The 29^th CSSI Endowment Lecture, IIT Madras

“Improving Productivity” by Mr K. Ananth Krishnan

 

The 29^th IIT Madras CSSI Endowment Lecture, IIT Madras, was organised this year by the Department of Management Studies. This edition of the annual lecture series saw the presence of Mr K. AnanthKrishnan, CTO, TCS as the Chief guest, Prof. K. Ramamurthy, the Dean(Academic Courses) at IIT Madras, Mr V Thiagarajan, Vice-President – EFSI

Prof G Srinivasan, HoD, DoMS, welcomed the guests and gave an introduction of the department. With over 140 MBA students, 100 plus research students, 24 faculty members, DoMS encourages student initiated entrepreneurship. Talking about Productivity and Technology, he said that productivity, in simple, can be defined as input required to produce per unit of output; while mentioning technology, he said that it has brought speed, but he questioned whether would it be possible to increase productivity at the same pace. He also said that India is moving towards services, and hence, production in services should not be ignored.

Prof. Thiagrajan highlighted EFSI and its work. He said that following the steps of ILO (International Labour Organisation) which required organisations that specialized in industrial relations, labour policies, labour management etc., in separate countries, Madras Labour Union was founded in 1918. EFSI has its presence in 4 southern states of India, and during its Golden Jubilee in 1970, the Endowment Lecture series was commenced.

Prof. Ramamurthy then took over the stage and gave a brief introduction about Mr. K. Ananth Krishnan, who joined TCS in 1988 and is currently serving as the CTO, India. He is also the head of Corporate Technical Board and a consultant for various companies. The lecture that Mr.Ananth Krishnan delivered was titled “Improving Productivity”

Mr.Ananth Krishnan commenced the lecture by defining productivity as the ratio of useful output per unit of input. He mentioned that productivity can have various definitions, and these definitions extend from individual to group, to firm, to industry and nations. He said that it is useful to correlate Quality to Quantity for any unit process. But in case of aggregate processes, economic factors should not be ignored. He also explained how important measurement and analysis were for success. Now, considering measurement, he said that there are two ways of carrying it out

1.       Standard metric : here we simply consider single factor like unit cost.

2.       Portfolio metric: which constitutes the aggregation of multiple factors like employee economics, customer economics etc. We eventually carry out factor analysis from this.

He said that since a number of factors are beyond any individual’s capabilities. the biggest problems that companies face is: how to judge R&D production? He also mentioned that investment in R&D sector form just 1% of the total GDP of India, which is not a very encouraging figure. Though, he said that, the economic cost of doing research(i.e publications per unit cost incurred) in India is among the lowest in the world.

Moving on to analysis, he explained by giving a very simple example: If we consider single factor analysis, we shall find that the output per unit input, or turnover decreases as we move up in the seniority level ladder. This does not give a very clear picture, and thus, we need to enter into the next level of detail and consider factors like value addition, experience etc.

After highlighting Measurement and Analysis, he moved on to the very stimulating topic of Customers. He said that since the customer is of the highest priority for any business, the need arises to classify them properly. There are 2 major categories in which customers can be broadly divided : Low maintenance customers and High maintenance customers( further categorized to direct and indirect). Any organisation needs to have a good proportion of both these types, as each is important for the organisation’s success.

The first type of industry that Mr Ananth Krishnan explained was manufacturing. He stated that any manufacturing company has broadly the following main functioning areas:

Supply Chain Management: includes inbound requests notifications, monitoring the production information and cash flows etc.

Dash Board: KPIs, plant efficiency, work-order backlogs etc.

Inventory: includes checking material stock levels, floor inventories, shelf life alerts.

Real Time manufacturing: Downtime notifications, threshold based alerts, monitoring KPIs on real time, production status on the go etc.

Changeover notifications: consists of threshold based alerts, predictive notifications to prepare material parts at the right time.

Warehouse: Shelf life notifications, tracking of high valued products etc.

Quality: Rejection alert notifications, production decision making, maintenance requests.

Maintenance: receiving maintenance alerts or tickets, access to equipments history, troubleshooting, engineering drawing, part details, parts ordering etc.

He stressed on the procedure applied to proceed with challenges, the first step being identifying the biggest challenge and coming up with a list of all the challenges. And then, carrying out the Drill Down procedure shall help dealing with such challenges.

He drew a similar analogy taking into consideration the Insurance Value chain, which again consists of 12 different areas like product development and pricing, marketing and sales, underwriting, risk management, information technology, legal etc. Here, an approach of Balanced Improvement and application of Predictive Analytics becomes important along with carrying out drill down. Similarly, he talked about the IT Industry and the importance of further automation in this sector too.

