A shame really. The person was on my short list up to that point.

2. Don't argue like you already work here ...

Me: "That's an interesting story pitch. But it's very legalistic. You see, for our readers, you really need to identify the points in the process where investors can get a clue about buy, sell or hold."

Applicant: "Well, now you're just thinking like an editor."

Sigh.

Hey, it's not all me. The deputy managing editors here do some interviews too.

3. Know what you want to do (or at least make the interviewer think you do).

Deputy: "So do you want to work here or not?"

Applicant: "I'll let you be the judge of that."

/*
My friend actually did say this during an interview with a consulting firm. Needless to say, he wasn’t hired.
*/
Interviewer: "Where do you see yourself in 5 years?"
Interviewee: "In your chair!"
**************************************

/*
Aren’t we all human?
*/
Interviewer: "What are your weaknesses?"
Interviewee: "I have no weaknesses. I am always right and never make
mistakes. I always get the job done right."
Interviewer:

Foreign-student enrollment declines in US

New foreign-student enrollment in U.S. graduate student programs dropped this fall, according to two recent reports.

The decline is sure to fuel heated debates about the role of international students in U.S. graduate programs, whether a technology talent shortage looms and how to preserve the country's long-term technological leadership. Foreign students make up a large chunk of the students in U.S. graduate programs in technology-related fields.

In a report released Wednesday, a coalition of education groups said more than half of the U.S. doctoral and research institutions that responded to a survey reported a decline in new international graduate enrollments this fall.

The study follows a report last week from the Council of Graduate Schools, which found a 6 percent decline in first-time international graduate student enrollment from 2003 to 2004. First-time enrollment from China decreased 8 percent and from India 4 percent. Following a decade of steady growth, the number of first-time international graduate students studying in the United States decreased between 6 percent and 10 percent for three consecutive years, the council said.

The fields of life sciences, business and engineering saw the steepest declines in foreign-student enrollment, while physical sciences was the only field that showed an increase in first-time enrollment, according to the council.

"The three primary factors leading to declines in international graduate applications, admits and enrollment are increased global competition, changing visa policies and diminished perceptions of the U.S. abroad," Council of Graduate Schools President Debra Stewart said in a statement. "While these numbers are distressing, the declines are not nearly as great as some had feared."

The coalition of groups behind Wednesday's report is composed of the Association of International Educators (NAFSA), the Association of American Universities, the Council of Graduate Schools, the National Association of State Universities and Land-Grant Colleges and the Institute of International Education.

Skeptical, stressed, scared, sucked dry IT Workers
Slashed resources and impossible demands have caused IT morale to disintegrate
Skeptical, stressed, scared, sucked dry. This is how IT professionals feel about work these days.

Other telling words that surfaced repeatedly during more than 30 interviews and in 200 written survey responses include fear, loathing, disgust and dread.

To be blunt, IT worker morale sucks, and it's getting bleaker by the day.

"It's the worst I've ever seen," says a 22-year IT veteran in the banking industry. "Morale is twice as low this week as it was last week."

Research backs up that claim. In June, nearly three-fourths of 650 companies surveyed by Meta Group Inc. reported having morale problems among their IT staffs. The year before, two-thirds of executives cited poor worker morale as an issue.

No wonder spirits are plunging. The U.S. technology sector suffered yet another round of widespread layoffs during the third quarter, according to a recent report by Chicago-based recruiting firm Challenger, Gray & Christmas Inc. "High-tech job cuts are on the way up as the end of the year approaches," says CEO John A. Challenger.

Job cuts in technology jumped 60% between July and September to 54,701, compared with 34,213 layoffs in the second quarter, the report said. To make matters worse, the growing number of layoffs is not being countered by any move to hire, Challenger says.

And job insecurity is just one part of the problem.

Image Credit: Jonathan Weiner

Boosting morale should be near the top of almost every CIO's strategic agenda. But before management can devise strategies to address the problem, it must truly understand the causes of IT workers' misery. Frequently, it's not about money or challenges. Instead, workers point to slashed resources, unrealistic expectations, willfully blind management and inane policies and procedures as some of their biggest pain points.

These factors engender fear, exhaustion, bitterness and resentment, all of which blunt innovation and productivity. They can also cause long-term harm to workers' overall health, according to some experts.

