https://picasaweb.google.com/s/c/transparent_album_background.gif) no-repeat left">https://picasaweb.google.com/104625738290878154123/Test?authkey=Gv1sRgCK6-8daXkMn9xwE&feat=embedwebsite"> |
| Test |
Ashish Testing for Posting image
Friday, May 6, 2011
testing
Ashish Testing for Posting image
Monday, April 25, 2011
Cloud Unleashed
Cloud Computing
First Toy which I gave to my kid at the age of 1 was Building Blocks, by which they learn to add blocks to build various shapes/structures. When we introduce cloud computing, we need to think clouds as a building block. These blocks could be spread across various geographies and provide solution to various organization.
In early 2000, Microsoft/Sun introduced COM/DCOM component level programming where they had shown how various components could be build at various location and integrated as per the business model. Companies during that time were thinking within limited boundaries where they had component building techniques only for solving issues for their own products.
- Companies of 21st Century: - Lean and outsource most of the jobs. Keep what you need to maintain
- Methodology for having Cloud computing
- How Clouds can be build for various application (Web server architecture)
- Virtualization
- How Clouds can be build for various application (Web server architecture)
- Type of Clouds
- Public
- Private
- Hybrid
- Public
- Type of Services available on Cloud Computing
- LAAS
- SAAS
- PAAS
- LAAS
- Cost impact
- Operation Cost
- CPU managing like batch jobs etc,
- Operation Cost
- Pricing
- Case Study
- Various Companies providing clouds.
Backup
- What distinguishes cloud computing from previous models? Boiled down to a phrase, it's using information technology as a service over the network. We define it as services that are encapsulated, have an API, and are available over the network.
- It shortens the time from sketching out an application architecture to actual deployment. Cloud computing incorporates virtualization, on-demand deployment, Internet delivery of services, and open source software. From one perspective, cloud computing is nothing new because it uses approaches, concepts, and best practices that have already been established.
- Concept of Virtual machine
- The ability to use and pay for only the resources used shifts the risk of how much infrastructure to purchase from the organization developing the application to the cloud provider. It also shifts the responsibility for architectural decisions from application architects to developers. This shift can increase risk, risk that must be managed by enterprises that have processes in place for a reason, and of system, network, and storage architects that needs to factor in to cloud computing designs.
Introduction
First Toy which I gave to my kid at the age of 1 was Building Blocks, by which they learn to add blocks to build various shapes/structures. When we think cloud computing, we should think clouds as a building block for creating complex network. These blocks would fit other blocks and hence build a complex structure which could be spread across various geographies. What distinguishes cloud computing from previous models? Boiled down to a phrase, it's using information technology as a service over the network. We define it as services that are encapsulated, have an API, and are available over the network.
Figure 1:- Building Block for Cloud computing
In early 2000, Microsoft/Sun introduced COM/DCOM component level programming where they had shown how various components could be build at various location and integrated as per the business model. Companies during that time were thinking within limited boundaries where they had component building techniques only for solving issues for their own products.
It shortens the time from sketching out an application architecture to actual deployment. Cloud computing incorporates virtualization, on-demand deployment, Internet delivery of services, and open source software. From one perspective, cloud computing is nothing new because it uses approaches, concepts, and best practices that have already been established.
Companies of 21st Century: - Lean and outsource most of the jobs. Keep what you need to maintain
Companies in 21st centuries are evolving to ensure that they are making them so lean and flat that management can concentrate on their core competencies and outsource their non core components. Companies are creating clouds at various geographies which could be accessed when required and could be revisited without thinking of huge investments.
Nike Cloud Structure
Nike Footwear Company has design centre at various locations where they do market study to ensure the product stratifies customer demands. However, Nike doesn't have any manufacturing units. They have created various clouds in China where designs of shoes are crafted into product and exported to the countries where they have the demands. Nike has various quality units which ensure that product support customer quality parameters. Nike has ensured that they are only paying for products but have not invested of CAPEX required for building and running these units. However, if tomorrow Nike wants to shift their base of manufacturing, maybe due to cost reason, Nike just need to create a new cloud without actually thinking of investment and could be more rational decision. This has given Nike agility to decide faster and always be competitive.
Telco Cloud Strategy
In normal Telco deal, Product of Cisco or ALU will act as channel partner for Service provider where they take margins and provide AMC contract. In future the telco's will open network partner ecosystem where their vendors will be sitting on-demand through which enterprise customers will have access via portal. So range of service could be CRM products, skype. New Services will thereby be available and paid for on-demand and transformational projects that offer the enterprise new set of functionality that can be delivered out of Opex budget rather than cash-hungry CAPEX.
