SIMSREE Consulting Club Newsletter - May 2013

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Greetings from SIMCON - SIMSREE Consulting Club ! …

Greetings from SIMCON - SIMSREE Consulting Club !

Attached is the May Edition of BEACON (Monthly Newsletter from SIMCON).

We have started quiz prizes from last month. First entry with maximum correct answers wins surprise prizes. The first winner is included in this newsletter.

Few Highlights:
Industry insights from Mr. Korekar
Analysis of ZS Associates
Logistics sector analysis

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  • 1. Mail to:simcon.simsree@gmail.comI N D U S T R Y I N S I G H T S B YM R . G O V I N D K O R E K A R1K N O W Y O U R C O M P A N Y :Z S A S S O C I A T E S2S E C T O R A N A L Y S I S –L O G I S T I C S : M O V E , S T O R E& D E L I V E R3C O N S U L T I N G W O R L DN E W S5M A Y Q U I Z 6F E A T U R E D A R T I C L E O NP A G E 2 A B O U TSydenham Institute of Management Studies, Research and Entrepreneurship EducationMAY 2013B E A C O N BE-A-CONSULTANTIssue: 7INDEXA MONTHLY NEWSLETTER FROM SIMCON - SIMSREE CONSULTING CLUB1 . I N D U S T R Y I N S I G H T S B Y M R . G O V I N D K O R E K A RFrom this issue onwards, we have started a new ‘Industry insights’ column.Through this column we hope to bring to you amazing industry insights from industryprofessionals themselves.We start off our column with views of our very own alumnus Mr. GovindKorekar (1998 Batch). Mr. Korekar has twelve years of leadership experience in themanagement consulting with a focus on Finance Transformation, Customer Transfor-mation and on the technology Transformation. Currently he is leading an India-focused effort at Deloitte Consulting which aims at enabling the firm to compete suc-cessfully in the Indian market. It is a strategic assignment to enhance the businessvalue delivered out of India. Prior to this he has worked with JPMC, Citi bank and Birla AT&T communications.SIMCON is thankful to Mr. Korekar for meeting us amidst his busy schedule & sharing his views! Below are someof the excerpts from our interaction. We hope that these interactions will help students at our college.Q. What transformations have cloud technologies brought to the financial services sector and how are these beingadopted by the customers /clients? What kind of demands do clients make these days with respect to technology?Banking and insurance companies are not really keen on adopting cloud technology for financial services because they areaverse to share client information. There are various reasons for it, one of it being the regulatory norms that are stringent whenit comes to client data protection, security and privacy. Secondly the competition is pretty intense and there is still a certain lackof confidence in the security which various applications using cloud technology provide. Having said that the various advantagesthat cloud systems offer like lesser cost, faster installation and increased efficiency have definitely made their mark and haveled to many NBFCs like Bajaj finance adopting software like Salesforce.com for CRM functions. However a domain like PrivateEquity where client confidentiality trumps ease and convenience will not opt for cloud based technology as we see it today.Also, in the future financial institutions may opt to use cloud technologies for CRM, but for actual financial functions like saypayouts they will still prefer in-house infrastructure.Q. What opportunities do you see in Indian Market with respect to financial consulting?The reach of the banking industry is increasing rapidly and the government is giving out licences for expanding in the tier 2 andtier 3 cities which will lead to bank branch network growth by many banks like Standard Chartered, ICICI etc. For such a massiveexpansion they would need financial advisories and other consultants along with increased resources to match the scale. Also,today many small scale banks like Ratnakar bank have come up, who are playing the valuation game. They are trying to build upa brand and a network which would place their valuation much higher than their net worth. So, such banks would be keen to bea part of Mergers and acquisitions which again need an expert consulting advice on taxation, technology integration, under-standing whether the core values and business models of the two brands are aligned or not. Also IRDA has come up with newset of guidelines for products which will come into practice from July. These guidelines will decide the way products are de-signed, priced etc and hence the companies would need advisories to ensure that they are compliant to these norms. So, thenext two years look really good for consulting in FSI domain.Q. What are the Skills that we need to develop if we want to get into the consulting domain?To be a consultant, one of the mandatory things that you need is technical knowledge about a domain as well as be well versedwith the industry. Also, articulation skills are very important for a consultant. Many a times clients are not very clear with whatexactly they need, so the onus falls on the consultant to gauge exactly what the pain point is and how to go about resolving itand presenting the solution to the client. Also there is no certain path to get into the consulting, because today consulting existsin every sector and every domain. Today there are several boutique consulting firms which cater to a specific sector and indus-try, so if you have built up a domain expertise you can become a sought after consultant.