In a 2004 Computerworld survey of 9,854 IT workers, 88% of the respondents said they experienced some kind of stress at work.

"We now know from research that in a work environment where there are a lot of pressure and demands and where people have very little control that substance abuse is two times higher, that heart problems and back pains are three times higher, that there's a greater rate of infections and mental health problems," notes Michael Koscec, president of Toronto-based Entec Corp., which specializes in measuring employee satisfaction and commitment at large companies

continued>>

India Inc. is Twice as Fast as Japan Inc.

It took Japan Inc. more than 30 years to obtain a strong position in key U.S. industries, such as Automotive and Consumer Electronics. It will take half as long for India Inc. to do the same for service-oriented industries with IT leading the charge.

The Bottom Line: India’s rise in IT and other areas means U.S.-based companies must radically change their view of competition and what becomes strategic domestic employment.

What It Means: The term India Inc. has been thrown around in the popular press for the last year as an embodiment of the new competition arising from India in IT and other areas. For manufacturers, this has a similar resonance of Japan Inc., a term that came about in the 1970s as Japan attacked key U.S. manufacturing industries, including Automotive, Steel, and Consumer Electronics. Unfortunately, many U.S. and European companies continue to underestimate the impact of India Inc. and have not made the needed changes to their business and employment models.

The fastest change is occurring with the major software vendors that have moved much of their core product development to India. For example, nearly all of SAP’s BW product development and much of NetWeaver resides in India. Oracle and PeopleSoft have accelerated deployment of Research and Development (R&D) and support resources in India; Oracle has more than 6,400 people now employed in India and plans to have nearly 10,000 by the end of 2005.

Some companies, such as Kana, have taken an extreme view and have sent all R&D to India. Venture capitalists require that any startup have a plan and capability to deploy R&D in India. While technology-oriented companies have embraced offshoring, most end-user organizations continue to be cautious about how much and how fast they can offshore IT operations. In the next few years, however, their internal IT cost models will prove too high and force them to change.

With this hypergrowth in job openings comes an equal focus in education. Potential IT workers are not waiting for jobs to come their way, but are instead fostering a fast-growing base of colleges and trade schools offering comprehensive and inexpensive technical education and certification. Local and national newspapers are full of ads for such training.

Like Japan Inc., one of the initial attractions of India Inc. is low-cost labor. Ironically, India offers lower cost labor than Japan ever did, but higher quality than is delivered by many companies today. This paradox is not readily understood and is why many U.S. and European companies continue to ignore the potential of India Inc. Indian software companies hold the highest number of Level 4 and 5 Software Engineering Institute-Capability Maturity Model certifications, which is the software equivalent of Six Sigma certification for defects in manufacturing.

Along with this enhanced quality comes enhanced delivery of value. The perception that India is only capable of low-cost, tactical work is as true as the false perception that the Japanese cars of the 1980s were cheap U.S. knockoffs. The establishment of low-cost offshore delivery centers in India for traditional IT service providers / Systems Integrators (SIs) is well underway, as are business processing outposts for all the services industries (Financial, Telecommunications, Legal, Engineering, etc.).

And unlike many of their U.S. and European counterparts, upwards of 50% of all SI/ Business Process Outsourcing (BPO) jobs are profitably taken with a fixed price bid. The high stock price of many Indian offshoring companies, as well as pre-tax margins in excess of 20%, illustrate that these companies have management expertise and execution quality.

Conclusion: The availability of inexpensive and reliable network and computing technology implies that any job or task that does not require the physical presence of a person can be sent offshore. India followed by others, including China, Eastern Europe, Russia, the Philippines, and Vietnam, are creating a sophisticated pool of highly specialized and educated workers who have shown the ability and willingness to deliver high-quality, low-cost work. Using many of Japan Inc.’s techniques of continuous improvement, quality circles, and process innovation, India Inc.’s 30% annual growth in IT services is being replicated in other service industries. U.S. and European companies need to reevaluate their worldwide employment models to ensure that they can benefit from India Inc. rather than be consumed by it. U.S. automakers and consumer electronics firms ignored Japan Inc. for decades until it was too late to recover; IT and other service providers do not have nearly as much time to recover from a similar misjudgment.