The BT strategy that underpins this wired world of soft communication is branded as the SOI (Service oriented Infrastructure). AT&T describes its Telco 2.0 strategy as the intelligent network and telefonia is working on similar strategy through its Aquesta project.
Figure 1:- Nike Cloud for manufacturing
Market Potential
SAAS | PaaS | IaaS |
Salesforce.com | Force.com | Amazon Elastic Compute cloud |
SAP Business by Design | Google App Engine | GoGrid Cloud Hosting |
Cisco WebEx | Microsoft Azure Services | |
Google Apps | ||
IBM LotusLive | ||
Microsoft BPOS |
Figure X:- Cloud examples in market
Technical Architecture
Example Web application deployment
As an example of simple architect of application deployment in cloud computing. Consider a two-tier Web application deployment into a cloud:
- A developer might choose a load balancer, Web server, and database server appliances from a library of preconfigured virtual machine images.
- The developer would configure each component to make a custom image. The load balancer would be configured, the Web server populated with its static content by uploading it to the storage cloud, and the database server appliances populated with dynamic content for the site.
- The developer layers custom code into the new architecture, making the components meet specific application requirements.
- The developer chooses a pattern that takes the images for each layer and deploys them, handling networking, security, and scalability issues.
- The secure, high-availability Web application is up and running. When the application needs to be updated, the virtual machine images can be updated, versioned, copied across the development-test-production chain, and the entire infrastructure redeployed. Cloud computing assumes that everything is temporary, and it's just as easy to redeploy an entire application than it is to manually patch a set of individual virtual machines. In this example, the abstract nature of virtual machine images supports a composition-based approach to application development. By refactoring the problem, a standard set of components can be used to quickly deploy an application. With this model, enterprise business needs can be met quickly, without the need for the time-consuming, manual purchase, installation, cabling, and configuration of servers, storage, and network infrastructure.
Figure X:- Architectural of Cloud computing
Infrastructure Models
Depending upon the requirement and also availability of the product in the mind, companies select one of the following models of cloud:-
- Public cloud :- Clouds which are run and maintained by third party. Most common example is salesforce.com CRM where company has tied up with various companies to manage their CRM. This CRM needs to be customized depending upon user privilege/type of industry/Name of the company. Major advantage of using such services is companies don't have to invest on creating infrastructure and also manpower is not require to be maintained. Companies provide various reports which is useful for companies to extract data in user friendly format.
- Private cloud:- Private clouds are built for the exclusive use of one client, providing the utmost control over data, security, and quality of service (Figure 4). The company owns the infrastructure and has control over how applications are deployed on it. Private clouds may be deployed in an enterprise datacenter, and they also may be deployed at a colocation facility.
- Hybrid cloud:- Hybrid clouds combine both public and private cloud models (Figure 5). They can help to provide on-demand, externally provisioned scale. The ability to augment a private cloud with the resources of a public cloud can be used to maintain service levels in the face of rapid workload fluctuations. This is most often seen with the use of storage clouds to support Web 2.0 applications. A hybrid cloud also can be used to handle planned workload spikes. Sometimes called "surge computing," a public cloud can be used to perform periodic tasks that can be deployed easily on a public cloud. Most common example of Hybrid is when user look for cheapest ticket. All airlines companies maintain Db which is specific to their system where presentation layer is maintained by 3rd parties like makemytrip/etc etc. Please refer case study regarding Architecture and pricing of the cloud computing in last chapter where this has explained in great details.
Cloud Providers
Cloud service providers tend to offer services that can be grouped into three categories: software as a service (SAAS), platform as a service, and infrastructure as a service. These categories group together the various layers illustrated in Figure 6, with some overlap.
- SAAS :- SaaS features a complete application offered as a service on demand. A single instance of the software runs on the cloud and services multiple end users or client organizations. The most widely known example of SaaS is salesforce.com, though many other examples have come to market, including the Google Apps offering of basic business services including email and word processing.
- PaaS :- PaaS encapsulates a layer of software and provides it as a service that can be used to build higher-level services. Most of large OEM are concentrating on developing such platform which could be deployed at various Service provider and developer communities could devlop various application on top of the platform. E,g 5400 IAS server of ALU or 8690 ALU OSP.
- LaaS:- Infrastructure as a service delivers basic storage and compute capabilities as standardized services over the network. Servers, storage systems, switches, routers, and other systems are pooled and made available to handle workloads that range from application components to high-performance computing applications.