  • 2. 2 . K N O W Y O U R C O M P A N Y : Z S A S S O C I A T E SPage 2: BEACONSources:ZS Associates is a privately owned American consulting company, founded on September 21, 1983, by Kellogg School of Manage-ment marketing professors Andris A. Zoltners and Prabhakant Sinha. The company employee strength is over 2000. It has provided pri-marily sales and marketing consulting to over 700 clients. Around 85% of these clients are in the pharmaceutical, biotechnology and medicalproducts industries, while the remaining 15% are from the high tech, telecommunications, transportation, consumer products and financialservices sectors. ZS Associates was placed 3rd in the 2013 Vault Pharmaceutical & Health Care Consulting practice area and 14th in theoverall rankings. Their top Clients are Merck & Co , AstraZeneca , Novartis, Johnson & Johnson, Sanofi.Head-quartered in Evanston, Illinois , the company has ten North American offices (including Boston, Chicago, Evanston, Los Ange-les, New York,Philadelphia, Princeton, San Diego, San Francisco, and Toronto), six European offices (including Frankfurt, London, Milan,Paris, Zurich, and Barcelona), and four offices in Asia (including New Delhi, Pune, Shanghai, and Tokyo). ZS Associates was named the sev-enth best consulting company to work for in 2009 by Consulting Magazine. "Consulting" magazine named Sandra Forero , Principal at ZSAssociates as a "Top 25 Consultant" in its May issue.ZS AssociatesParent Company ZS AssociatesCategory Sales & Marketing ConsultancySector ConsultingTagline/ Slogan Unleashing potentialUSP They are established by the marketing professors of Kellogg School of ManagementSTPSegment Companies looking for consulting solutionsTarget Group Healthcare care industriesPositioning Marketing experts for healthcare industriesSWOT AnalysisStrength1. It was founded by the marketing professors of one of the best Business Schools of marketing.2. They were awarded as one of the top ten best consulting company to work for.3. Majority of their clients are in pharmaceutical, biotechnology & medical products industries.4. They were ranked among the top five in the Pharmaceutical & Health Care Consulting practiceareaWeakness1. They have not been able to reach out to a lot of countries specially the emerging economies2. Lesser known consultant brand compared to market leadersOpportunity 1. They have opportunities in emerging economies in the world.Threats1. The limited expertise in business area could be a threat.2. They immense threat from economic recessionCompetitionCompetitors1. McKinsey & Company2. Booz & companySource: www.zsassociates.com
  • 3. 3 . S E C T O R A N A L Y S I S – L O G I S T I C S : M O V E , S T O R E & D E L I V E RPage 3: BEACONThe Indian transportation and logistics industry is poised at a crossroads along its growth trajectory. The developments havespanned across all modes of transportation and logistics services including rail, road, air, ports, water and warehousing. A sophisticated lo-gistics sector should constitute the backbone of a large, mature economy and thus, from Indian context; current developments, shortcom-ings and feasible solutions for the same becomes an extremely crucial subject. Changing demographics like increasing migration to urbanareas, increased domestic production and growth on niche industries add to the complexity of logistics sector.Key Area Current Status Pain-points Implemented / Proposed SolutionsAirAir contributes to only 1% by vol-ume of total trade but has shareof 29% in trade value. Within aircargo, international cargo contrib-utes to about 67%Majority of cargo traffic still limitedto metro cities airportsDevelopment of new cargo traffic hubs atTier II cities by rising domestic volumes,freight handling services by low-cost air-lines, and enhanced connectivity.Lack of cargo handling and storageinfrastructure at airportsDevelopment of separate cargo terminalsand satellite freight cities with multi-modal transport, cargo terminals, coldstorage, automatic storage and retrievalsystems, and the mechanized transporta-PortsMaritime traffic through portscontributes to 90% by volume oftotal international trade but hasshare of 70% in trade value. Eastcoast ports present significantdevelopment opportunities.Lack of private investments in portdevelopment leading to inefficientoperations and stagnant port capac-ity"Maritime Agenda: Vision 2020" is a gov-ernment initiative aims to encourage pri-vate investment in both major and non-major ports.This aims to get private investment of66% and 99% in development of majorand minor ports respectively.Sluggish growth rate of port capac-ity and development of new portprojectsCoordinated coastline planning and dili-gent approval of projects, not only froman environmental but also a commercial/business standpoint, is the need of thehour.