Offshoring company looks to make programmers obsolete
One of Indias biggest offshoring players has launched software that converts legacy applications to modern programming languages.

Mahindra British Telecom (MBT) said the software almost completely automates the process of converting legacy applications written in languages such as Cobol, Pascal, Delphi and Smalltalk to modern languages such as C, C++ and Java.

The company is a joint venture between Indian technology group Mahindra & Mahindra and BT Group. It has development centres in the UK and India and specialises in applications outsourcing and offshoring for the telecoms industry.

Such a system would help many companies still lumbered with software from the 1970s and 1980s, which has to be maintained by specialised staff familiar with the legacy systems. MBT cited Gartner Group figures estimating that 70% of all business and commercial applications are based on Cobol.

MBT claims its automated system reduces the human factor of converting legacy code by 90% and ensures "zero-error" quality. This is possible because any programming language can be abstracted to a few fundamental principles, MBT said.

The company said it carried out an automated conversion for a Scandinavian telco in six months, for a project that ordinarily would have taken 75 man-years. The automated conversion took less than a day, with the rest of the time devoted to tweaks by a small team of 10 specialists, MBT said.

In theory automated conversion is feasible, but in practical terms the code produced is so bloated as to be useless, according to John Harvey, lecturer in computing science at the University of East Anglia.

"This type of technology has been around for years, and it is only any good if, for example, the Java produced is quick and usable," Harvey said. "It could be unstructured garbage which is impossible to maintain and slow."

The system is designed to convert one procedural language to another, for example Cobol to C - or one object-oriented language to another - for example Delphi to C++. Converting from one paradigm to the other can only be semi-automated, MBT said.

MBT said the converter had completed initial trials but didn't give a launch date.

The Impact of Indian Boom
Pros and Cons of Indian Economic Boom

While the growth in offshore business service imports is beginning to cause a stir in the United States, it's leading to dramatic changes in the Indian economy and society.  Professors at Emory University and its Goizueta Business School who know India well say that they have seen tremendous economic and social changes in this huge nation since the service boom began just a few years ago, and they predict even greater changes and challenges in the years ahead.

 

India today feels a bit like the U.S. during the dotcom boom, Goizueta’s India-watchers say, where a small class of young people are suddenly making much more money than most people had ever dreamed. Although the new industries don’t employ all that many people – most estimates say IT and business process outsourcing employs fewer than a million workers in this nation of over 1 billion – this sector’s success has had an enormous impact not only on the economy but on the country’s culture and self-confidence.

 

One key indication of the magnitude of the shift: India’s foreign exchange reserves have grown from almost nothing to about $100 billion in just two years – a huge number for a country whose gross domestic product is forecast to reach $650 billion in the coming year. “Things are changing very quickly, and the pace of it does surprise me,” says Joy Mazumdar, an Emory economist in the Department of Economics.

 

In the cities, the boom is changing the texture of daily life. “When I lived there, there were no such things as malls and now there’s a new one opening every month in the big cities. You can go in and get almost anything you get in the United States, which even 10 years ago wasn’t possible. Even five years ago in my hometown of Calcutta there wasn’t anything like this,” observes  Sudipta Basu, a professor of accounting at Goizueta.

 

Another indication of change in the subcontinent’s zeitgeist: ten years ago, the top-rated shows were serials based on Hindu religious themes –  the Hindu equivalent, Basu says, of Mel Gibson’s film about Jesus. These days, he notes, the big hit is the Indian equivalent of Who Wants to Be a Millionaire?

 

And all this may be only the beginning.  In a November 2003 interview in an Indian business newspaper, the Business Standard, Y.V. Reddy, governor of the Reserve Bank of India, India’s counterpart to Alan Greenspan, said that the country is “on the threshold of a high growth trajectory.” His best guess: 8% growth over the next two to three years.

 

Western companies are drawn to India today as a way to cut costs in all kinds of business processes, from IT development to claims-processing, and from call centers to tax-return preparation. But Richard Metters, a professor of decision and information analysis, cautions that the cost savings is not as dramatic as one might expect in a country where the latest government figures peg average per capita income at 10,964 rupees – about $243.