Companies supporting Providers
Pricing
With Advent of Web 2.0 and cloud computing, companies are creating new business model to ensure that they are competitive advantage and provide differentiation to end customer. For any company pricing strategy is a major component be it product or Services company. Companies need to look how to amortize their investment and ensure that companies provide value to shareholders. Companies need strategize how they would like to position their Cloud, should pricing be value base or cost base, Should pricing be Volume or per unit based. After all, Cloud providers pride themselves in allowing tenants to pay a periodic base cost as per their usage. So how should cloud offering be priced. One of the option (specifically for SaaS), we should focus on boosting adoption rate and deferring creation of income and margin later stage of the product.
Companies accept that cloud computing model has been evolving and would take some time to mature and would increase stake of all the stakeholders while deploying the network. Revenue of each stakeholder will depend how the network is being adopted by end customers. As per industry one is servicing, cloud needs to be priced such that it should address company objective and maximize Value creation of the company :-
- Boost Adoption: - This pricing could be applied by lowering the entry barrier of using the cloud. It is more appropriate for SaaS, where more revenues are envisages by involving more customers. Depending upon a service which is providing which have lot of competition decreasing price could bolster the sales. However if company starts providing free usage, the customer tend to take this as a habit and difficult to get rid of the same.
- Cover Costs :- This applies for IaaS where companies provide infrastructure for accessing or deploying services. Here the cost of the Capex and Opex is know, companies with limited markup can provide pricing figure. Margin could depend upon commitment from the customer, if the customer is tending to providing long term commitment for the hardware, markup could be accordingly reduced.
- Generate Healthy Margins and Profit :- This method could be applied for PaaS, where companies have unique offering and could ensure with proper market positioning they can create proposition which ensure them to skim the cream from market. Big OEM in telcom market are eyeing this space which include ALU (with its AE strategy) and NSN with open cloud acquisition.
Companies supporting Providers
Name of the Company | Type of Cloud | Description |
Thursday, October 9, 2008
Leadership
This is very common word in the organization/ political parties “Leaders”. What exactly this word means? Leaders are the person who show the path where road could be constructed and encourage the people to put there effort to make sure the road is constructed on time with the desired quality customer have asked for. He is always along with the people in time of problems. Leader protects people like parents, he knows when to cuddle and when scold.
Leaders are born or created: - When any person discuss about leaders, first question, which comes into everybody mind, Leaders are born or created? There have been debates and answer to this is almost impossible to find. Just to add some fuel to this fire, I am adding my thoughts on this topic. Rest of the paragraph would talk about this topic. If leaders are not made, then MBA institute are not required where the people raw talent is polished. When I say this, I do not mean that MBA institute are machines where one person could be put IN and leaders would be created as byproduct. There would be lot many people raising hand saying if leaders can be made, why great leaders of Industries have never been too big institute still manage to be leader of organizations? If we analyzed and put our study on Industry great leaders like Richard Branson (CEO Virgin Atlantic)/ Icococa / Jack Welch/Bill Gates these people have come from average family where each family had the ideology and have faith in there family values. These people don’t have the proper degree of Management but these people have vision what they want from life and each hurdles they take as a experience to look further in the future. Great leaders read each situation and try to extract best out of each situation to polish there skill.
Characteristic of Leaders:-
Ø Leaders relentlessly upgrade there team strength and evaluate at every moment: - In the world cup of 2007, Australia had played outrightly as champions. If we recall the greatest strength of Australian team, there is no player in the team pointed as a match winner. Australian playing 11 plays a team, they are gelled where Batting /blowing and fielding each division enhances other division functioning. Each Manager wants that team given to him should have best players in the team, each playing 11 would be bat like caliber of Sachin Tenduklar while batting. Bowls like the caliber of Murlidarhan and should have wicket keeper of the caliber of Gllichrist so that each time they play match, should have smooth sailing. In real life scenario, each team probably would have 20% best performers, 70% Vital performer and rest would Bottom performers. Leaders should make sure the people diversity should not come in between Project’s normal functioning. Each member should play its role and manager should give other person opportunity to excel in the current. The good leader does not wait for evaluation time (generally year-end) to comment on person performance but should be a regular feature so that person should have room to improve in his current role. Good leaders generally GEL average performing team completely to deliver high quality results with proper mentoring and honest feedback for the person. Leaders should evaluate person ability and enhance his skills to get best from each individual. Good leader should act as a gardener, watering the seeds from one hand, and fertilizer on other hand so that to make them grow faster. Often remove the weeds. Watch the plants to grow healthier.
o Why do best Cricketers become best coaches: - Each leader needs to have knowledge of what there team is doing? Incase person is not equipped enough then he might be able to coach others. These coaches knows what lacuna they had faced during there time as cricketers.
o Build self confidence.