Mr Ananth Krishnan highlighted that there are 3 pillars on which the Productivity of our country is based:

1.       Having a framework to institutionalize different areas and prepare a balanced scorecard

2.       Having a systematic innovation process in productivity, which involves continuous improvement, transformations and descriptions.

3.       Creating a culture that encourages people to be more productive. He called it “Culture of Creative Dissatisfaction”.

He concluded the lecture by asking us to adapt to “Big-box perception” and develop organisational capabilities. He also said that using social networks in a enabling manner is as essential as searching for ideas.

The entire lecture was extremely insightful and motivating, and presented a very clear idea about the current state of productivity in India, and how it can be increased manifold. It was indeed a pleasure for the audience to listen to Mr Ananth Krishnan.

Release of India Venture Capital and Equity Report 2011

This edition of MBA Invitation Lecture Series(MILS) saw the release of “India Venture Capital and Equity Report 2011” authored by Assistant Professor Thillai Rajan A. and Maulik Doshi, co-authored by Josephine Gemson, on 15^th November 2011. The release of 2011 India Venture Capital and Private Equity Report, follows the successful release in 2009 and 2010. This report concentrates on Private Equity (PE) in the Real Estate and Infrastructure Sectors and presents the most comprehensive analysis till date. Specifically, it addresses important questions like: What has been the impact of PE investments in these sectors? What types of projects are being funded? Has PE involvement in these sectors been beneficial? How?

The report was released by Prof. Bhaskar Ramamurthi, Director IIT Madras in the presence of Chief  Guest Mr. J.P. Nayak(Chairman, SumInfra 2011, Advisor to Chairman, Larsen & Toubro, former President Larsen & Toubro), guest of honor Mr. A. Ramakrishna(Director International Infrastructure Consultants and former President and MD Larsen & Toubro), special guest Mr. S. Prakash(Chief Operating Officer, IL & FS Water Group) and Prof. G. Srinivasan, Head of the Department of Management Studies, IIT Madras.

The event was inaugurated with a speech by Prof. G. Srinivasan who highlighted the progress of Department of Management Studies since its inception. His enlightening speech was followed by a short talk by Mr. A. Ramakrishna. He emphasized on the success of Public Private Partnership(PPP) in the infrastructure sector. He also stressed on the importance of improvement in infrastructure for catching up with countries like China. After Mr. A. Ramakrishna’s informative dialogue, Prof Bhaskar Ramamurthi took over and shared a few insights. He said that there is a lot to fix in spheres like land transactions, infrastructure, etc. and that it is important to develop advanced techniques to bring about a change.

Following the speech by Prof. Ramamurthi, Assistant Professor Thillai Rajan A. presented the significant findings of the report. During the period 2006-2010 (which happens to be the study period of the report), the investment has increased in galloping numbers both in real estate and infrastructure sectors. Also, two-thirds of overall private equity goes into these two sectors. The impact of these investments has been humungous. This was elucidated by quoting figures of land development, constructed space, roads built, etc. He summarized by saying that if capital goes far, private equity goes further.

Chief Guest Mr. J.P. Nayak also shared a few thoughts. He said that the government has to take initiatives for developing infrastructure, which can be done by implementing effective policies. There is a huge interest among investors to invest in this sector which has to be capitalized. Growth in infrastructure sector is important to sustain the large growth that India is experiencing now, he said. Following his address, was a speech by our special guest Mr. S. Prakash. He compared India with China in terms of Infrastructure and shed some light on the positives that India has over China. He said that the biggest edge that India has, is a robust contractual framework. On the flip side, when it comes to the cost factor, delivery cost of Infrastructure in China is lesser than India. While concluding, he highlighted certain key points that can help India develop in this sector in the future, most important ones being educating the masses about Infrastructure, and developing institutional capacity.

After the discussion, Prof L.S. Ganesh, Dean(Students), IIT Madras presented mementos to the guests and spoke a few words. He advised the young generation to be serious for their purpose, and to be disciplined, energetic and enthusiastic. The session was concluded by a vote of thanks by Mr. Maulik Doshi. The MILS team congratulates Asst. Prof. Thillai Rajan A., Maulik Doshi and Josephine Gemson for the successful release of the report.

By

Aditya Ghai

MILS

Batch of 2013

Rendezvous with an “Accidental” Entrepreneur

Department of Management Studies, IIT Madras was proud to host the senior VP of Walmart Global E-Commerce, Anand Rajaraman as a part of the MBA Invitation Lecture Series on 11^th November 2011.  He is an alumnus of IIT Madras and co-founder of companies like Cambrian Ventures, Kosmix and Junglee.