 

“The wage comparison is misleading,” Metters says, because low wages create other expenditures Western companies typically don’t consider. “You can get a worker for a tenth of the wages in the U.S., that’s true, but somebody who makes $3000 a year can’t afford a car, so they can’t get to work. So you have to hire drivers to pick them up and bring them to work. And somebody who makes $3000 a year can’t go out to lunch, so you have to have a subsidized employee cafeteria that feeds them.” Also, Metters says, the weak infrastructure means that companies need to spend more on telephone lines and backup generators, and the country’s ongoing political tensions with Pakistan mean greater expenses on security than is typical for a Western company. Extensive training, such as accent neutralization classes and crash-courses in American geography, increase costs as well.

 

The upshot: a savings of only about 25%, he estimates. But the quality is often good, he says, as college graduates typically take the call center jobs, which are considered good and even prestigious posts. And 25% is a significant savings for companies that watch every penny.

 

It’s probably also just the beginning. After all, these college graduates can do much more than answer phones. In services, Goizueta professors say that India has tremendous numbers of skilled professionals. Consider accounting, for instance. India’s accounting schools produce about 50,000 new accountants every year, according to some reports. By comparison, the American Institute of Certified Public Accountants estimates the U.S. turns out about 35,000 new accountants. And not only are the numbers large, but the quality is good:  Basu says that the exams Indian accountants take are tougher than the U.S. CPA exam. 

 

The situation is similar in other professions. Indian nurses and doctors take jobs all over the world. India produces about 290,000 engineers every year, roughly the same as the number that graduate in both science and technology in the U.S. The largely Hindu country even exports Catholic priests, according to Jagdish Sheth, a professor of marketing at Goizueta.

 

Sheth, who maintains close ties to India and serves on the boards of several leading Indian companies, sees many areas in which there are huge opportunities for India’s skilled workers, particularly in science, pharmaceuticals, and agricultural science. In science, for instance, scientists are paid about a tenth of what they are paid in the U.S., says Sheth. This is more than double the differential between call center employees in India versus the U.S.

 

But most professors expect growing pains as the country develops. While most Indians now feel that the country as a whole is benefiting from the service boom, Mazumdar says the growth in income inequality could lead to social trouble down the line, as software developers receiving salaries approaching Western standards try to live side by side with people getting along on several hundred dollars a year. “In certain cities, especially in cities like Delhi and Bombay, it does create this big discrepancy between people,” cautions Mazumder. “It drives up real estate prices and things like that. It has not exploded, at least not yet.”

 

Sheth says that the numbers of women entering the back office outsourcing is also likely to create major social challenges in a country where educated women traditionally did not work outside the home. “Now they have become a significant part of the workforce, especially in call centers, which is creating enormous cultural challenge and change,” he says.  His analogy: Japan in the late 40s, when the U.S. and Emperor Hirohito drove a complete change in women’s role in Japanese society.

 

For its neighbors, India’s growth may be leading to massive changes as well – some positive and some not. Nazrul Islam, an Emory economist originally from nearby Bangladesh, says that Bangladeshi IT firms look to India as a model, and are now even hiring Indians to train their programmers. “That’s the hopeful side,” he says.

 

However, Islam does see one worrisome trend: he fears India’s success may be going to its head. “For the small [neighboring countries] India was always perceived to be a sort of a big brother – not in a benevolent sense…and India’s economic success will probably accentuate that.”    One example: the Indian government’s national river-linking project, a plan to divert many of the country’s eastern rivers to the drier western and southern parts of India. “And they’re going ahead with this project with total neglect of what will happen to Bangladesh, which is the lower riparian country and a smaller country,” he says.

 

Infrastructure remains a key problem, despite gains in recent years. As the prominent emerging markets investment guru Marc Faber told an Indian newspaper recently, "Infrastructure has improved from horrible to very bad."  Electricity, roads, and even such basics as the quality of paper money  (the Reserve Bank of India recently began a campaign to replace notes that have been stapled together in bundles) remains a problem. Metters says that most development is concentrated in self-contained campuses, in which each company has its own security, back-up generators and telecommunications systems. The number of these “islands” is growing, he says.

 

“You see this gleaming office tower housing all these people, and right outside of that gleaming office tower is garbage in the street and a dirt road and an ox pulling a cart," observes Metters.