Ø Leaders should not only see the vision but also breathe and live vision:- Company set the vision for growth. Leaders should check that this vision statement not be just statement given by company leadership but need to make sure that all employees in the company should check that task which needs to be done, should be done so that this statement is satisfy. The direction should be so much vivid that when any employee is waked up at the night, he should be able to clearly spell out the vision statement of the company in the terms and also how he would contribute in achieving the statement. In Aricent (earlier known as Hughes), company had the visison statement of “creating customer value”. Each indivual had to have the training from professionals to understand meaning of the vision and how each level of the people could help to achieve vision target. But leader needs to make sure that incase the company uses jargon or vague goals through the vision statement, it creates the confusion among the people and companies generally go haywire. I have worked in Ascom, in 1999 company CEO had a vision to have each division e-enabled. CEO generally speak there vision statement in every speech they deliver, I wonder if they are not tired of the same, but actually from the view point each time they meet they see different set of people, they make sure to put the company vision to get things across. Should vision be prerogative of CEO. Answer should be NO as CEO speeches are for high management. Each business Manager should put the speech to there subordinates on the daily basis as this would enable each employee would have this under there skin.
o Most importantly “if you want employees to live and breathe the vision statement show them MONEY.
Ø Leaders get into everyone’s skin and exuding +ve energy:- There is old saying that “The fish rots from the head”. It is just like the politics and corruption filter down into the organization. The manager needs to go with the positive energy and this would help people to get the work done. This would help to sail in the difficult time by having some emotional bonding.
Ø Leaders establish trust with candor, transparency and credit :- Leaders needs to be honest and shows transparency while making the decision. This enable person to trust next level people. Also if the person gets the due credit for the work he has done this would not reduce the leader creditability in the organization , but would enable the person to trust the organization.
Ø Leaders inspire to have risk taking ability and learning by setting example:- Leaders should encourage people to take risk. As there would be few misses in the procedure, but remember to take learning out them rather than just blaming the person who have done that. Leaders are the boss but that doesn’t mean that they should be source of knowledge.
Ø Leaders celebrate :- All the major achievement the managers should celebrate and all the pat on the back should be broadcasted on major various platform, this would make employee more valuable in the organization.
This is very common word in the organization/ political parties “Leaders”. What exactly this word means? Leaders are the person who show the path where road could be constructed and encourage the people to put there effort to make sure the road is constructed on time with the desired quality customer have asked for. He is always along with the people in time of problems. Leader protects people like parents, he knows when to cuddle and when scold.
Leaders are born or created: - When any person discuss about leaders, first question, which comes into everybody mind, Leaders are born or created? There have been debates and answer to this is almost impossible to find. Just to add some fuel to this fire, I am adding my thoughts on this topic. Rest of the paragraph would talk about this topic. If leaders are not made, then MBA institute are not required where the people raw talent is polished. When I say this, I do not mean that MBA institute are machines where one person could be put IN and leaders would be created as byproduct. There would be lot many people raising hand saying if leaders can be made, why great leaders of Industries have never been too big institute still manage to be leader of organizations? If we analyzed and put our study on Industry great leaders like Richard Branson (CEO Virgin Atlantic)/ Icococa / Jack Welch/Bill Gates these people have come from average family where each family had the ideology and have faith in there family values. These people don’t have the proper degree of Management but these people have vision what they want from life and each hurdles they take as a experience to look further in the future. Great leaders read each situation and try to extract best out of each situation to polish there skill.
Characteristic of Leaders:-
Ø Leaders relentlessly upgrade there team strength and evaluate at every moment: - In the world cup of 2007, Australia had played outrightly as champions. If we recall the greatest strength of Australian team, there is no player in the team pointed as a match winner. Australian playing 11 plays a team, they are gelled where Batting /blowing and fielding each division enhances other division functioning. Each Manager wants that team given to him should have best players in the team, each playing 11 would be bat like caliber of Sachin Tenduklar while batting. Bowls like the caliber of Murlidarhan and should have wicket keeper of the caliber of Gllichrist so that each time they play match, should have smooth sailing. In real life scenario, each team probably would have 20% best performers, 70% Vital performer and rest would Bottom performers. Leaders should make sure the people diversity should not come in between Project’s normal functioning. Each member should play its role and manager should give other person opportunity to excel in the current. The good leader does not wait for evaluation time (generally year-end) to comment on person performance but should be a regular feature so that person should have room to improve in his current role. Good leaders generally GEL average performing team completely to deliver high quality results with proper mentoring and honest feedback for the person. Leaders should evaluate person ability and enhance his skills to get best from each individual. Good leader should act as a gardener, watering the seeds from one hand, and fertilizer on other hand so that to make them grow faster. Often remove the weeds. Watch the plants to grow healthier.
