Why MBA?

Being an alumni of MBA entrance coaching classes and presently a fellow men of MBA student fraternity, I sometimes feel that majority of B-School aspirants and even B-School students are not aware of the reason to pursue an MBA? Cursory glance thrrough the following forum on PagalGuy To Hell with MBA will give you an insight into the veractiy of my statements. Applying 80:20 rule to the number of applicants in CAT, we derive that only 50,000 out of 2,50,000 applicants are aware of their reasons to do an MBA.

A step-wise approach is essential in any decision making procedure and the same implies to the decision making process of pursuing an MBA. The approach consists of three questions “YWH” which need to be asked in the same order as it is mentioned for an effective decision. In case of a decision of pursuing an MBA one needs to ask three questions viz “Why MBA?”,  “When MBA?” and “How MBA?”. The first question shall answer the reason for one to do an MBA and which MBA will suit him the most, the second one answers the best time to do the MBA which he has zeroed in for and the third answers how to go about it.

Though “Why MBA?” is the first and the most important question to be answered, it is the least bothered element in decision making for majority of the MBAs as I have pointed out in the earlier section of the article. Even in a coaching institute, the faculty and students remain confined to the boundaries of how to crack an MBA entrance test and the discussion to answer “Why MBA?” remains at the back burner except during the preparation for GD/PI. The answers prepared during the GD/PI stage are mostly cosmetic and do not represent the real candidates views and thoughts.

Many B-School students pursuing MBA become aimless and hence are not able to reap the best out of MBA course. As per my opinion, this is one of the reason due to which Indian MBA courses create managers not leaders. A Harvard Professor once commented about Indian MBA – Indian managers can keep a ship (business) afloat but cannot salvage out a sinking ship (business)”.

January, Febrauary and March are the seasons of final admission process for majority of B-Schools around India. And a huge chunk of students will be brainstorming on how to get through the last hurdle. Though answer to the question “Why MBA?” is not the sole criteria for ones admit to B-Schools but I would advocate every candidate to do a retrospection before he/she gets into the corridors of B-Schools to reap the best of your MBA. Better late than never!!!

Indian IT’s Elixir

In this article, I will attempt to dissect the long term strategies adopted by Indian IT Industry and will try to connect the Practical Understanding of Strategy from the dissection with Strategy Lessons taught in the B-School class.

Some theory which will help you understand the article before I begin – A long sustainable growth is a product of long term sustainable strategy adopted  by the industry or the company. A sustainable strategy is one which is rare, unimitable or hard/costly to immitate. Strategy adopted by any player depends on its strengths & weakness and the opuurtinities and threats in the industry.

For a long time since inception of Indian IT Industry, Indian IT industry has banked on “Low Cost Strategy” for its growth. “Lost Cost” is not a sustainable strategy as it is not a rare and costly strength to immitate. Russia, China and Malaysia are upcoming low cost centers and pose a great threat to the Indian IT Industry. Hence, there is a need to identify new strategies for growth and some of the leading Indian IT Firms have done so. The strategy is “Product Differentiation”.

In a highly competitive industry like IT industry, firms put efforts to differentiate products and offerings. Big 4 definitely have put special efforts to differentiate products/offerings and to serve niche markets. FOR EXAMPLE : Infosys has strength in BFSI, Satyam is well know for ERP and WIPRO is renowned for telecommunication.

Some of these firms even went ahead and tied their earnings and revenues to non-perishable activities (Tying your revenue to non perishable assests is another strategy which I have learnt in the Strategy Class). Non perishable activity in case of IT industry is support and maintainence for their own products. Indian IT companies have now entered into product development. Once a product is deployed, the firm enjoys long term maintainence and support revenues. Some of the firms that have entered Product development are Infosys-Finacle; TCS-Bancs; iFlex-FlexCube.

In the pursuit of Product Differentiation, IT firms have now ventured into quality service offerings like IT consulting which is expected to grow at a CAGR of 40% till 2010, banking on good brand recognition they enjoy among the clients.  Wipro Technologies bought U.S. consulting firm NerveWire Inc, Infosys set up its U.S. consulting unit, Satyam lapped up a U.S. consulting firm, Bridge Strategy Group – These are the indicators of the huge potential that Indian IT firms have indentified in product differentiation.

Furthermore, Indian IT Industry are exploring oppurtunities in Domestic sector which is expected to grow at good rates. Supplimenting this is the ability of Indian IT firms to crack into outsourcing averse nations like Denmark, France etc via business offerings like Sub-Contracting, Consolidation and Partner Strategy.

In the view of all this, I believe Indian IT industry has matured and has the ability to adopt new strategies easily and early. Hence, I infer we will observe few more changes in the strategies of Indian  IT in the years to come.