  • 4. Page 4: BEACONRailIndia’s rail network is the largest inAsia and the second largest in theworld (behind the US). Two-thirds offreight in India is transported overmedium and long distances, forwhich rail transportation offers sig-nificant time and cost savings.High cost in terms of money, time andenergy in supply of goods and servicesfrom industry to marketDedicated Freight corridors giving high speed con-nectivity to important ports and urban clusters.India’s rail infrastructure suffers fromchronic under-investment, due to whichits potential for freight movement re-mains largely untappedThe PPP (Public-Private Partnership) model shouldbe encouraged for the development of the routenetwork, as well as for the modernization ofcoaches through the transfer of technology. Pri-vate freight terminals should also be set up forbulk and container handling.RoadsRoads continue to constitute themost significant component of In-dia’s logistics industry, accountingfor 60 percent of total freight move-ment in the country. National High-ways constitutes about 2 percent oftotal road network and accounts formore than 40 percent of total roadfreight.As compared to growth rate of cargomovement via roads, growth rate of roadnetwork has been very sluggish. Also,quality and construction standards lagbehind those of the developed countries.To encourage private players, the Government hasannounced several incentives such as BOTschemes, declaring the road sector as an industry,providing 100 percent tax exemptions in any con-secutive 10 years out of 20 years, duty free im-ports of certain identified construction plants andequipment, FDI of up to 100 percent, and in-creased concession periods (up to 30 years).Lack of common platform for road trans-porters and traders to organize roadtransport sectorCreation of an efficient marketplace similar toStock Exchange or Commodity Exchange.Absence of real time traffic informationand support system enabled using ITCollaboration of Fleet Exchanges with the existingRoad Traffic Offices (RTO) could be a win-win withFleet Exchanges providing an Online Real TimeTechnology platform while RTOs providing the onfield support.DomesticWaterwaysWater as a mode of cargo move-ment contributes only 8 percent byvolume of the India’s cargo move-ment.Despite its potential as a cost-effectiveand environment-friendly mode of trans-port, its share in the modal mix contin-ues to lag behind other developed coun-tries.Consistent focus and relevant action is requiredfor growth of Infrastructure & core capacity. En-courage small ports for movement of domesticlanguage. Increase vessel capacity to facilitatefewer vessel voyages and, thus, help reduce portcongestion.WarehousingApplications of inventory manage-ment on a just-in-time (JIT) basis,concepts like vendor managed in-ventory (VMI) are becoming popu-lar. Government bodies play majorrole in agricultural warehousingwhile Industrial warehousing is stillmajorly unorganized.Outdated designs not compatible with ITinfrastructure and not unable to cater torequirements of storing perishablegoods, medicines etc.Existing small warehouses need to be replaced bylarge, modern warehouses that incorporate globalstandards such as tall designs, modular rackingsystems, palletisation, and the use of automationand IT.Lack of a reserved storage areas nearbyproducer or market dedicated for ware-housing infrastructure and governmentincentives given to encourage moderni-zation and organisation of warehousingsectorDevelopment of FTWZ (free trade warehousingzone). As a concept, FTWZs offers significant value-addition opportunities to multiple industries byvirtue of being deemed foreign territory. TheFTWZ concept plays a pivotal role by offering aworld-class, single-window solution for multiplelogistics activities, with special focus on EXIM flow.It is widely believed by industry experts that withexcellent infrastructure, mechanization and regu-latory incentives, the FTWZ model offers signifi-cant potential to save costs in the overall supplychain.Contd. From page 3
  • 5. French consulting market shrinks to 3.7bn eurosThe French consulting market contracted in 2012, with revenues shrinking by around 2.5 per cent to €3.7bn. According to report thenumber of factors responsible for such situation includes a poor macro-economic situation, the maturity and sophistication of clients,and a fierce focus on cost-cutting by French companies, making it difficult for them to justify using consultants. Of the nine major in-dustries tracked, consulting revenues only grew in the Energy & Resources and Pharmaceutical sectors. Financial services andmanufacturing, which remain two of the biggest consulting sectors, accounting for around half of all consulting spend in France, ex-perienced a mediocre 2012 – leading to a substantial impact on the overall market.Facebook: a tool to attract clients?Consulting firms are increasing their Facebook usage to focus on specific topics and build relationships. According to Source Informa-tion Services in the report “Facebook, thought leadership and consulting firms”, companies are using this social media to build theirbrand and highlight issues and experiences with