o Why do best Cricketers become best coaches: - Each leader needs to have knowledge of what there team is doing? Incase person is not equipped enough then he might be able to coach others. These coaches knows what lacuna they had faced during there time as cricketers.
o Build self confidence.
Ø Leaders should not only see the vision but also breathe and live vision:- Company set the vision for growth. Leaders should check that this vision statement not be just statement given by company leadership but need to make sure that all employees in the company should check that task which needs to be done, should be done so that this statement is satisfy. The direction should be so much vivid that when any employee is waked up at the night, he should be able to clearly spell out the vision statement of the company in the terms and also how he would contribute in achieving the statement. In Aricent (earlier known as Hughes), company had the visison statement of “creating customer value”. Each indivual had to have the training from professionals to understand meaning of the vision and how each level of the people could help to achieve vision target. But leader needs to make sure that incase the company uses jargon or vague goals through the vision statement, it creates the confusion among the people and companies generally go haywire. I have worked in Ascom, in 1999 company CEO had a vision to have each division e-enabled. CEO generally speak there vision statement in every speech they deliver, I wonder if they are not tired of the same, but actually from the view point each time they meet they see different set of people, they make sure to put the company vision to get things across. Should vision be prerogative of CEO. Answer should be NO as CEO speeches are for high management. Each business Manager should put the speech to there subordinates on the daily basis as this would enable each employee would have this under there skin.
o Most importantly “if you want employees to live and breathe the vision statement show them MONEY.
Ø Leaders get into everyone’s skin and exuding +ve energy:- There is old saying that “The fish rots from the head”. It is just like the politics and corruption filter down into the organization. The manager needs to go with the positive energy and this would help people to get the work done. This would help to sail in the difficult time by having some emotional bonding.
Ø Leaders establish trust with candor, transparency and credit :- Leaders needs to be honest and shows transparency while making the decision. This enable person to trust next level people. Also if the person gets the due credit for the work he has done this would not reduce the leader creditability in the organization , but would enable the person to trust the organization.
Ø Leaders inspire to have risk taking ability and learning by setting example:- Leaders should encourage people to take risk. As there would be few misses in the procedure, but remember to take learning out them rather than just blaming the person who have done that. Leaders are the boss but that doesn’t mean that they should be source of knowledge.
Ø Leaders celebrate :- All the major achievement the managers should celebrate and all the pat on the back should be broadcasted on major various platform, this would make employee more valuable in the organization.
Friday, November 9, 2007
Outsourcing ....
Outsourcing: The complete Story
Outsourcing:- In 21st century, buzz of all opportunities comes from the word “OUTSOURCING”. Companies from the West started to offload less tedious work to Asian countries where primarily costs of doing that work was less as compared to doing the same task in there own companies. This started emergence of the service sector in India, which gave birth to companies like Infosys, Wipro for IT sector in India and many manufacturing units in China. If we study economy of China, there exports have grown multiple times due to work offloading by the companies to China. In the world where Globalization seems to be in agenda of all the companies, Is outsourcing really paying off for big companies ?? or Is it compromising the quality for the costs?? In this article we would try to revisit the topic of outsourcing whether it is beneficial to companies or it is putting there existence a big question mark. The following section has been decided in the following manner. Briefly, in this topic I would try to explain
what is outsourcing ??
What can companies outsource
Selecting the Vendors
Outsourcing: - Boom or Bain
Risk mitigation during outsourcing
Global Delivery system of Infosys
Should Poter 5 strategy principle be applied to Outsourcing??
Before moving ahead , we need to emphasize why a company should outsource. In this highly competitive and changing world, companies try to optimize their activities. So doing all the activities is next to impossible for companies. A company needs to identify the partner who could do the job as per the quality standards.
What should be outsourced ?
Identify WHAT companies can Outsource:-
Company needs to identify where their competence exists. Keep the core competency with the team and try to find partner who can do rest of things in proper manner.
Company need to identify what process or production unit changes a lot and risk could put to other party.