The lecture was about his entrepreneurial journey, how he accidentally became an entrepreneur and then never looked back.  He started with a reference to the movie “The Social Network” and like the movie, his lecture was a series of anecdotes.

Anand captured the attention of the audience with the story of his two phased career. Phase I started with his pursuing B. Tech from IIT Madras, MS & PhD (from which he dropped out in 1996 and went on to complete it during the period 2000-2001) from Stanford in Computer Science. For his research project in Stanford, Anand had to create a virtual database by integrating data from multiple databases. He used corporate databases for this but was fascinated by the data available on the web and wanted to use it for his database. Internet inspired him to form a company with three co-founders and that’s how an academician became an entrepreneur. Anand decided to drop out of college to work on his inspiration and Junglee was born in 1996. The company had customers like Yahoo, The New York Times, The Washington Post, etc. It was acquired by Amazon in 1998 and he became the director of technology at Amazon.com. Second phase saw him completing his thesis post which he became a faculty at Stanford in the computer science department.

His advice to the budding entrepreneurs was to be persistent, mantra being “If at first it doesn’t work…. pivot”. If the initial idea doesn’t reap too many benefits, twist the same idea around to capture a different market. For a start-up the first step is to get funds. Anand elucidated through an anecdote that how the chemistry between the co-founders worked for them for getting the funds in the initial phases of Junglee. Later, he along with one of his business partners started Cambrian Ventures, which identified companies for seed funding. Cambrian funded companies like Aster Data, which was started by his teaching assistant at Stanford and later acquired by Teradata.

During his speech, he also emphasized on the fact that how being an academician, entrepreneur and an investmentor helps him in creating ideas, networking with people and identifying trends. He said that being associated with academicians and regular interaction with them is very useful and advised us to be connected with IIT Madras after completing the degree.

After sharing his experiences from the past, he talked about his current work at @Walmartlabs in Bangalore. Anand quoted that there are two major technology shifts happening in shopping – Social Networking and Smart phones. The facility at Bangalore would create technologies and businesses in social and mobile commerce for shoppers around the world.

Anand concluded the lecture by saying that we are living in a data decade and almost all the data is in social media. He also answered a variety of questions from the audience. The lecture was full of interesting insights and shed light on how to be an entrepreneur.

By

Aditya Ghai,

Team MILS

Class of 2013

Downgrade of SBI rating: Something to bank on?

On 13^th October 2011, Management Invitation Lecture Series or MILS, the flagship event of Department of Management Studies (DoMS), IIT Madras, invited Mr. M.S. Sundara Rajan, former chairman and managing director of Indian Bank, for a lecture on Moody’s Downgrading of SBI Rating.

Mr. Rajan started with an overview of SBI, emphasizing on its historic value and how it came into existence. He said that it is the no.1 bank in India with over 2 lakh employees and more than 16000 branches and it is also known as the “Big Brother” of the Indian Banking System. The Government holds 59% stake in SBI, making it a Government of India undertaking.

Reasons for Downgrading

Before quoting the reasons, Mr. Rajan presented some facts related to downgrading. The rating was downgraded from C- to D+. He said that the factors that were cited by Moody were low Tier-1 Capital ratio and deteriorating asset quality. Also, rise in bank’s non-performing assets (NPA) made Moody adopt a negative view on SBI.

He said that the reasons for downgrading are a result of two primary concerns, sufficiency of capital and asset quality. He also talked about how restructured assets can partly slip into an NPA and the effect of this slipping on the gross NPA ratio. When it comes to capital adequacy, he stressed on the fact that there is a conservative requirement of 23000 crores, but the government has a budgetary provision of 6000 crores only.

Industry Impacts and Management Response

The ways in which the industry can be impacted were also elucidated. Mr. Rajan said that the SBI may only prefer to lend to highly rated companies and other PSBs may also follow the same path. As a result lower rated borrowers may prefer to move to other lenders which might lead to unstructured borrowing by the companies, he said.

Furthermore, he drew our attention towards the way the SBI management has responded. He quoted that as per SBI, the market is over-reacting and stress is only in a few sectors, namely exports, agriculture and SME, leaving the corporate sector unaffected.

DOs and Don’ts for budding managers

Apart from giving his views on the downgrading, he also emphasized on how budding managers should prepare themselves for the future. He said that as young managers, we should enjoy the work that we do and develop multi-tasking capabilities. He urged the young generation to develop self-belief and confidence. He also stressed on the importance of having a stress-free mind.

Mr. Rajan’s lively and informative speech really captivated the audience.

Contributed by: 

Aditya Ghai

Class of 2013