potential clients. Social Media and Facebook can benefit consulting companies be-cause it provides insights about the topics the public is concerned . According to the report, IBM, Accenture, Deloitte, McKinsey, andPwC Quarterly have passed the 100,000 likes barrier. As companies provide comments on key topics, they are valued by readers andencourage further interaction with potential clients whilst disseminating the company’s brand. Although no. of likes can demonstrate apage’s potential audience, that metric cannot measure the level of engagement between the audience and firms.Benelux consulting market shrinks to under €1.9bnThe Benelux consulting market continued its declining trend in 2012, dropping by 3.1 per cent to €1.87billion compared to 2011. Thereport states that the economy of the Netherlands is more biased towards financial services and has been suffering more from thefinancial crisis. Financial services consulting across the Benelux region fell by 7.4 per cent. Many consulting leaders recognize that themarket is unlikely to bounce back before 2014, and there is a need to find more inventive ways of finding growth.Consulting firms plan big as India set to join top 10 health care marketsDriven by growth and action in the pharmaceutical sector, many consultancy firms, and data analytics companies such as IMS Health,C Marc and Boston Consulting Group (BCG) are looking at expansion of their operations and services in this space. Some of thesecompanies are also eyeing inorganic growth to increase their footprint and diversify by offering newer services to pharmaceutical andhealth care clients. According to estimates, market for such services and delivery in India is currently pegged at around $200 million,growing over 15% annually. Firms such as BCG and Strategic Decision Group (SDG) are also looking at India as the growing marketfor services and delivery. The growth rate of BCG’s business from the health care segment has accelerated substantially in last twoyears as it went from 15-20% to 50% as reported by Bart Janssens, Partner and Director, BCG.Consulting World NewsPage 5: BEACONSources: business-standard.com, sourceforconsulting.com, communicatemagazine.co.ukRecommendations:1. In terms of volumes involved, cargo in India can be classified in a pyramid-like fashion, with each category entailing distinct lo-gistical considerations.2. Harmonize and streamline processes across logistics related government bodies, thereby reducing stoppages and touch pointsof cargo movements as well as increasing the speed with which goods are transported within, in and out of the country.3. Set benchmarks and standards for the industry, thereby driving the uniformity of warehouses, storage and transportation equip-ment.4. The optimal movement of freight by matching cargo categories with transportation modes will be crucial for expanding volumesacross categories. An integrated transport approach that promotes inter-sector coordination of road, railways and shipping depart-ments should be developed.Sources: CII - KPMG Report “Logistics – Game Changers”ICC – Deloitte Report “Logistics Sector – Present Situation & Way forward”Contd. From page 4
  • 6. 1.They all had joint ventures with the B K Modi group in India2.Oil of Olay (now simply called Olay , a brand under P&G)3.As a first of its kind initiative in India, Yamaha started a new assemblyline for the scooter brand which is run entirely by women employees4.Vauxhall and Hindustan Motors. The Contessa was a model of a carbased on the Vauxhall Victor FE. The Victor was stopped in 1979 andthe production of Contessa ended in 2002. (Hindustan Motors)5.Slideshare’s servers from where the portal delivers the slides to users .Mail Answers To:simcon.simsree@gmail.com withSubject= simcon_quiz_may_2013First Received All Correct Answers willbe published in next month’s Edition.B E L O W A R E A N S W E R S T OI S S U E - 6 . A P R I L _ 2 0 1 31.Which multinational computer technology and IT consulting corporation headquartered in New York,US was earlier known by the name "Computing Tabulating Recording Company"?2.Complete the analogyThe Economist : Big Mac Index : : Commonwealth Bank : ?3.Identify the logo4.An idea of providing voice based local search database struck the CEO of this company while workingfor Yellow Pages Company named United Database India in 1987. The company has come up with an IPOissue very recently.5.Which firm was hired by the US Navy to help prepare for World War 2 in 1940?QUIZZ TIME !!Contributions invited: To make this feature a successful effort, we seek continuedinvolvement and contribution from our readers, that is YOU. We invite articles and trivia onthemes related to consulting. Be it industry news, consulting trends, a joke, a cartoon orfeedback, we are eager to hear from you. So go ahead, do your research, pen down yourthoughts and mail your entries to simcon.simsree@gmail.com.Best Regards,SIMCON –SIMSREE CONSULTING CLUBSIMSREE, B-ROAD CHURCHGATE 400 020, INDIA.QUIZZ OF MAY 2013Page 6: BEACONPrize Gift for the First Entry withmaximum correct answers !!Winner of April Edition with maximum correctanswers:Mr. Vernon Fernandes. Congratulations!!