Case Study On WHAT should be Outsource:-
Dell is company, which sells Computers. Dell’s core competency is assembling computers and selling to consumers. All the parts, which are required in the computers, are procured from the vendors. It sets the standards what are required for its production line. Dell makes sure the product which are made by the company are as per the standards.
Company management needs to identify which activities needs identified, which could maximize the value for the stakeholder. There could be instance where lot of capital might be require to establish the product line which could be easily manufactured in eastern countries. Also if companies put all the resources to manufacture this product, it might erode the benefit to the company which it might get because getting out the work from outside.
Nike is perfect example how outsourcing could be successful in today’s environment. It have big designing unit in Europe, where it design as per the requirement of the youth where its product line is most popular. But it doesn’t have any manufacturing unit. Nike sends the designs to china for manufacturing. Nike management has made sure the product, which is delivered to the end customer it, is as per the quality standard, which it requires. Company get the product with quality it desires at much cheaper rate.
Dell computer is another example how the product company can make use of outsouring in efficient manner to control cost and mitigate the risk of obseleting the components. Dell started as assembler of computers. It releasized that selling through middle man is costing hell lot of money and it was effecting its bottomline so it started selling computers directly to customers. As business grew instead of setting the factories for vertical integration it expaned the market area to Europe. Company knew that business was expaning and it would be easier to invest on compent assembly but as technology was getting fast obsolete they had decide to outsource all the component. To make things easier they had always shortlisted the vendor who were ready to invest and also ready to deliver plugin components. This had shrink the number of employees required in the company as well ready for any change in the market environment. They were able to reduce the shelf life of the product using effective CRM methods.\
In 1990’s, new form of outsourcing started with outsourcing of services. Indian companies that included Infosys mastered the outsourcing business in software services. Company started with providing manpower to the clients than improved the infrastructure and started executing the business from offshore. This Global delivery system was pioneered by Infosys, which later had become the Brand of India, which become the hub of software service. In India compaies are targeting fulfilling Fortune 500 companies IT needs through state of class infrastructure. The companies have put the quality standards which SEI CMM level/ TL9000 so that all companies who outsource the work are confident enough to know that whatever task they are doing are as per the quality standards defined by industry.
What factors needs to taken care while selecting the Vendors?
Before deciding on the vendor, companies should check the past record of accomplishment of the company. What kind of Commitment Company has been following? Company is able meet there commitments. Is the company reliable that it would not sell technology to other competitors? Also in the same time, the company has not missed any of the end dates.
Before taking any decision, company management needs to find out the relevant vendors who can manage the work as per quality Standards Company the work as per the quality standards. Big telecom companies are targeting 5 9’s as the strategic availability of the networks, if they outsource, the companies needs to make sure that output would be as per customer expectation.
Past record of the company needs to be checked, whether they have delivered with quality to other customer. Brand name of the company from which company would be buying the services.
Vendors should be ready to customize as per the requirement of the company. In case of Dell when it was expanding the business, they wanted the supplier should also be able to increase there production, so they don’t have to look for the another vendors to expand there network.
Companies should have multiple vendors rather than just relaying on one vendors. This enable to have competitions between the competitors and they don’t become complacent.
Outsourcing: - Boom or Bain
Whenever outsourcing is debated, it starts with cost cutting by the company and management generally comes out with the statement that is s strategic move to outsource work. Do really company gains from the move besides getting work done cheaply. There would be varied answer but studies have revealed the company has gain competitive advantage in getting work outsourced as companies have become more open to change. If the company have get product which produce say X amount of product which is delivered by Y company. If company is coming out with new product they would like to obsolete this product, company would just scrap the ties with this person rather than having big workforce thinking how to reuse this factory.
Negative side of the outsourcing companies are shrinking, this means companies that were providing employment to individuals have started lying off people. The work, which was done by the companies, is being outsourced to cheaper destination. The company requires a manager who can track monitor the quality of the product rest labour class is either outsourced to china/India/Malaysia like companies. On the flip side, in the eastern companies there have been lot employment being generated. So spending power have increased as well the quality standards have improved which have been evident with software boom have been floating high in India with company like infosys/wipro etc have made the mark in world fastest growing companies.
Check Points Outsourcing ????
For any company to be successful in outsourcing, it needs to make sure checkpoint in system are well placed else the advantage it tends to get would be easily washed out. Company needs to identify the target why it is not producing the product and going for other vendor to make.
Major Reasons:-
company doesn’t have skill level, would require large amount of investment
Company would need to invest large amount of money and in the market product could be easily available
If company intends to make the product inhouse, Time to market could lead its competitor taking advantage.