 

Mazumdar notes that the lack of infrastructure is probably one reason the service exports have grown more quickly than manufactured goods.  For example, goods that might ship out of China in hours can take up to 18 days to leave India, he says. “But with service exports, things were very, very different because you did not have these transportation hurdles. All you had to do was send it along on a phone line or a satellite link.”

 

The growth of cities, which generally occurs as a country industrializes, could also create difficulties. Sheth says that he is now trying to encourage companies to keep workers from migrating to India’s gigantic, crowded cities. One positive aspect of the service boom is that it should be possible, through local governmental incentives, to locate call centers and other plants in smaller communities.

 

Wage inflation will be a challenge as the number of educated, English-speaking workers is absorbed, says Sheth. Negotiating a new role for women is also likely to be contentious, he warns.

 

Finding jobs for India’s billion plus people is another key challenge that the service boom has thus far not addressed.  To employ its young and growing population, Sheth says that country needs to look outside its service-sector base and export more manufactured and agricultural goods. He says that there’s a lot of potential in these sectors. For instance: India has the largest dairy industry in the world, but doesn’t export any of its dairy products. However, things may be changing. Now, he says, a farmer’s cooperative he spoke to last year about the idea has just concluded a contract with Wal-Mart. 

 

Mazumdar says he expects that the current neat division between India as a servicing hub and China as a manufacturing powerhouse will change. “If these had been fairly small countries, I would say, this specialization is going to continue in the future, but given that these countries are large, there’s enough of a variety of talent that they should actually be able to have a very diversified export portfolio.”

I want to be an MBA

Graduates today want to be an MBA, but have little idea what a manager really does.
“I want to be an MBA," is probably one of the most hackneyed and trite comments of the graduating youth of recent times.

Graduates today want to be an MBA, but have little idea what a manager really does.

Most students are attracted to a management education at top business schools because of the high pay packets they get at the end of it.

Sure, it is a brilliant career to pursue, but if your ultimate aim is to stuff your pockets, you might just cut a sorry figure in your future life or, for that matter, even in your Group Discussions or interviews.

continued..

American Visa Hurdles for International B-schools aspirant
Business schools are doing their best to help foreign students through Americas tougher visa process

After Nadim Saad got his MBA from INSEAD in France last year, he planned to go to the Wharton School in Pennsylvania on a two-month exchange programme. But Mr Saad, a Mexican national who was born in Lebanon, never made it. As his classmates left, his visa was still being processed at the American embassy in Paris, forcing him to reschedule his flights to America every few days. Mr Saad says he was told that his visa would arrive on time, but it never did. In January, the embassy told him that because the exchange programme (whose dates he had already rescheduled) was over, it would not grant the visa.

continued...

 

 

Fresh engineer at wipro ? Pay Rs 75,000!
Bangalore-based Wipro Technologies has a novel way of keeping its employee attrition rate under control.
While most infotech companies ask their prospective employees to sign bonds, Wipro wants new recruits to plonk a Rs 75,000 refundable deposit on the table before they can collect their appointment letters.

Such a drastic measure was warranted by the fact that nearly 50 per cent of new recruits were flying the coop after their training programme.

"The Rs 75,000 deposit will discourage those who join us only for our training programme," said Bijay Sahoo, Wipro's vice-president and global human resources head.

The deposit system, which works through a tripartite agreement between Wipro, the candidate and a bank, requires the employee to deposit the money in the bank directly.

The deposit, along with the interest on it, is refundable when the engineering graduate completes 12 months with Wipro after the three-month training period. Science graduates, who undergo a six-month training period, have to wait 18 months to claim their refund.

Those unable to put down the deposit have the option of taking a Rs 75,000 loan from the bank, for which they will have to pay interest. At the end of the period, they can claim the deposit amount as well as a retention bonus as compensation for the money they lost by way of interest.

The agreement was introduced in April 2004 and has been used for two placement seasons now. Wipro claims it has had no impact on its campus recruitment.

"All other companies in the industry get their employees to signs bonds and other agreements. So we are not doing something that nobody else is. Our placement has not suffered at all under this tripartite agreement," said Sahoo.

What i think about it ? It is Just another example of slavery in modern world.