It wants to reduce cost.
Regular Monitoring of Vendors :-
Companies Management should have regular meeting with the vendors so that to identify what are the factors, which could become the blocking factor in the coming days. Any such issues should be tried to address before the companies loosing the precious time to market there product.
Alcatel have given there worked to at least 5 vendors in India. They have policy to have subcontractors for outsourcing there work. They try to identify the vendors, which are specialist in the domain and try to negotiate on the price/deliverable. They have the work structure in which they have regular meeting at all level to make sure the progress of the work is on track and all the quality records required by the companies is met within the timeframe.
Future of Outsourcing:-
Figure shows the future of corporate world in 20th century. It shows that company size would be shrinking. They would be more specific to the customer needs and they would devise the product accordingly. The product would be such that it would be just a supplier to the user. The company would ask to design the product as per the company needs. More over the IPR would be with the company then company could request another to build or do mass production for the product. There could be distant location where the support of that product would be present.
Outsourcing is one of the best practices of 21st century. Companies are constantly in search of the place where work is efficiently executed and cost of operations is cheapest.
Outsourcing:- In 21st century, buzz of all opportunities comes from the word “OUTSOURCING”. Companies from the West started to offload less tedious work to Asian countries where primarily costs of doing that work was less as compared to doing the same task in there own companies. This started emergence of the service sector in India, which gave birth to companies like Infosys, Wipro for IT sector in India and many manufacturing units in China. If we study economy of China, there exports have grown multiple times due to work offloading by the companies to China. In the world where Globalization seems to be in agenda of all the companies, Is outsourcing really paying off for big companies ?? or Is it compromising the quality for the costs?? In this article we would try to revisit the topic of outsourcing whether it is beneficial to companies or it is putting there existence a big question mark. The following section has been decided in the following manner. Briefly, in this topic I would try to explain
what is outsourcing ??
What can companies outsource
Selecting the Vendors
Outsourcing: - Boom or Bain
Risk mitigation during outsourcing
Global Delivery system of Infosys
Should Poter 5 strategy principle be applied to Outsourcing??
Before moving ahead , we need to emphasize why a company should outsource. In this highly competitive and changing world, companies try to optimize their activities. So doing all the activities is next to impossible for companies. A company needs to identify the partner who could do the job as per the quality standards.
What should be outsourced ?
Identify WHAT companies can Outsource:-
Company needs to identify where their competence exists. Keep the core competency with the team and try to find partner who can do rest of things in proper manner.
Company need to identify what process or production unit changes a lot and risk could put to other party.
Case Study On WHAT should be Outsource:-
Dell is company, which sells Computers. Dell’s core competency is assembling computers and selling to consumers. All the parts, which are required in the computers, are procured from the vendors. It sets the standards what are required for its production line. Dell makes sure the product which are made by the company are as per the standards.
Company management needs to identify which activities needs identified, which could maximize the value for the stakeholder. There could be instance where lot of capital might be require to establish the product line which could be easily manufactured in eastern countries. Also if companies put all the resources to manufacture this product, it might erode the benefit to the company which it might get because getting out the work from outside.
Nike is perfect example how outsourcing could be successful in today’s environment. It have big designing unit in Europe, where it design as per the requirement of the youth where its product line is most popular. But it doesn’t have any manufacturing unit. Nike sends the designs to china for manufacturing. Nike management has made sure the product, which is delivered to the end customer it, is as per the quality standard, which it requires. Company get the product with quality it desires at much cheaper rate.
Dell computer is another example how the product company can make use of outsouring in efficient manner to control cost and mitigate the risk of obseleting the components. Dell started as assembler of computers. It releasized that selling through middle man is costing hell lot of money and it was effecting its bottomline so it started selling computers directly to customers. As business grew instead of setting the factories for vertical integration it expaned the market area to Europe. Company knew that business was expaning and it would be easier to invest on compent assembly but as technology was getting fast obsolete they had decide to outsource all the component. To make things easier they had always shortlisted the vendor who were ready to invest and also ready to deliver plugin components. This had shrink the number of employees required in the company as well ready for any change in the market environment. They were able to reduce the shelf life of the product using effective CRM methods.\
In 1990’s, new form of outsourcing started with outsourcing of services. Indian companies that included Infosys mastered the outsourcing business in software services. Company started with providing manpower to the clients than improved the infrastructure and started executing the business from offshore. This Global delivery system was pioneered by Infosys, which later had become the Brand of India, which become the hub of software service. In India compaies are targeting fulfilling Fortune 500 companies IT needs through state of class infrastructure. The companies have put the quality standards which SEI CMM level/ TL9000 so that all companies who outsource the work are confident enough to know that whatever task they are doing are as per the quality standards defined by industry.
What factors needs to taken care while selecting the Vendors?
Before deciding on the vendor, companies should check the past record of accomplishment of the company. What kind of Commitment Company has been following? Company is able meet there commitments. Is the company reliable that it would not sell technology to other competitors? Also in the same time, the company has not missed any of the end dates.
Before taking any decision, company management needs to find out the relevant vendors who can manage the work as per quality Standards Company the work as per the quality standards. Big telecom companies are targeting 5 9’s as the strategic availability of the networks, if they outsource, the companies needs to make sure that output would be as per customer expectation.
Past record of the company needs to be checked, whether they have delivered with quality to other customer. Brand name of the company from which company would be buying the services.
Vendors should be ready to customize as per the requirement of the company. In case of Dell when it was expanding the business, they wanted the supplier should also be able to increase there production, so they don’t have to look for the another vendors to expand there network.
Companies should have multiple vendors rather than just relaying on one vendors. This enable to have competitions between the competitors and they don’t become complacent.
Outsourcing: - Boom or Bain
Whenever outsourcing is debated, it starts with cost cutting by the company and management generally comes out with the statement that is s strategic move to outsource work. Do really company gains from the move besides getting work done cheaply. There would be varied answer but studies have revealed the company has gain competitive advantage in getting work outsourced as companies have become more open to change. If the company have get product which produce say X amount of product which is delivered by Y company. If company is coming out with new product they would like to obsolete this product, company would just scrap the ties with this person rather than having big workforce thinking how to reuse this factory.
Negative side of the outsourcing companies are shrinking, this means companies that were providing employment to individuals have started lying off people. The work, which was done by the companies, is being outsourced to cheaper destination. The company requires a manager who can track monitor the quality of the product rest labour class is either outsourced to china/India/Malaysia like companies. On the flip side, in the eastern companies there have been lot employment being generated. So spending power have increased as well the quality standards have improved which have been evident with software boom have been floating high in India with company like infosys/wipro etc have made the mark in world fastest growing companies.
Check Points Outsourcing ????
For any company to be successful in outsourcing, it needs to make sure checkpoint in system are well placed else the advantage it tends to get would be easily washed out. Company needs to identify the target why it is not producing the product and going for other vendor to make.
Major Reasons:-
company doesn’t have skill level, would require large amount of investment
Company would need to invest large amount of money and in the market product could be easily available
If company intends to make the product inhouse, Time to market could lead its competitor taking advantage.
It wants to reduce cost.
Regular Monitoring of Vendors :-
Companies Management should have regular meeting with the vendors so that to identify what are the factors, which could become the blocking factor in the coming days. Any such issues should be tried to address before the companies loosing the precious time to market there product.
Alcatel have given there worked to at least 5 vendors in India. They have policy to have subcontractors for outsourcing there work. They try to identify the vendors, which are specialist in the domain and try to negotiate on the price/deliverable. They have the work structure in which they have regular meeting at all level to make sure the progress of the work is on track and all the quality records required by the companies is met within the timeframe.
Future of Outsourcing:-
Figure shows the future of corporate world in 20th century. It shows that company size would be shrinking. They would be more specific to the customer needs and they would devise the product accordingly. The product would be such that it would be just a supplier to the user. The company would ask to design the product as per the company needs. More over the IPR would be with the company then company could request another to build or do mass production for the product. There could be distant location where the support of that product would be present.
Outsourcing is one of the best practices of 21st century. Companies are constantly in search of the place where work is efficiently executed and cost of operations is cheapest.
Tuesday, September 25, 2007
war of dividends ...
Often when we see company declaring dividends 100% or 200% of there face value. I always thing should company pay dividends to the shareholders. But when a person invest in wealth creating instruments like shares, they never expect the return in the form of the dividends. They want the value should be created of there invested sum.
Should company give dividends and at the same time take laons from market at higher rate or company don't invest because they are short of money, this definetly hit the bottom line of the company.
But in market like ours we always thing stock which pay higher dividend is better Company.
Should company give dividends and at the same time take laons from market at higher rate or company don't invest because they are short of money, this definetly hit the bottom line of the company.
But in market like ours we always thing stock which pay higher dividend is better Company.
Subscribe to:
Posts (Atom)